Judge Allows General Motors To Shed Sponsorship Contracts

Arnold Palmer Invitational Among 54 Sponsorship Contracts Cut By GM

U.S. Bankruptcy Judge Robert Gerber yesterday allowed GM to "shed dozens of sponsorship deals and pricey perks that included VIP suites at international speedways, naming rights for a Lansing baseball stadium and Times Square billboards," according to Robert Snell of the DETROIT NEWS. The move "frees GM from spending millions on marketing, sponsorship and promotion-related agreements that did not directly relate to the automaker's core operations." GM cut 54 total contracts, but it was "unclear how much money the automaker ... will save." The list included "high-profile sponsorship deals" with the Raiders, the Univ. of Southern California and the PGA Tour Arnold Palmer Invitational. GM has "already ended high-profile sponsorship deals" with golfer Tiger Woods, filmmaker Ken Burns and a "host of events such as the Super Bowl and Academy Awards." Among the contracts that were terminated, retroactively effective on June 22, are the naming rights of Oldsmobile Park in Lansing, Michigan, for which GM agreed to pay $1.5M when it signed a 15-year contract in '95. GM is also ending a contract for the Chevrolet clock in Times Square -- where it has advertised since the '30s. Snell notes GM's marketing approach "got an overhaul last week after GM emerged from bankruptcy to focus on four core brands: Chevrolet, Cadillac, Buick and GMC." GM Communications Manager Kelly Cusinato: "You'll see that many of those we 'rejected' or chose not to carry forward involved retired brands or soon to expire GM brands or simply reflect the reality that the new, smaller, GM only has four brands to support. As for future spending and approach to sponsorships, it is too soon to predict." GM's marketing department is now headed by GM Vice Chair Bob Lutz, "who will be responsible for all creative elements of products and customer relationships." Lutz: "You will very quickly see a drastic change in the tone and content of our advertising" (DETROIT NEWS, 7/14). The following are some of the sponsorships that GM will drop as part of the judge's decision (THE DAILY).

BUILT FORD TOUGH: Ford Racing Technology Dir Brian Wolfe indicated that the manufacturer "drafted a slimmed down business plan under the company's new CEO Alan Mulally, and ... cuts were made to the racing budget -- last year." Wolfe: "For our part at Ford, our story hasn't changed a whole lot since the start of the season, other than we haven't won enough races. ... But we have kept our engineering support. That is really critical; that hasn't changed. The [Sprint] Cup teams, that we have long-term contracts with, have stayed the same.  We're pushing along with our plan." Wolfe said that Ford "does send money to certain Ford teams" at the NASCAR Sprint Cup Series level. In Daytona Beach, Godwin Kelly noted Ford officials "think the new-car automobile market and economy will remain choppy through 2010 and this pesky recession will finally be over within 18 months." But even when things "turn around, Ford will keep a tight grip on budgets." Wolfe: "Every penny we spend, we want to make sure we're putting in the right place and get a return from that. Ford is predicting profits in 2011. There's still a ways to go" (Daytona Beach NEWS-JOURNAL, 7/11).

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