“AIG has just launched a two-week, multimedia campaign seeking to reintroduce itself after its role in sparking the Great Recession,” MediaPost reported yesterday. “The company got an $85 billion bailout as the government took about an 80% stake.”
In the process, it became one of the two main poster children for what went wrong with the economy, the other being General Motors.
But what followed each bailout couldn’t have been more different.
The AIG bailout was a product of the Bush administration, GM’s of the Obama administration.
GM bondholders, who were legally entitled to first shot at the company’s liquid assets, were shafted in favor of generous union pension plans. No such thing happened with AIG.
Protesters bused to AIG executives’ homes and noisily demonstrated on their front lawns. No such thing happened with GM.
AIG’s CEO stayed on and resisted government controls on the business. GM had a succession of Obama appointees. Government pressure reportedly drove many supposedly business decisions, from pushing overproduction of Chevrolet Volts to vetoing a cost-saving headquarters move from downtown Detroit to an existing, and less expensive, suburban office complex.
Now, AIG has finished paying off its debt, with a $22 billion profit for the taxpayers. GM, in contrast, has cost the taxpayers tens of billions of dollars. In 2010, AP estimated that the government would have to sell its GM shares at $53 a share to break even. This morning, its share price was $29.225.
In a December, 2010, GM television commercial, then-CEO Ed Whitacre proclaimed, “We have repaid our government loan in full, with interest, five years ahead of the original schedule,” when in fact some 87 percent of their debt was still outstanding and the “payment” resulted from reshuffling dollars from one government loan to another.
AIG, on the other hand, really did pay off its debts. In full.
According to MediaPost,
with its advertising, AIG is seeking to brand itself as responsible with upright citizens who make good on promises…
There are home page takeovers on sites like Yahoo, a YouTube “roadblock” and print ads in some of the company’s largest newspapers. It’s also not skimping on TV, with spots set for the NFL playoffs and Golden Globes, along with the premier college football bowl games, “60 Minutes” and leading morning shows.
The company says it’s working to help those suffering after the devastating tornado in Joplin, Mo., and recent Superstorm Sandy in the Northeast. Plus, it notes it’s the lead insurer for the new World Trade Center in Manhattan.
Employees [in the commercials] hammer home that AIG has repaid taxpayers every cent it received and even made them $22 billion richer.
“We made a commitment to repay and we did — and gave America a profit,” one of them says. “Pretty proud of that.”
MediaPost calls the commercials “compelling,” but they’re really run-of-the-mill.
In them, a politically correct mix of female and federally recognized minority employees deliver predictable one-liners like, “We’re helping Joplin, Missouri, come back from a devastating tornado.”
But ho-hum execution aside, it’s nice to see insurance companies do what insurance companies are supposed to do – i.e., paying damage claims so people can rebuild – with little drama and almost as little in the way of politics.