Corvette racing's future?
07-15-2008, 09:50 AM
#1
Drifting
Thread Starter
Corvette racing's future?
http://www.autoblog.com/2008/07/15/g...uck-productio/
"Reduction in Motorsports" has me a little uneasy.
With no real competition, Corvette Racing seems to be an obvious target in this mess.
We'll see...
"Reduction in Motorsports" has me a little uneasy.
With no real competition, Corvette Racing seems to be an obvious target in this mess.
We'll see...
07-15-2008, 11:52 AM
#3
Race Director
As much as I love Corvettes, and love racing, it doesn't make any sense for them to keep racing in ALMS. LMP would be great, but you've got to be willing to lose.......something they don't had a record of handling very well.
To me, racing isn't just about winning, it's about promoting your product and sponsers. You absolutely want to be competitive, but not dominant. If GM can race by those rules, I think LMP could be very valuable, and worth every penny.
I imagine the C6R budget is still pretty low relative to GM's overall racing and general budgets, so who knows. I think they need to find a reason to keep racing at this point, and the financial situation may not help matters, although probably isn't enough to kill it either.
To me, racing isn't just about winning, it's about promoting your product and sponsers. You absolutely want to be competitive, but not dominant. If GM can race by those rules, I think LMP could be very valuable, and worth every penny.
I imagine the C6R budget is still pretty low relative to GM's overall racing and general budgets, so who knows. I think they need to find a reason to keep racing at this point, and the financial situation may not help matters, although probably isn't enough to kill it either.
07-15-2008, 11:53 AM
#4
Drifting
Thread Starter
I think Corporate health is paramount right now. I can't see them re-investing into a ground up program when their current program is good in GT1. Problem there is that nobody will come out to play.
GM is worth less than bed, bath and beyond right now. I think they need to focus on rebuilding the company before rebuilding Corvette Racing. Without GM, Corvette Racing won't exist either. It's a shame but it's true.
GM is worth less than bed, bath and beyond right now. I think they need to focus on rebuilding the company before rebuilding Corvette Racing. Without GM, Corvette Racing won't exist either. It's a shame but it's true.
07-15-2008, 05:47 PM
#6
Drifting
Thread Starter
Yes, I know Corvette is successful. We're not talking about Corvette. It's Corvette Racing that's in question. Are you suggesting that Corvette Racing actually MAKES money for GM?
07-15-2008, 06:05 PM
#7
Drifting
Member Since: Sep 2004
Location: Palm Beach Gardens FL
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Nascar will be affected the most.
GM to cut motorsports sponsorships amid struggles
Tue Jul 15, 2008 8:32pm BST
By Ben Klayman and David Bailey
CHICAGO/DETROIT (Reuters) - General Motors Corp will reduce spending on motorsports sponsorships as it cuts costs in an attempt to survive a sharp decline in industry sales, a top executive for the U.S. automaker said on Tuesday.
"There are some elements of motorsports that are very effective means of promotion and communication with certain customer segments. The ones that are less are the ones that will be ... scaled back," GM North America President Troy Clarke said at a news conference.
"It will be gradual, by and large, because we have contractual relationships or support relationships that we'll begin to wind down where that is appropriate," he added.
GM said Tuesday it will cut overall costs by $10 billion, suspend its stock dividend and sell up to $4 billion in assets. The restructuring was forced by high gas prices, the shift away from trucks and SUVs, the weakest U.S. auto sales in a decade and growing investor doubts about the Detroit automaker's ability to weather the downturn.
While Clarke declined to provide details about the planned cuts, GM spends millions of dollars annually with the National Association for Stock Car Auto Racing (NASCAR), the National Hot Rod Association, the American Le Mans Series and other groups.
NASCAR is most at risk because GM spends so heavily on the stock car racing organization's three leagues, involving cars and pickup trucks, analysts said.
GM spends about $120 million to $140 million a year on NASCAR, including sponsorships and promotions, advertising, and payments to teams and drivers, according to Peter DeLorenzo, publisher of website Autoextremist.com.
"The promotional aspect of their involvement with NASCAR is going to be the thing that comes under severe scrutiny," he said. "There are certain people, especially within GM, who have been licking their chops to get at the NASCAR budget."
After track sponsorships and promotions, U.S. automakers likely will move to trim national advertising related to NASCAR before finally possibly cutting back on spending for the teams and NASCAR's three leagues, DeLorenzo said.
NASCAR officials have watched the struggles of GM and the other U.S. automakers closely, but said their sport offers sponsors a great way to reach its more than 75 million fans.
"Attendance has held up well even amid the rising costs of traveling to races," spokesman Andrew Giangola said. "(TV) ratings have increased this season. NASCAR continues to have the most Fortune 500 involvement of any sport."
GM's Clarke said the automaker spends a large amount on motorsports, but "any good manager can go in and get 10 or 12 percent of something" in spending cuts.
A GM spokeswoman said the automaker has told some tracks over the past couple weeks it will discontinue sponsorships.
GM is the official auto sponsor at 12 of the 22 tracks where NASCAR holds its top Sprint Cup Series races, and the automaker also is the title race sponsor at the track in Richmond, Virginia. A track sponsorship typically includes an automaker supplying cars and cash, and receiving signage throughout the venue,
Most affected would be International Speedway Corp (ISC), which has sponsorship deals with GM at six of its tracks, and Speedway Motorsports Inc, with four GM deals. The France family owns 67 percent of ISC's voting stock and also owns NASCAR.
A Speedway Motorsports spokesman said GM already has told track officials in New Hampshire and Bristol, Tennessee, it will not renew sponsorship deals after they expire this season. ISC's track in Martinsville, Virginia, also has a sponsorship deal with GM that expires after this year.
Other automakers may follow GM. Ford Motor Co said spending cuts are likely.
"Our past analysis has shown that it still brings a good return on investment," Ford spokesman Kevin Kennedy said. "That doesn't mean you're not going to look at the overall program in light of other cuts the company is making. Racing is certainly going to take some cuts."
Chrysler does not plan changes in its NASCAR spending, but is monitoring the economy.
Toyota Motor Corp, which joined the top racing series last year, said it remains committed to its motorsports programs, but is reviewing all budgets.
GM to cut motorsports sponsorships amid struggles
Tue Jul 15, 2008 8:32pm BST
By Ben Klayman and David Bailey
CHICAGO/DETROIT (Reuters) - General Motors Corp will reduce spending on motorsports sponsorships as it cuts costs in an attempt to survive a sharp decline in industry sales, a top executive for the U.S. automaker said on Tuesday.
"There are some elements of motorsports that are very effective means of promotion and communication with certain customer segments. The ones that are less are the ones that will be ... scaled back," GM North America President Troy Clarke said at a news conference.
"It will be gradual, by and large, because we have contractual relationships or support relationships that we'll begin to wind down where that is appropriate," he added.
GM said Tuesday it will cut overall costs by $10 billion, suspend its stock dividend and sell up to $4 billion in assets. The restructuring was forced by high gas prices, the shift away from trucks and SUVs, the weakest U.S. auto sales in a decade and growing investor doubts about the Detroit automaker's ability to weather the downturn.
While Clarke declined to provide details about the planned cuts, GM spends millions of dollars annually with the National Association for Stock Car Auto Racing (NASCAR), the National Hot Rod Association, the American Le Mans Series and other groups.
NASCAR is most at risk because GM spends so heavily on the stock car racing organization's three leagues, involving cars and pickup trucks, analysts said.
GM spends about $120 million to $140 million a year on NASCAR, including sponsorships and promotions, advertising, and payments to teams and drivers, according to Peter DeLorenzo, publisher of website Autoextremist.com.
"The promotional aspect of their involvement with NASCAR is going to be the thing that comes under severe scrutiny," he said. "There are certain people, especially within GM, who have been licking their chops to get at the NASCAR budget."
After track sponsorships and promotions, U.S. automakers likely will move to trim national advertising related to NASCAR before finally possibly cutting back on spending for the teams and NASCAR's three leagues, DeLorenzo said.
NASCAR officials have watched the struggles of GM and the other U.S. automakers closely, but said their sport offers sponsors a great way to reach its more than 75 million fans.
"Attendance has held up well even amid the rising costs of traveling to races," spokesman Andrew Giangola said. "(TV) ratings have increased this season. NASCAR continues to have the most Fortune 500 involvement of any sport."
GM's Clarke said the automaker spends a large amount on motorsports, but "any good manager can go in and get 10 or 12 percent of something" in spending cuts.
A GM spokeswoman said the automaker has told some tracks over the past couple weeks it will discontinue sponsorships.
GM is the official auto sponsor at 12 of the 22 tracks where NASCAR holds its top Sprint Cup Series races, and the automaker also is the title race sponsor at the track in Richmond, Virginia. A track sponsorship typically includes an automaker supplying cars and cash, and receiving signage throughout the venue,
Most affected would be International Speedway Corp (ISC), which has sponsorship deals with GM at six of its tracks, and Speedway Motorsports Inc, with four GM deals. The France family owns 67 percent of ISC's voting stock and also owns NASCAR.
A Speedway Motorsports spokesman said GM already has told track officials in New Hampshire and Bristol, Tennessee, it will not renew sponsorship deals after they expire this season. ISC's track in Martinsville, Virginia, also has a sponsorship deal with GM that expires after this year.
Other automakers may follow GM. Ford Motor Co said spending cuts are likely.
"Our past analysis has shown that it still brings a good return on investment," Ford spokesman Kevin Kennedy said. "That doesn't mean you're not going to look at the overall program in light of other cuts the company is making. Racing is certainly going to take some cuts."
Chrysler does not plan changes in its NASCAR spending, but is monitoring the economy.
Toyota Motor Corp, which joined the top racing series last year, said it remains committed to its motorsports programs, but is reviewing all budgets.
Last edited by Dr Chill; 07-15-2008 at 06:18 PM.
07-15-2008, 06:13 PM
#8
Team Owner
Fat Lady has sung now. I bet you will see major cuts in NASCAR by all three from Detroit and total elimination of many other areas.
Funny how GM, Chrysler, and Ford have given millions upon millions to local communities over the years. Even last year with things being bad millions but when Honda donate 1 million the story was big and they played it up.
Tuesday, July 15, 2008
GM to cut salaried staff, dividend, retiree health care
The Detroit News
DETROIT -- General Motors Corp. Chairman and CEO Rick Wagoner outlined a new round of cost-cutting measures today, including white-collar job reductions and a suspension of the dividend, to bolster the automaker's cash position this year and next.
At a news conference at GM's Detroit headquarters, Wagoner, flanked by his top executives, said the new plan reflects an unexpectedly rapid deterioration in U.S. auto sales and assumes that the market will remain weak in 2009.
"Today's actions, combined with those of the past several years, position us not only to survive this tough period in the U.S., but to come out of it as a lean, strong and successful company," Wagoner said.
Advertisement
GM's stock, which has stumbled to historic lows in recent weeks, was up 7 percent at $10.05 at 1:15 EDT as the announcement quelled concerns about a liquidity crunch or possible bankruptcy at the largest U.S. automaker.
The latest cost-cutting plan affects the automaker's investors, salaried and hourly workers, and senior executives who lose their cash bonuses this year.
GM cautioned that it would report a "significant" second-quarter loss, on top of a $3.3 billion first-quarter loss, due to the market's weakness and the impact of the American Axle and other strikes.
The main elements of the plan are:
• A 20 percent reduction in salaried worker costs through a variety of means including normal attrition, early retirement and voluntary separation programs. GM's salaried workforce has declined by about 12,000 to 32,000 since 2000, when Wagoner became CEO.
"The vast majority of actions will come without involuntary layoffs," said Wagoner. He said he expected an early retirement offer to be successful because such packages haven't been extended to white collar workers for the past several years.
• Cutting health-care coverage effective Jan. 1, 2009 for Medicare-eligible salaried retirees, partially offset by increased pension payments.
• No pay raises for salaried workers through the end of 2009.
• No discretionary bonuses for executives.
• Reducing truck capacity and related component capacity. GM expects to cut 300,000 units by the end of 2009, about half by already announced actions and half by new steps, Wagoner said. Last month, GM said it would cut 170,000 trucks from its production plan later this year.
• Cutting and consolidating sales and marketing budgets, including motorsports activity.
• Holding engineering spending to 2006-07 levels through the end of 2009.
• Reducing capital spending.
• Suspending the dividend on common stock, to save $800 million through 2009.
Wagoner also said GM would defer until 2010 its payments to the UAW-run health-care trust agreed upon in last fall's contract negotiations, saving $1.7 billion.
"These measures will provide us with ample liquidity," Wagoner said. He called the acts difficult but said, "We need to take them as part of our plan to keep GM on track."
The company also wants to raise $4 billion to $7 billion through asset sales and financing using some $20 billion in assets as collateral. Examples of the assets include foreign subsidiaries, brands, a stake in its financing arm GMAC or real estate, Wagoner said. GM already has said it's reviewing a possible sale of its Hummer brand.
Wagoner mentioned several future products including a sport wagon and coupe version of the popular Cadillac CTS sedan; a new Buick sedan designed in China to be sold in the U.S. and a new Saab crossover.
GM's board of directors met Monday to approve the plan, which executives took weeks to prepare. The directors also reaffirmed support for the management team led by Wagoner and its newest turnaround plan.
The plan seeks to address concerns that have sent GM's stock to historic lows, such as the rate at which the company is burning through cash and concerns that its production plans are not adapted to the swift and radical changes taking place in the U.S. auto market.
"The hysteria began to build over the last couple of weeks across the whole industry," said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
GM's stock fell 5.4 percent Monday to finish at $9.38 a share, its lowest close in more than 50 years.
The automaker's sales have fallen 16.3 percent in the first half of the year, more than the auto market as a whole, and analysts say the automaker could face a liquidity crunch as early as next year.
Wagoner and other GM executives are holding a public press conference right now; come back to www.detnews.com for continuing coverage.
Funny how GM, Chrysler, and Ford have given millions upon millions to local communities over the years. Even last year with things being bad millions but when Honda donate 1 million the story was big and they played it up.
Tuesday, July 15, 2008
GM to cut salaried staff, dividend, retiree health care
The Detroit News
DETROIT -- General Motors Corp. Chairman and CEO Rick Wagoner outlined a new round of cost-cutting measures today, including white-collar job reductions and a suspension of the dividend, to bolster the automaker's cash position this year and next.
At a news conference at GM's Detroit headquarters, Wagoner, flanked by his top executives, said the new plan reflects an unexpectedly rapid deterioration in U.S. auto sales and assumes that the market will remain weak in 2009.
"Today's actions, combined with those of the past several years, position us not only to survive this tough period in the U.S., but to come out of it as a lean, strong and successful company," Wagoner said.
Advertisement
GM's stock, which has stumbled to historic lows in recent weeks, was up 7 percent at $10.05 at 1:15 EDT as the announcement quelled concerns about a liquidity crunch or possible bankruptcy at the largest U.S. automaker.
The latest cost-cutting plan affects the automaker's investors, salaried and hourly workers, and senior executives who lose their cash bonuses this year.
GM cautioned that it would report a "significant" second-quarter loss, on top of a $3.3 billion first-quarter loss, due to the market's weakness and the impact of the American Axle and other strikes.
The main elements of the plan are:
• A 20 percent reduction in salaried worker costs through a variety of means including normal attrition, early retirement and voluntary separation programs. GM's salaried workforce has declined by about 12,000 to 32,000 since 2000, when Wagoner became CEO.
"The vast majority of actions will come without involuntary layoffs," said Wagoner. He said he expected an early retirement offer to be successful because such packages haven't been extended to white collar workers for the past several years.
• Cutting health-care coverage effective Jan. 1, 2009 for Medicare-eligible salaried retirees, partially offset by increased pension payments.
• No pay raises for salaried workers through the end of 2009.
• No discretionary bonuses for executives.
• Reducing truck capacity and related component capacity. GM expects to cut 300,000 units by the end of 2009, about half by already announced actions and half by new steps, Wagoner said. Last month, GM said it would cut 170,000 trucks from its production plan later this year.
• Cutting and consolidating sales and marketing budgets, including motorsports activity.
• Holding engineering spending to 2006-07 levels through the end of 2009.
• Reducing capital spending.
• Suspending the dividend on common stock, to save $800 million through 2009.
Wagoner also said GM would defer until 2010 its payments to the UAW-run health-care trust agreed upon in last fall's contract negotiations, saving $1.7 billion.
"These measures will provide us with ample liquidity," Wagoner said. He called the acts difficult but said, "We need to take them as part of our plan to keep GM on track."
The company also wants to raise $4 billion to $7 billion through asset sales and financing using some $20 billion in assets as collateral. Examples of the assets include foreign subsidiaries, brands, a stake in its financing arm GMAC or real estate, Wagoner said. GM already has said it's reviewing a possible sale of its Hummer brand.
Wagoner mentioned several future products including a sport wagon and coupe version of the popular Cadillac CTS sedan; a new Buick sedan designed in China to be sold in the U.S. and a new Saab crossover.
GM's board of directors met Monday to approve the plan, which executives took weeks to prepare. The directors also reaffirmed support for the management team led by Wagoner and its newest turnaround plan.
The plan seeks to address concerns that have sent GM's stock to historic lows, such as the rate at which the company is burning through cash and concerns that its production plans are not adapted to the swift and radical changes taking place in the U.S. auto market.
"The hysteria began to build over the last couple of weeks across the whole industry," said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
GM's stock fell 5.4 percent Monday to finish at $9.38 a share, its lowest close in more than 50 years.
The automaker's sales have fallen 16.3 percent in the first half of the year, more than the auto market as a whole, and analysts say the automaker could face a liquidity crunch as early as next year.
Wagoner and other GM executives are holding a public press conference right now; come back to www.detnews.com for continuing coverage.
07-15-2008, 06:27 PM
#9
Team Owner
As much as I love Corvettes, and love racing, it doesn't make any sense for them to keep racing in ALMS. LMP would be great, but you've got to be willing to lose.......something they don't had a record of handling very well.
To me, racing isn't just about winning, it's about promoting your product and sponsers. You absolutely want to be competitive, but not dominant. If GM can race by those rules, I think LMP could be very valuable, and worth every penny.
I imagine the C6R budget is still pretty low relative to GM's overall racing and general budgets, so who knows. I think they need to find a reason to keep racing at this point, and the financial situation may not help matters, although probably isn't enough to kill it either.
To me, racing isn't just about winning, it's about promoting your product and sponsers. You absolutely want to be competitive, but not dominant. If GM can race by those rules, I think LMP could be very valuable, and worth every penny.
I imagine the C6R budget is still pretty low relative to GM's overall racing and general budgets, so who knows. I think they need to find a reason to keep racing at this point, and the financial situation may not help matters, although probably isn't enough to kill it either.
07-15-2008, 07:40 PM
#10
Safety Car
It's about time GM looked to trim fat out of middle/upper management. Their largely the ones responsible for the mess to begin with (sure gas prices hurt but GM had been shooting it's toes off one at a time for the last 20 years). Up until now those people have been getting bonuses while the company fell further and further down the ladder.
07-15-2008, 09:03 PM
#11
Melting Slicks
Member Since: Nov 1999
Location: MI
Posts: 2,073
Received 556 Likes
on
263 Posts
Cruise-In VI Veteran
Yest not forget.. The C6R program was in trouble for the 2008 season as there was not competetion in GT1 Class last year, notably it was an 11th hour deal that kept the program together for this year.
I don't believe GM will put the C6R's on the ALMS grid for next year as it was a hard business case to sell to the GM brass for this year (no competetion in GT 1 class).
The customer C5R's and C6R's are strong in Europe so there may be some "GM behind the scenes support" for the European teams, but as for the ALMS, the C6R's are done for 2009; and as far as the 24 hours of Le Mans for 2009, that will be left to the European customer C6R's to carry on the Corvette Racing honor.......
I don't believe GM will put the C6R's on the ALMS grid for next year as it was a hard business case to sell to the GM brass for this year (no competetion in GT 1 class).
The customer C5R's and C6R's are strong in Europe so there may be some "GM behind the scenes support" for the European teams, but as for the ALMS, the C6R's are done for 2009; and as far as the 24 hours of Le Mans for 2009, that will be left to the European customer C6R's to carry on the Corvette Racing honor.......
07-15-2008, 09:25 PM
#12
Safety Car
It's about time GM looked to trim fat out of middle/upper management. Their largely the ones responsible for the mess to begin with (sure gas prices hurt but GM had been shooting it's toes off one at a time for the last 20 years). Up until now those people have been getting bonuses while the company fell further and further down the ladder.
07-15-2008, 10:19 PM
#13
Team Owner
They are rip-offs at times when they fail miserably. Wagoneer has hit a perfect storm.
07-16-2008, 02:15 AM
#14
Le Mans Master
I hope it doesn't get scrubbed...
I know the average income of ALMS views is ~140k/yr or something like that. So there is money to be made from product buying fans (I'm assuming that is higher than the average NASCAR viewer, but that is an assumption)...but I don't know how the obvious ALMS Corvette loyalty compares to the Chevy following/purchasing trends in NASCAR nor how much the Corvette trickles down to selling other models.
I know the average income of ALMS views is ~140k/yr or something like that. So there is money to be made from product buying fans (I'm assuming that is higher than the average NASCAR viewer, but that is an assumption)...but I don't know how the obvious ALMS Corvette loyalty compares to the Chevy following/purchasing trends in NASCAR nor how much the Corvette trickles down to selling other models.
07-16-2008, 04:22 AM
#15
Part of Waggoner's programs is to:
"Reduce product development budget for 2009 to $7b by delaying launches of next generation trucks and SUVs and cutting V8 development"
Perhaps this means cutting the development of a next gen Vette V8.
Certain Corvette loving execs in Chevrolet put their jobs on the line by "creative accounting' to get the much delayed C5 developed. The situation is more dire for the shareholders today. Where is the development money going to come from this time round for the C7. That is the greater concern if GM survives in its present form.
Corporate racing for the Corvette is history until things improve IMHO.
However. it would be nice is they gave at least engineering support to LG for their product line given that he no longer has his Riley car and the funds that he put into a privateer Corvette team.
"Reduce product development budget for 2009 to $7b by delaying launches of next generation trucks and SUVs and cutting V8 development"
Perhaps this means cutting the development of a next gen Vette V8.
Certain Corvette loving execs in Chevrolet put their jobs on the line by "creative accounting' to get the much delayed C5 developed. The situation is more dire for the shareholders today. Where is the development money going to come from this time round for the C7. That is the greater concern if GM survives in its present form.
Corporate racing for the Corvette is history until things improve IMHO.
However. it would be nice is they gave at least engineering support to LG for their product line given that he no longer has his Riley car and the funds that he put into a privateer Corvette team.
Last edited by cebars; 07-16-2008 at 04:30 AM.
07-16-2008, 08:06 AM
#16
Drifting
Engineering support, as part of the defined job function, will be scarce. Since one of the actions to be taken is to cut salaried spending by 20%, that means that engineering design and development will be leaner. Wouldn't be surprised if the majority of the engineers currently at GM Racing and the like get put back into the passenger car programs.
07-16-2008, 09:51 AM
#17
Team Owner
Wednesday, July 16, 2008
NASCAR, marketing may get 2nd look
Analyst says GM must consider everything, but some cuts could be risky.
Bryce G. Hoffman and Eric Morath / The Detroit News
The cuts announced by General Motors Corp. Tuesday are not limited to jobs and factories -- they also will extend to marketing, event sponsorships and, potentially, even NASCAR.
"While we are committed to maintaining adequate resources to support launch products and brand advertising, we will implement significant reductions in promotional and event budgets, motor sports activities and back-office expenses," CEO Rick Wagoner told employees Tuesday morning, adding that these cuts are expected to save the company $2.5 billion by the end of next year.
Speaking to reporters after Wagoner's speech, GM North American President Troy Clarke said the company is taking a hard look at its support of activities like the Specialty Equipment Market Association's annual show in Las Vegas.
Advertisement
"We've got 20 hotrods at the SEMA show," he said. "Certainly, that's an important segment of the market, but do we lose something if we only had 10, or five or three?"
Nor would Clarke rule out taking a second look at GM's support of NASCAR. Asked about that, he said only that the company was not prepared to discuss it at this time.
Some of the NASCAR teams GM sponsors were already on the telephone Tuesday trying to find out how the cuts might affect them, said Jan Thomas, who handles communications for Chevy Racing.
"Everyone understands the market that we are in," she said. "We don't have any specifics. We'll just have to wait and see what happens."
Rebecca Lindland, an industry analyst with Global Insight Inc., said it makes sense for GM to reconsider everything, given the significant financial challenges facing the company today. But she said such moves are a gamble.
"It's a risky move to cut back on NASCAR. It's less risky to cut back on SEMA. It's a sexy show for the industry, but does it bring people into the showroom? That's what they need to look at," she said. "They need to quantify it and focus on where they can really see tangible benefits."
Lindland also expects GM to take a hard look at its sponsorship of high-profile events like Major League Baseball games. "There still is a lot of icing in their cake of marketing dollars," she said.
Clarke said GM will take a more focused approach to marketing its cars and trucks.
"There is a tendency to use 30,000-foot marketing initiatives and hope in the deluge of advertising that you touch people who are, in fact, your target customer," he said.
"In the case of the Malibu, we went through extensive efforts to identify who the target customer was, how they view their choices in their market, how those choices could be influenced and how they preferred to be communicated to. A lot of energy with Malibu was spent on communicating directly to a targeted customer, and it turned out to be extremely effective."
That approach could affect Detroit-area ad agencies like Warren's Campbell-Ewald, the agency of record for the Chevrolet brand. Mark Benner, director of corporate communications for the firm, said he could not comment on his client's moves.
Lindland said there are a lot of opportunities for GM to get more creative about spending advertising dollars, particularly in nontraditional advertising media like the Internet. "It's reapplying and reallocating the resources," she said. "It's not just cutting them."
Wagoner said the time has come for GM to rethink how it approaches all aspects of its business. "Typically when you say legacy costs, that's associated with pension and retiree health care obligations," he told reporters Tuesday. "But when you've been in business 100 years, other parts of the business have spending patterns that are more legacy in nature."
Detroit News reporter Tim Twentyman contributed to this report.
NASCAR, marketing may get 2nd look
Analyst says GM must consider everything, but some cuts could be risky.
Bryce G. Hoffman and Eric Morath / The Detroit News
The cuts announced by General Motors Corp. Tuesday are not limited to jobs and factories -- they also will extend to marketing, event sponsorships and, potentially, even NASCAR.
"While we are committed to maintaining adequate resources to support launch products and brand advertising, we will implement significant reductions in promotional and event budgets, motor sports activities and back-office expenses," CEO Rick Wagoner told employees Tuesday morning, adding that these cuts are expected to save the company $2.5 billion by the end of next year.
Speaking to reporters after Wagoner's speech, GM North American President Troy Clarke said the company is taking a hard look at its support of activities like the Specialty Equipment Market Association's annual show in Las Vegas.
Advertisement
"We've got 20 hotrods at the SEMA show," he said. "Certainly, that's an important segment of the market, but do we lose something if we only had 10, or five or three?"
Nor would Clarke rule out taking a second look at GM's support of NASCAR. Asked about that, he said only that the company was not prepared to discuss it at this time.
Some of the NASCAR teams GM sponsors were already on the telephone Tuesday trying to find out how the cuts might affect them, said Jan Thomas, who handles communications for Chevy Racing.
"Everyone understands the market that we are in," she said. "We don't have any specifics. We'll just have to wait and see what happens."
Rebecca Lindland, an industry analyst with Global Insight Inc., said it makes sense for GM to reconsider everything, given the significant financial challenges facing the company today. But she said such moves are a gamble.
"It's a risky move to cut back on NASCAR. It's less risky to cut back on SEMA. It's a sexy show for the industry, but does it bring people into the showroom? That's what they need to look at," she said. "They need to quantify it and focus on where they can really see tangible benefits."
Lindland also expects GM to take a hard look at its sponsorship of high-profile events like Major League Baseball games. "There still is a lot of icing in their cake of marketing dollars," she said.
Clarke said GM will take a more focused approach to marketing its cars and trucks.
"There is a tendency to use 30,000-foot marketing initiatives and hope in the deluge of advertising that you touch people who are, in fact, your target customer," he said.
"In the case of the Malibu, we went through extensive efforts to identify who the target customer was, how they view their choices in their market, how those choices could be influenced and how they preferred to be communicated to. A lot of energy with Malibu was spent on communicating directly to a targeted customer, and it turned out to be extremely effective."
That approach could affect Detroit-area ad agencies like Warren's Campbell-Ewald, the agency of record for the Chevrolet brand. Mark Benner, director of corporate communications for the firm, said he could not comment on his client's moves.
Lindland said there are a lot of opportunities for GM to get more creative about spending advertising dollars, particularly in nontraditional advertising media like the Internet. "It's reapplying and reallocating the resources," she said. "It's not just cutting them."
Wagoner said the time has come for GM to rethink how it approaches all aspects of its business. "Typically when you say legacy costs, that's associated with pension and retiree health care obligations," he told reporters Tuesday. "But when you've been in business 100 years, other parts of the business have spending patterns that are more legacy in nature."
Detroit News reporter Tim Twentyman contributed to this report.
07-16-2008, 10:56 AM
#18
Melting Slicks
Autoextremist is reporting that GM put up $$$ to make the Tony Stewart - Haas deal happen, and as a result Corvette Racing may take a big hit in the $$$ reductions
http://www.autoextremist.com/fumes1/
http://www.autoextremist.com/fumes1/
07-16-2008, 11:04 AM
#19
Racer
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Interesting comments, people have short or no memories or dont understand how economics works. Wagoner and Lutz etc have had several years without executive compensation in the last 5 years. GM builds what people want. With the lead time 4-5 years to develop new vehicles it cant turn around everything overnight. GM has had a number of fuel efficient vehicles but until now consumers have not demanded them. The hybrids that are in production now were initiated 4 to 5 years ago when gas was still relatively cheap but the writing was on the wall. The company is not perfect but is caught up in a rapidly changing economic situation brought on by liberal politics not allowing oil drilling, gas refineries and nuclear power to supplant our use of fuel. The liberals all along have despised SUV's, internal combustion engines and now their dreams are coming to fruition. What they hope for is that the average american is dumb enough to believe their rants against Big Oil, and George W. Bush and conservatives (capitalists) in general. Hopefully their socialist agenda will be exposed however you wont hear it on main stream media.
07-16-2008, 11:17 AM
#20
Racer
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Additional factor that is hurting vehicle sales for GM, Ford, Chrysler and Toyota is the economy. Rember this ...."Its the economy stupid"? The democrats (since they have a majority in the house and senate) have been in control of the economy for the last two budgets. You wont hear that on nightly news or major newspapers. Bad economic policies are not helping car sales.