While General Motors has been the beneficiary of federal relief in the form of tens of billions of dollars, the Association of Independent Commercial Producers (AICP) is asking the Obama Administration for another form of federal relief–from the business practices of GM.
For the AICP, the prime objectionable practice is the automaker’s requirement that production companies on its commercials agree to a net 60-day payment schedule. This in effect puts small entrepreneurial spotmaking houses in the position of having to bankroll GM projects in order to get the business. Fronting money in this manner–particularly for a production company involved in jobs for not only GM but also other clients–would be tantamount to financial suicide, according to the AICP.
In that taxpayer dollars have made the U.S. government a 60 percent owner in GM, Matt Miller, president/CEO of the AICP, wrote earlier this week to U.S. Treasury Secretary Timothy Geithner, informing him of GM’s payment policy and its profoundly negative implications for the commercial production community, which consists of small businesses that don’t benefit from the oft-cited “too big to fail” rationale that has rescued GM.
Accepting deferred payment terms as a condition of working for a client, wrote Miller, is unacceptable in a business where the norm calls for 70 to 75 percent of a production budget to be spent either prior to the project commencing and/or no later than 10 days after the completion of the film shoot. On average, pointed out Miller, 55 percent of all costs of a production are paid directly to labor.
Miller explained in his correspondence to Geithner, “Production companies secure locations, make commitments to a myriad of vendors, and hire many freelance employees (most of whom are members of various unions, working under collective bargaining agreements) to ensure that a client’s marketing vision is brought to life. Under the payment terms that GM is requiring, production companies will be unable to meet their obligations for individual jobs, not the least of which is to pay labor within the time frames prescribed by state labor codes.”
Miller went on to write that “while AICP member companies have credit lines, they are not meant to fund corporate advertisers’ production needs. Rather, they are there to help the normal needs of a small business. GM’s new terms would require third party funding in order for the commercial work to be successfully completed. Additionally, maximum economic value is realized when clients fund their own advertising production. Turning to third party financing–presuming it can be secured–would likely come from speculative sources at high interest rates. Under the GM payment terms, production companies would be acting as interest-free banks, as there seems to be no willingness on GM’s part to pay any sort of finance charge.”
According to the AICP, GM can–and should–be operating as a model turnaround company, respecting small and large businesses alike. “Conveying the new vision of GM,” wrote Miller, “will require skill and ingenuity in the creation of its marketing communications. To achieve this, they cannot approach it with a heavy handed, belligerent attitude towards vendors that provide vital and unique services.”
Miller contended that “it seemed disingenuous that the government [as the majority owner of GM] would condone or take part in the exploitation of small businesses. This is counterproductive to a successful GM, harmful to the tens of thousands employed in this industry, and sends a very poor message to business.”
The AICP president/CEO concluded by urging Geithner and Ron Bloom, senior advisor of the Automotive Task Force, “to seriously examine this and other payment practices by GM, so that the American people are assured that their government’s foray into corporate ownership remains responsible and beneficial to all.”
Apple and Google Face UK Investigation Into Mobile Browser Dominance
Apple and Google aren't giving consumers a genuine choice of mobile web browsers, a British watchdog said Friday in a report that recommends they face an investigation under new U.K. digital rules taking effect next year.
The Competition and Markets Authority took aim at Apple, saying the iPhone maker's tactics hold back innovation by stopping rivals from giving users new features like faster webpage loading. Apple does this by restricting progressive web apps, which don't need to be downloaded from an app store and aren't subject to app store commissions, the report said.
"This technology is not able to fully take off on iOS devices," the watchdog said in a provisional report on its investigation into mobile browsers that it opened after an initial study concluded that Apple and Google effectively have a chokehold on "mobile ecosystems."
The CMA's report also found that Apple and Google manipulate the choices given to mobile phone users to make their own browsers "the clearest or easiest option."
And it said that the a revenue-sharing deal between the two U.S. Big Tech companies "significantly reduces their financial incentives" to compete in mobile browsers on Apple's iOS operating system for iPhones.
Both companies said they will "engage constructively" with the CMA.
Apple said it disagreed with the findings and said it was concerned that the recommendations would undermine user privacy and security.
Google said the openness of its Android mobile operating system "has helped to expand choice, reduce prices and democratize access to smartphones and apps" and that it's "committed to open platforms that empower consumers."
It's the latest move by regulators on both sides of the Atlantic to crack down on the... Read More