You just know it’s got to be GM. And so it is. The words flew out of the mouth of Steve Tihanyi, the man who oversees GM’s sponsorships. Or, more accurately, the elimination of GM sponsorships. After all, in Bailout Nation, you can’t be seen to be having a good time on the taxpayer’s nickel. (Although GM spokeswoman Kelly Cusinato helpfully pointed out that there are no advertising or marketing restrictions attached to the government loans or the company’s viability plan.) The latest casualty: GM’s 25-year sponsorship of the NCAA men’s basketball tournament. Bloomberg:
The company will slash by at least 60 percent on-site spending at the Final Four, even though this year it will be held blocks from GM’s headquarters in Detroit. The company is trimming dealer-incentive trips to the championship rounds and billboards downtown. Tihanyi wouldn’t comment on how much the 60 percent cut in on-site promotion and entertainment would save.
’Cause that would be telling. Oh, and Bloomies forgot to mention that GM’s not going to use its swanky skybox seats at this year’s final four. What’s the bet they’ll go empty?
I just can’t help but wonder what all those basketball fans are going to do downtown detroit. Does Detroit even have enough hotels and restaurants to satisfy them all?
Funny – how much unseen damage all this does.
A friend of mine was told to mothball (not lease out) the corporate jet the other day by his board. They have taken no TARP money, but are concerned about “appearances.”
The retelling of the story to my Obamanian neighbor was met with glee…until I mentioned that two pilots, an attendant, a mechanic and a scheduler were out of jobs.
Great to be righteous…better to be thoughtful.
Well, at least the “Hope” poster in the art store below me has been pulled from the window.
This is but one of what will be many “can’t win” stories for GM. Event marketing and sponsorships are forms of advertising; some of which works, some doesn’t.
Yet, now with ~300 million Board of Directors members (give or take a few illegal aliens who don’t pay taxes) scrutinizing every corporate decision from substantive to trivial…. whatcha gonna’ do?
A couple points:
I’m willing to bet that GM gets the luxury box on the cheap, if not free, because they are a major sponsor of the NCAA and the tournament in general. So how much would not occupying the luxury box save them? The only thing I could see is the drinks and food consumed that are paid for by the box owners during each event. Perhaps it is just to appear serious.
Interesting that it is being held at Ford Field. I think the NCAA does use the corporate sponsor names for stadiums used, so CBS will be referring to it as Ford Field.
@AG
I know someone who has tickets to the Final Four and they have a hotel in Ann Arbor and plan on going to Windsor for fun.
Dont’ forget, GM is bankrupt and on life support thanks to extorting tax dollars. Sorry, but bankrupt companies don’t get to sponsor anything.
“Dont’ forget, GM is bankrupt and on life support thanks to extorting tax dollars. Sorry, but bankrupt companies don’t get to sponsor anything.”
Well, on the tax extortion, GM should never have received our tax dollars. It was a political decision. The granters of said tax dollars are guilty too – both of them.
But, if the bankrupt company continues to market and promote their product, why should they be barred from the form of promotion known as sponsorship?
(Although GM spokeswoman Kelly Cusinato helpfully pointed out that there are no advertising or marketing restrictions attached to the government loans or the company’s viability plan.)
While the PR flunky is correct, when you are on the public dole, it is probably a good idea to consider the ramifications of your comment before you spew to the world. You would think a PR flunky would have learned that in PR 101. Wait, this is GM we are talking about. So, okay, never mind. Arrogance is as arrogance does.
# yankinwaoz :
Dont’ forget, GM is bankrupt and on life support thanks to extorting tax dollars. Sorry, but bankrupt companies don’t get to sponsor anything.
While I agree with you in principal, you may want to consider how much money GM (and Ford, and Cry-slur) spend on the “turn left” crowd, aka, NASCAR. I am sure that the R&D and support monies they spend (let along sponsorships for races like Michigan) eclipse what GM spends sponsoring the NCAA tournament.
Bruce
@dgduris
A friend of mine was told to mothball (not lease out) the corporate jet the other day by his board. They have taken no TARP money, but are concerned about “appearances.”
Boards that are more concerned about “appearances” than the health and well-being of their companies are part of the problem affecting this country.
Businesses that are not taking public money should make decisions that are right for their company, their employees, and their shareholders/owners. “Appearances” have no place in the board room – in the marketing department maybe, but not the board room.
If the BOD at GM had made the hard decisions a decade ago, GM might not be staring death in the face.
-ted
bankrupt companies don’t get to sponsor anything.
Deep sigh … Sponsorship is but one form of advertising and sales promotion. It’s part of a Marketing Manager’s bag or tricks.
But bankrupt companies – that are still open for business – aren’t allowed to advertise or promote their businesses anymore?
That’s a surefire self-fulfilling prophecy.
@zerofoo,
Unfortunately, the political fashionistas are promulgating the no-corporate jet and success = evil philosophies. In such a media-driven culture as ours – even B’s of D’s are not immune from sensitization to these whims of pop culture.
Too Late.
No problem with jets success or any of the other goodies that come with success but GM is not a success. If there were no bailout bucks GM would be right now in CH 11 if not CH 7. Go CH 11 and keep your sponserships and jets. If you want my money then no you don’t get them. Fly freaking coach.
becurb-Ah, NASCAR…but that is soooooo important to the buisness.
You know, win on Sunday sell on Monday has led to great success stories like the Monte Carlo!
Bunter
I don’t have a problem with advertising and/or marketing budgets however, what we are seeing here is how these departments have been used as a type of off the books employee benefit program – usually for a special few.
GM is not alone in this….
Do ‘favored’ dealers really need an all expenses paid basketball vacation in order to convince them to sell some damn cars? I bet a break on the dealer floorplan would be just as motivating and would make business sense.
An actual bigger issue – as discussed at length at AutoExtremist – is that GM has not spent its Ad money very wisely or effectively over the years.
There is just so little benefit in so much that they sponsor.
I’m with doughnut re. GM possibly having little benefit vs. cost … as with charitible spending in developing lands, many think spending more results in more results faster … but it has been posited that when there is more money than places to (effectively) spend/invest it, that the money gets wasted (this has effectively been proved by the current economic crisis and its root cause(s)).
Regarding the BOD ordering mothballing vs. sub-letting this particular asset, I find this story hard to believe … nobody does that unless they want to dump the staff and hold the asset because of a weak market.
I just can’t help but wonder what all those basketball fans are going to do downtown detroit. Does Detroit even have enough hotels and restaurants to satisfy them all?
Two large downtown hotels have been renovated and reopened recently, the Book Cadillac and Fort Shelby. In addition, the three Detroit casinos are now in their permanent structures with attached or adjacent hotels. Of course many attending the Final Four will be staying in suburban hotels. Those staying downtown have their choice of four casinos (counting the one across the river in Windsor) as well as a number of watering holes and eateries that cater to Red Wings and Tigers fans. Ford Field, where the basketball tournament will be held, is located across the street from Comerica Park, where the Tigers play, and just across Woodward from the Fox theater. That area has bars and restaurants as well.
Ironically, for a long time, Detroit missed out on convention business because there weren’t enough hotel rooms downtown. Now that there are enough hotel rooms downtown, Cobo Hall’s need of renovation and expansion gets in the way of new convention business.
# yankinwaoz :
February 27th, 2009 at 11:25 am
Dont’ forget, GM is bankrupt and on life support thanks to extorting tax dollars. Sorry, but bankrupt companies don’t get to sponsor anything.
Sorry, but I think you’re confused about bankruptcy.
Though GM hasn’t yet filed for some form of protection from creditors, the idea behind Chapter 11 bankruptcy is to allow a company to reorganize so that it survives in some fashion, which is best for all stakeholders. While the company is in Ch. 11 proceedings, it still has to operate as a business and try to sell its goods or services, so it still has to advertise. I don’t think there’s a bankruptcy judge in the country that would prohibit a company in Ch. 11 from any and all advertising or marketing.
This site is supposed to be about truth and the truth is that advertising and marketing is one area where the domestic automakers have started doing things differently than how they’ve been done in Detroit. For the past couple of years, the domestics have been pulling big chunks of dollars back from broadcast advertising and also trying to get a handle on internet advertising and marketing. There’s been increased emphasis on the most bang for the buck. TV and radio stations have already felt the pinch as marketing dollars have shifted from broadcast.
The financial crisis the domestics face is accelerating the process, forcing a review of all marketing expenses.
The Final Four announcement got headlines but is small beer compared to the announcement from GM that it is cutting marketing expenses by $800 million. It’s not clear how much of that is advertising and promotion, because the thousands of dollars per car in incentives is booked as a marketing expense, but it’s clear that a lot of advertising and promotional costs will be axed.
As the good Doctor Johnson said, “The prospect of the gallows concentrates a man’s mind wonderfully.” Add the fact that GM is operating under a microscope with the magnification provided by 300 million taxpayers, and I suspect that every marketing dollar will be examined for cost effectiveness and how it will make the company look.
FWIW, corporate suites and other hospitality type promotions can be effective marketing. DuPont spends >$10 million/yr on sponsoring Jeff Gordon’s NASCAR team and related promotional activities. Those activities include corporate suites and hospitality tents at races. I’m not sure if it’s still the case, but when I worked for DuPont Automotive, the sponsorship dollars came out of the Automotive/Refinish SBU, not Wilmington. While the company as a whole was getting great exposure from the #24 car, Refinish wanted to make sure their own money was well spent so they started tracking sales of paint to paint supply and collision shops whose personnel were invited to hospitality events at NASCAR races. The data was incontrovertible (or at least it was at the time), DuPont’s increased paint sales to these businesses alone covered the cost of the NASCAR sponsorship.
Cobo Hall’s need of renovation and expansion gets in the way of new convention business.
Blame Conyers (the other Conyers) for that one. Yo, she be keep dat shit weel! Just another nail in Detroit’s coffin…of course, they have been putting nails into Detroit’s coffin since before 67.
Monica Conyers is a preening race pimp, whose stellar academic career includes a law degree from the vaunted University of the District of Columbia. Last night on the tv news she said that the governor (a liberal Democrat) was treating Detroit like a “plantation”.
Monica is more of an embarrassment to Detroit than Kwame was. The woman has no shame. She uses her police escort to carpool her kids to a fancy private school in the suburbs. I sure as hell can’t afford to send my kids to Cranbrook but Monica and her hubby John will be the first to say how their kids are the victims of racism.
The sad truth is that there are about 900,000 people left living in the city limits of Detroit. With only 25% of kids graduating from high school (and God knows how minimal the graduation requirements are), it’s been estimated that 50% of the adult population of Detroit is functionally illiterate. Toss in a carefully nurtured sense of race grievance towards the suburbs, it’s easy to see how petty demagogues like Conyers keep getting reelected to positions of real power.