Those Sensitive Auto Dealers Strike Again, and Another Newspaper Caves   

No newspaper advertisers enjoy reading negative articles about their livelihood. But most lack what car dealers have: Clout. When auto dealers don't appreciate a story--say a primer on how to save money when buying a car – they have been known to pull ads, forcing newspapers to choose between their pocketbooks and principles (see "Auto Dealers Muscle the Newsroom," September 1991).

úast June, the San Jose Mercury News became the latest newspaper to bow to pressure from dealers. A month earlier, the paper's Sunday business section included an 81-inch consumer guide to reading an invoice and negotiaing the best price on a new car, and local dealers were not happy.

ôhe Mercury News is not alone. In the last few years, the Hartford Courant, Utah's St. George Spectrum, Alabama's Birmingham News and, more recently, the New Haven Register have all bowed to the wrath of dealers after running similar stories.

In San Jose, the response from dealers was swift: About 40 pulled their display advertising, costing the paper at least $1 million in revenue.

"Discontinuing advertising is the only way a businessman like myself can protest their attitude about my lifestyle and my business," says dealer Lon Normandin, who was spending $15,000 to $20,000 a month on Merucy News ads. "They're saying we're taking advantage of people, which is not true."

ûn the paper's May 22 article, headlined "A Car Buyer's Guide to Sanity," reporter Mark Schwanhausser offered consumers tips such as telling them to rely on a car's factory invoice rather than what a dealer might tell them. And among other sources, the reporter quoted the author of a book on negotiating who suggested that "one reason God gave you feet was so you could use them to walk away from car salesmen."

?an Jose dealers complained that the article left the impression they couldn't be trusted. Three days after the story appeared, three dozen dealers met with publisher Jay Harris and other Mercury News executives. Harris says he was "somewhat surprised by their vehemence."

"Three years ago," says the publisher, who joined the paper in February, "they said there had been a similar meeting. They felt the paper had not always provided fair coverage of their industry, that all dealers were lumped together into one stereotype."

ülthough Schwanhausser says the dealers overreacted (the boycott, he argues, was "like your wife divorcing you for leaving the toilet seat up"), Harris decided an apology was in order. In a letter to the dealers, the publisher wrote that Schwanhausser's story "fell short of what it should have been." When the boycott continued despite the apology, the Mercury News began running a full page house ad listing "10 reasons why you should buy or lease your next new car from a factory authorized dealer."

Harris says the ad is designed to "help build traffic" for those dealers who have resumed advertising in the paper, although some (including Normandin) have yet to return.

The new ad brought a strong reaction from editorial staffers, who flooded the newsroom's electronic mail network with so many angry messages the day that it first appeared that the computer system crashed. That prompted Harris to convene a 90-minute meeting with newsroom employees to "talk through all the issues." The paper also ran a story about the dealers' angry response.

The federal government may have the last word in the controversy. The Federal Trade Commission is investigating whether the dealers broke any laws prohibiting anticompetitive agreements when they gathered soon after meeting with Harris, allegedly to discuss an ad boycott. The Mercury News reported on August 11 that the dealers had been contacted by the agency.

Ronald Collins, a George Washington University law professor who has studied advertiser attempts to shape media coverage, says he finds it surprising that the daily ran Schwanhausser's piece in the first place.

"Usually, the editor will kill that kind of story or the reporter knows certain areas are no-nos," he says.

Now that Mercury News readers have seen the paper's reaction to pressure from advertisers, Collins wonders if they will continue to expect the paper "to give uninhibited, robust, wide-open reporting on matters pertaining to purchasing and maintaining automobiles."

Schwanhausser wonders himself. He says that while he agrees with Harris' assessment of his work to the extent that "any story can be done better," he feels his article was accurate and "very useful" for consumers.

"The publisher has ideas about how he would have done the story differently, and I have ideas about how I would respond to this boycott differently," the reporter says. "But the boycott isn't really over my story. That's tunnel vision. Larger financial and journalistic issues are at the heart of this."