Edmunds.com fires back at White House cash-for-clunkers slam

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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