AMI Chief Asks Employees to Back Auto Bailout

Mitt Romney might want you to let Detroit go bankrupt, but David Pecker doesn't. Earlier this afternoon, the American Media chief sent all of his employees a fact chief supplied by the GM and intended to build support for an auto-industry bailout. American Media publishes the National Enquirer, Star and a number of fitness titles; it used to own two automotive magazines, Auto World and MPH, but folded both.

(Update: Jossip says Pecker has been anything but a supporter of American car-makers in his personal consumption.)

Here's Pecker's email:

From: Pecker, David

Sent: 11/19/2008 1:06 PM

To: HR - Everyone
Subject: AMI's Position on the Auto Crisis in Detroit
Dear All,
The automotive industry is, in many ways, critical to the future of magazines and other media. As one of the biggest advertisers across all platforms, its well being is irrevocably tied to the media industry.

You are probably well aware that the auto industry is at a crossroads. Companies that support millions of workers and families across the U.S. have been slammed by the worst economic downturn in 75 years. Particularly frustrating is that this crisis struck just at a time when companies like GM were successfully restructuring themselves and creating a new generation of cleaner, more efficient vehicles.

Discussions are now underway in Washington D.C. about government support for this vital industry through this downturn. GM and other carmakers have asked media partners like AMI to provide their employees with some facts about the situation.

GM prepared the following to help make us all aware of the implications:

The U.S auto industry has been hit at every level by the global financial crisis. Carmakers can't get loans to complete their restructuring and put advanced technology vehicles into production. Customers can't get credit for new cars, and consumer confidence has plunged to an all-time low. Suppliers and dealers can't get loans for routine business needs.

This current crisis knows no geographic boundaries. What happens to the U.S. auto industry also had an immediate impact on Main Street. U.S.-based carmakers have 105 plants in 20 states, including California, Texas, Kansas, Louisiana and Maryland. They support 14,000 dealers across the country, and these dealers in turn employ 740,000 people, with a total payroll of $35 billion a year. The companies buy $156 billion in parts and services from suppliers in every state. The auto companies provide pensions for 775,000 and health care benefit for 2 million.

Because carmakers are so tightly woven into the fabric of the U.S. economy, the collapse of this industry would reach far beyond Detroit. The Center for Automotive Research in Ann Arbor predicts that a collapse of U.S.-based carmakers would lead to widespread failures of supplier companies, already pushed to the brink by the downturn, and this in turn would shut down the transplant factories owned by Toyota, Honda and other non-U.S. companies. Shockwaves through the economy would quickly put nearly 3 million people out of work. In the first year alone, personal income would drop by $150 billion, and tax and social security receipts would fall by more than $45 billion.

Faced with these risks to the well-being of millions of Americans, and to the U.S. economy as a whole, it is clear to us that government support is a sound investment in an important industry, and in America itself.

We hope you will ask your legislators and other political leaders to support the U.S. auto industry through this critical transformation. It's easy and turnkey. Please take a minute to go to http://gmfactsandfiction.com/ to show your support and let your voice be heard.

Regards,

David

David J. Pecker
Chairman & Chief Executive Officer
American Media, Inc.
One Park Avenue - 10th Floor
New York, NY 10016
Ph: [redacted]
Fax: [redacted]
Email: [redacted]

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