Unsold Honda Accords sit on a lot in September after the end of the cash-for-clunkers program.
(David Zalubowski/AP)Photos (1 of 1)
Edmunds.com fires back at White House cash-for-clunkers slam
Tiff over the success of cash-for-clunkers has the White House reaching beyond media criticism to take on even ‘apolitical’ consumer groups.
By Patrik Jonsson | Staff writer/ October 31, 2009 edition
Atlanta
Edmunds.com CEO Jeremy Anwyl is defending his company’s claim that the Cash for Clunkers program was basically a lemon, saying a recent report simply reiterated what’s well known in the car industry: Incentive programs are “eyewateringly expensive.”
After taking on Fox News and the US Chamber of Commerce as part of a new media strategy aimed at perceived political opponents, the White House turned its blog on Edmunds’ critical report of the $3 billion Cash for Clunkers program.
In a post titled “Busy covering car sales on Mars, Edmunds.com gets it wrong (again) on Cash for Clunkers,” the White House charged the firm with “trying to grab headlines and get on cable TV” while the analysis doesn’t withstand “basic scrutiny.”
Founded in 1966, Edmunds.com is the Santa Monica, Calif.-based publisher of the Blue Book series. Basically a consumer company supplying industry analysis to subscribers, Edmunds.com also offers the “True Market Value” tool.
So what did Edmunds do to warrant a snarl from the White House? For one thing, its report did grab headlines, including a well-read Monitor report.
According to Edmunds, only 125,000 of the 690,000 cars sold during the taxpayer-funded promotion were sales inspired by the program as opposed to those that would have happened anyway. Edmunds then divided that number by the total price tag and voilà: Each car purchased cost the American taxpayer $24,000.
Besides the no-nonsense price tag (an Edmunds’ specialty) there’s nothing new about the premise of the report, Anwyl contends. (The White House used dealer reports to highlight the program’s success while Edmunds used comparative historical sales figures to get its numbers.)
“We got real math behind this for the first time,” says Mr. Anwyl in a phone interview, before landing a friendly jab referencing this summer’s “Beer Summit” at the White House. “We need to send an invitation to the President to come out, we’ll have a beer and a photo opportunity, and walk him through the data. He might find it eye-opening.”
More seriously, Anwyl says: “It’s shocking and somewhat troubling that this is something the White House would pick up. This administration more than any other administration is invested heavily in the auto industry, so you would hope that they would had done a little more homework than their response suggests.”
The White House post instead quoted the President’s own Council of Economic Advisers (CEA) pointing out that the program increased GDP by 1.7 percent in the third quarter and will create 70,000 jobs in the second half of 2009. It took issue with Edmunds’ notion that 80 percent of the payback from the program will take place in 2009, leaving little residual effect on the auto industry into 2010.
“In other words,” writes Macon Phillips, the White House’s “new media” chief, “all the other cars were being sold on Mars while the rest of the country was caught up in the excitement of the Cash for Clunkers program. The CEA’s analysis is transparent and comprehensive … Edmunds.com, on the other hand, is promoting a bombastic press release without any public access to their underlying analysis. So put on your space suit and compare the two approaches yourself.”
(If you’re so inclined, here are the links: CEA and Edmunds.com.)
Mike Jackson, CEO of AutoNation, the country’s largest new-car dealer chain, agrees with the White House’s tough response, calling the Edmunds’ study “uncharacteristically shoddy,” according to USA Today.
“Simply put, they’ve misrepresented the facts, and the White House is completely justified in calling them out on it,” Mr. Jackson said.
The tiff comes after three weeks of debate over the White House’s new media strategy, employed first against Fox News and then against the US Chamber of Commerce to basically “reality check” the agendas of the President’s opposition.
The upside of the unusual strategy is scoring political points and rousing the liberal base. The downside is appearing thin-skinned and potentially losing credibility.
(By the way, one journalist has apologized for comparing White House media strategy to Nixon’s “enemies list”.)
The difference with this latest brouhaha is that Edmunds.com can hardly be characterized as an opposition front. In fact, Anwyl says, most of its employees are Obama supporters.
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Comments
2. Mike | 10.31.09
Cash4Clunkers was a lemon. It’s nice to see Edmunds hold their ground. How can the White House artificially inflate the price of a cars, when buyers should be paying below wholesale in this economy? Let the market work itself out. New homes have to compete with foreclosures and new cars should have to compete with repossessions. When the price margin between http://www.GMC.com and http://www.repofinder.com narrows we’ll be back on track. Shame on the W.H. for delaying the inevitable.
3. dom youngross | 10.31.09
What was the White House thinking, or smoking? Edmunds has decades of consumer-oriented street cred in auto industry pricing and stats.
With taxpayer-funded bailouts and incentives, Obama and company are trying to adopt leaches and blood-letting from the 18th century medical world as a viable practice in today’s economic world.
4. Steve | 10.31.09
I don’t know whose analysis is right, Edmunds or the White House. Maybe they both are, just looking at the data from two different angles.
What I do know is that the tone coming out of the White House is vicious. It’s demeaning to the office, intolerant of any dissenting opionion, and definitely not the healing approach many independents voted for during the 2008 elections.
5. Zimminger | 10.31.09
Nothing destroys the White House’s criticism of Edmunds as much as being joined in it by, “Mike Jackson, CEO of AutoNation, the country’s largest new-car dealer chain.” Of course he’d agree, since it’s the new car dealers that were getting all that money.
6. Patriotson | 10.31.09
Lies; lies; lies nothing but lies from Obama and his fuzzy world administration. Voo Doo math and to much wana causes thin skin and a whinny attitude. Credibility honesty transparency; part of the presidents vow and now its just lies from a Chicago thug and union thugs
7. g.mitchell | 10.31.09
If the administration runs the health care program like the clunker program I am a dead duck. I had 3 clunkers and none qualified, one a 77 GMC truck that gets 10 mpg, too old didn’t qualify, another a 92 6 cyl. camry it got 19 mpg 220 thousand miles ago, did not qualify, the last a 88 honda again just got too many mpg when new 325 thousand miles ago. Of course my last clunker I donated to a local group that furnishes transport for people trying to get on their feet, a lot of worthy vehicles were crushed and made worthless, such a terrible waste at a terrible cost to all tax payers now living and yet to be born. Such is change we can believe in. We are getting the government we voted for it seems. Standing by here for the next horror from Obama on this Halloween.
8. Dave Brown | 11.01.09
I would like to trade this Socialist Clunker and his administration
for a new one that will actually protect the constitution they swear to unhold. Be glad to pay full retail!
9. Dave | 11.01.09
A young man I know who took on jobs he could find drove around an old clunker that was probably cheap to buy but was expensive to operate; it got eight miles per gallon. The car was really beat-up looking. Taking advantage of the Cash-for-Clunkers program, he traded in that clunker for a new car that got four times the gas milage, 32 miles per gallon. Instead of paying for gas, he now has extra cash to spend on other things. The results of that extra spending may take a while to be reflected in the economy. But what may not be reflected is how incredibly proud he his of his new car.
10. Lenny | 11.01.09
As a car salesman, I don’t even think edmunds.com has a clue what car sales were like before or during the cash for clunkers. NO ONE WAS BUYING before cash for clunkers and all of a sudden, thousands of customers came to trade in their cars. Now the program is over, we are back to making zilch. We need an improved cash for clunkers II asap.
This type of political analysis is killing the economy. You can’t use “historical” analysis because last year is “history” and people don’t buy the same way they used to so edmunds’ analysis is rubbish.
11. Paul Lockyer | 11.01.09
The White House and the government have no money. They either print it out of thin air or take it from someone who has earned it. They produce nothing. They earn nothing. They forcibly confiscate all the money they have. Based upon that undisputable fact, if you did not buy a car under the cash for clunkers program, and if you pay taxes to the Treasury, you helped buy your neighbors’ cars. The government took your money by force, kept some for their overhead, and used the rest to pay part of the cost of someone else’s auto purchase. Edmunds has this very right.
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1. lucy08 | 10.31.09
It is sad to see that Edmunds put out such a poorly analyzed report and it is even sadder to see them headline it in this way and darkly defend their position. Their “Bluebook value reports” are at best mediocre and they should keep to that. Trying to forward project during a deep recession is disingenuous. What is Edmund’s trying to do? I don’t get it.
I bought my new 2009 Ford Escape Hybrid and used the Clunker program turning in my 1992 Ford Explorer (almost worthless). I planned to buy a new car in two years, but moved my purchase forward by two years because of this plan. I received $4500 for the clunker program, received a $2,000 dealership rebate and turned in another car to the dealership for $7,000. The math worked. I run my own small business and it is very tight in this recession. I wasn’t planning to spend anything. Edmunds scenario did not fit me.