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Gm-- Nonmarket

In: Business and Management

Submitted By shunan
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William J. O'Neill, the director of public affairs for G.M.'s North American operations, said yesterday that the auto maker had not reduced its overall purchases of air time on NBC but had shifted all its advertising to entertainment and sports. General Motors pulled its commercials from NBC News programs as of Monday, the day that Mr. Pearce held a news conference to criticize the "Dateline" report, which was broadcast in November.
Taking the advertising away from the news programs could affect the budget for the news department. The auto maker spent about $90 million in advertising on all NBC programs through the first three quarters of 1992, according to a report by Media Watch, an independent company that measures national advertising. The company could not specify how much of that amount was spent during NBC News programs, but a sizable portion of G.M.'s commitment to NBC is in entertainment and sports.
Mr. O'Neill said G.M. had no plans to resume buying commercial time in NBC News programs. "We do not feel we want to advertise in a negative environment," he said. "We believe the environment on NBC's news programs is negative."
In his Monday news conference, Mr. Pearce said NBC had misled viewers when it showed a simulated crash in which a gas tank on the G.M. truck exploded into flames. NBC employed an outside contractor to conduct the simulation and in its apology Tuesday night, the network cited its use of an incendiary device to ignite an explosion and its failure to inform the viewers about the device. That failure has brought a storm of criticism from NBC's competitors and from specialists in media ethics, who noted that there was considerable evidence, even in other parts of the disputed NBC report, that G.M. trucks posed safety concerns. Range of Emotions
General Motors executives were satisfied about the settlement of their lawsuit against NBC, Mr. O'Neill said. He said the network had essentially agreed to all of the company's demands. "We needed to have our reputation restored," Mr. O'Neill said.
In contrast, members of the "Dateline" staff were described as demoralized during a staff meeting yesterday. And Michael G. Gartner, the president of NBC News, who made the decision to seek a settlement with G.M., said he had gone through a range of emotions from "embarrassed to depressed to proud of our actions yesterday to own up to our mistakes."
Mr. Gartner said he had not worked out the details of how the network would investigate the process that led to the flawed report, nor could he say whether it would lead to any disciplinary action against those who produced the report or allowed it to go on he air. "I have no idea what we'll do yet because I don't have the facts yet," Mr. Gartner said in a telephone interview. "I presume we're going to find some flaws in the system and we will enact some corrective action." Troubling Information
Mr. Gartner said he had not seen the "Dateline" report before it was broadcast in November and only become aware of the potential problems with the report 10 days ago. "What I learned troubled me," he said. "As I added more information I became more troubled."
Mr. Gartner said he had discussed the possibility that an apology could lead to a settlement the lawsuit with Mr. Cotton, who agreed and both men took the proposal to Robert C. Wright, the NBC president.
Mr. Cotton said he decided to enlist the help of Mr. Heineman, the G.E. lawyer, because "I had not had any personal contact with Harry Pearce." He acknowledged that Mr. Heineman did not know Mr. Pearce personally either, but that the talks would proceed more smoothly through a third party. Chief Executives
Asked if John Welch, the chairman of General Electric, had spoken with General Motors executives during the talks, Mr. Cotton said, "I have no idea." Mr. O'Neill said G.M. executives had been in contact with Mr. Welch before Monday's news briefing.
Mr. Heineman reached General Motors executives with his offer to settle the lawsuit about noon on Tuesday. They then faxed proposals back and forth, always through Mr. Heineman.
Mr. O'Neill said, "Our first position and their first position were not compatible." He said G.M.'s firm demands included that NBC acknowledge that the crash test had not used "real world data," that there was tampering in the test and that NBC apologize on the air to G.M. and its employees.
NBC agreed to almost all the G.M. demands, though it did not apologize to G.M. employees in its statement. NBC also agreed to pay G.M.'s legal fees and the costs of its investigation into the NBC crash test. Mr. Cotton said, "We don't know what that cost is going to be yet but we've committed to paying it." Mr. O'Neill said he estimated total cost to be about $1 million.
Mr. Gartner said he had prepared two statements of apology, one much more detailed, before the "Dateline" program began at 10 P.M. Tuesday. The show's two anchors, Ms. Pauley and Mr. Phillips, went on the air not knowing which version of the apology they would be reading.
NBC News executives said yesterday that the decision to use the crash footage was made by the producer of the report, Robert Read, and was approved by the program's senior producer David Rummel and the executive producer, Jeff Diamond. Three NBC News executives said the reporter on the segment, Michele Gillen, had expressed strong reservations about using the crash test but was overruled.
FORD

 By conservative estimates Pinto crashes have caused 500 burn deaths to people who would not have been seriously injured if the car had not burst into flames. The figure could be as high as 900. Burning Pintos have become such an embarrassment to Ford that its advertising agency, J. Walter Thompson, dropped a line from the end of a radio spot that read "Pinto leaves you with that warm feeling."
Ford knows the Pinto is a firetrap, yet it has paid out millions to settle damage suits out of court, and it is prepared to spend millions more lobbying against safety standards. With a half million cars rolling off the assembly lines each year, Pinto is the biggest-selling subcompact in America, and the company's operating profit on the car is fantastic. Finally, in 1977, new Pinto models have incorporated a few minor alterations necessary to meet that federal standard Ford managed to hold off for eight years. Why did the company delay so long in making these minimal, inexpensive improvements?
 Ford waited eight years because its internal "cost-benefit analysis," which places a dollar value on human life, said it wasn't profitable to make the changes sooner.
Before we get to the question of how much Ford thinks your life is worth, let's trace the history of the death trap itself. Although this particular story is about the Pinto, the way in which Ford made its decision is typical of the U.S. auto industry generally. There are plenty of similar stories about other cars made by other companies. But this case is the worst of them all.

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