Fraud Claim Against Eminem-Inspired Ads Bad Rap, Chrysler Says

Maintaining its hugely successful “Imported From Detroit” advertising campaign is fair and ethical, Chrysler rejects a false-advertising claim filed by a nonprofit organization that promotes American-made products.

In a complaint filed with the U.S. Federal Trade Commission, The Made in the USA Foundation alleges Chrysler flaunts its tagline in the high-profile television commercials and print ads featuring the core-brand 300 fullsize sedan, which is built in Canada.

Chrysler 300 commercial with NFL star Ndamukong Suh says, “Show where you’re going without forgetting where you’re from.”

“The Chrysler 300 is assembled in Brampton, ON, and often includes a Mexican-made engine,” foundation general counsel Joel D. Joseph says, referring to the car’s optional Hemi V-8 produced at Chrysler’s engine plant in Saltillo, Mexico.

“Last time I checked, Detroit is not in Canada,” he adds.

“Chrysler is flat wrong to imply the Chrysler 300 is made in the United States, and we have asked the FTC to order corrective advertising.”

Chrysler spokesman Mike Palese dismisses the allegation as “completely without merit” and promises the auto maker will defend its campaign vigorously.

Chrysler “will continue to pursue all avenues to protect our ‘Imported From Detroit’ trademark,” Palese tells WardsAuto in an e-mail.

The TV ads cited in the complaint feature the 300 and focus on Detroit Lions All-Pro tackle Ndamukong Suh, Detroit-born designer John Varvatos and hip-hop artist Dr. Dre. The commercial with Suh includes the voiceover, “Show where you’re going without forgetting where you’re from.”

The series stems from a milestone Super Bowl commercial that last month earned an Emmy Award from the Academy of Television Arts & Sciences. The original commercial featured rapper Eminem driving a Chrysler 200, which is assembled at the auto maker’s plant in Sterling Heights, MI.

As testament to its effectiveness, the campaign’s gritty tone has been copied by Audi in Europe and, ironically, by Ontario’s Liberal party, which recently won re-election.

Eminem recently settled a copyright infringement suit against Audi, according to media reports.

Ad shows designer John Varatos tied to his Detroit roots.

Marketing experts suggest Chrysler may be playing fast and loose with the facts, but some license is allowed in advertising, says University of Detroit marketing professor Mike Bernacchi.

“In advertising, there is a concept called ‘puffery,’’ he says. “It is accepted exaggeration. You can’t lie. But I think it’s clear there is no intent (by Chrysler) to deceive.”

Whether Chrysler is guilty of false advertising comes down to “what the typical consumer perceives,” says Leonard M. Lodish, marketing department professor at the Wharton School, University of Pennsylvania.

He says a public survey would inform the FTC’s deliberations, a measure that is not unprecedented.

Personally speaking, Lodish thinks the campaign crosses the line “a little bit,” though he concedes the tagline has a figurative element because the 300 largely was engineered and designed in the U.S.

When the latest TV ads were launched in May, Chrysler noted the “300 has been an iconic symbol of success and American style, and the all-new 2011 model is no exception.”

The campaign “elevates ‘Imported from Detroit’ messaging to the next level,” the auto maker said in a news release.

But the complaint claims the campaign “is likely to cause substantial injury to consumers who seek to buy U.S.-made vehicles.”

Against this backdrop, Chrysler’s U.S. output is on the upswing, according to WardsAuto data. Through September, 58.7% of its vehicles rolled off the line of American plants, up from 53.3% in full-year 2010.

The gain appears to have come at the expense of the auto maker’s Canadian operations, where output has fallen to 24.8% of Chrysler’s total production through third quarter, from year-ago’s 30.3%.

Mexico output has remained constant in the range of 16.5%. The Made in the USA Foundation also alleges Chrysler stripped its vehicles of country-of-origin stickers at auto shows in New York, Washington, Detroit and Los Angeles.

Says Chrysler’s Palese: “This allegation is completely without merit. Chrysler Group fully complies with the American Automobile Labeling Act. Neither the Act nor the regulations respecting it contain any provision that requires labeling on vehicles that are on display at auto shows. The statute requires only that a label be affixed to a vehicle distributed for sale.”

In addition, the complaint claims “many” Chrysler dealers have removed country-of-origin stickers. But the document, obtained by WardsAuto, does not cite any dealers by name.

Says Palese: “We know nothing about that allegation.”

The Made in the USA Foundation files similar claims against Ford in a complaint citing a radio spot that mentions the Ford Edge, which is assembled at the auto maker’s plant in Oakville, ON.

The ad suggests the cross/utility vehicle is “an American car,” according to a transcript contained in the complaint.

Ford tells WardsAuto the ad was produced by a dealer and that the auto maker has no responsibility for its content.

In its petitions to the FTC, the Made in America Foundation is described as a California-based noprofit organization.

“Its purpose is to promote products made in the United States,” the documents say.

The organization’s website says it was established in 1989 with financial assistance from Ford and several labor unions.

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