Consider the source

Analysis:

The story begins with an update on UAW workers and retirees wages and benefits, but the bulk of the story is what an auto analyst presents which is that GM needs to close some factories and reduce the number of employees. In other words, everything that this Auto Analyst says needs to happen is all put on the workforce, nothing is expressed about what changes the company needs to make internally.

It is important for TV news viewers to ask the question about who IRN Inc. is and what Erich Merkle’s background is. According to the IRN website “We provide our clients, primarily industrial companies and the financial firms that serve them, with management consulting to improve performance, market intelligence to support strategy, and technology that enhances the usability of information. Our mission is to improve the decision-making of our customers to strengthen their competitive position.” Does this sound like the auto analyst represents the public interest or that of the auto industry? Merkle himself has been with IRN since 1999, coming to them from Amway. Here is what the site says about what he does now “He analyzes industry trends / dynamics to determine their impact on IRN’s forecast offerings and works with IRN’s automotive supply client base to incorporate the forecast data and methodology into their business structures.” Does this sound like he represents the public or the auto industry? Listeners could ask themselves if any of this information was included in the story, would they think differently about who this auto analyst represents?

Lastly, it is important to point out that the video footage that they used in this story appears to be from the auto industry itself. Some of the footage is that of a Chevy truck commercial. So, the whole time that the Auto Analyst is talking this industry footage is running. At the very end when the mention that Erich Merkle has seen the new GM product line up, there is what appears to be trade show footage. The still photo included here is an example of what was used. Viewers could ask themselves if this story is more news or commercial.

Story:

WZZM 13 News reader – GM employees are learning the details tonight of the health care agreement worked out between the UAW and the company. Now if that deal is approved retirees will have to pay for health insurance while employees give up raises.

Reporter – It’s going to mean some sacrifices for everyone, but once more auto analysts are saying this is the beginning of cuts GM will have to make in order to stay financially stable.

The work continues at GM plants but the compensation is about to change. Employees and retirees are going to have to pay for health care to help General Motors save $1 billion dollars a year. Here is how it breaks down. Retirees will pay $370 a year for individual and $752 a year for families, while active employees will defer $1 an hour in pay raises due next year and 2 cents an hour in cost of living adjustments. The UAW issued this statement, “The tentative agreement asks every UAW-GM member, active & retired, to make sacrifices so that everyone can continue to receive excellent health care today and in the future.” But even with these concessions auto analysts say it won’t be enough to keep General Motors out of the red.

Auto Analyst – Quite honestly this is the easy stuff. It gets much more difficult after this, because what it is going to entail going forward is General Motors has to come up with a way in which they can reduce their capacity.

Reporter – General Motors is already hinting at selling off General Motors Acceptance Corp. to create more cash flow. Analysts say it’s the 2007 contract negotiations with the UAW that will offer them the biggest opportunity to cut costs.

Auto Analyst – That means closing some plants and that requires reducing their head count. And also the job banks, that is going to have to be a thing of the past Because I just don’t think that General Motors can support that long term.

Reporter – But there is a bright side. Eric Merkle with IRN got an early look at GMs new product.

Auto Analyst – I’ve seen some of the new product coming out in the future and it is quite stunning.

Reporter – But that is of course down the road. First, UAW workers must ratify the health care agreement for it to take effect. Right now there is no scheduled vote, both sides still need to work out the details.

Total Time: 2 minutes and 14 seconds.