Is GM Walking Away from Motorsports?

July 16, 2008

With all the news coming out of yesterday's big General Motors news conference, at least one significant topic managed to slip under the radar. And it leaves us wondering whether the increasingly downsized giant of an automaker will be walking away from its long-standing involvement in motorsports.

GM has traditionally been one of the most aggressive players in the global racing world, participating in series ranging from the NASCAR good ol' boy circuit to the sophisticated world of Le Mans endurance racing. But consider a comment made to employees by CEO Rick Wagoner:

"We will implement significant reductions in promotional and event budgets, motor sports activities and back-office expenses," said the CEO.

Considering GM is looking for ways to slash a hefty $10 billion in expenses by the end of 2009, it's not surprising that it might target the healthy motorsports budget. The latest turnaround plan has the automaker questioning just about every line item. For example, if GM traditionally exhibits 20 cars at its booth at the annual SEMA Show (the yearly gathering of the Specialty Equipment Marketers Association), might it be just as effective to bring 10 or even 5, asked Troy Clarke, president of GM's North American operations.

There's more than just budget cutting at work, however. Even if the automaker could dump as much money as it has in marketing and motorsports, Clarke said it would no longer be business as usual.

Consider two of GM's biggest success stories of this past year, the Chevrolet Malibu and Cadillac CTS. The automaker trimmed back on TV and other, traditional ad venues, using Internet, viral, and other marketing efforts that, Clarke explained, show "how we plan to go to market in the future."

And so, when it comes to racing, running an otherwise identical "race car of the future" with Chevy decals around Talladega just might not make as much sense anymore as it did in years past.

Few expect GM to drive away from racing entirely, but we could see a sharp cutback. And it could be echoed in reduced support for other sports sponsorships, such as Major League Baseball and professional golf, where Tiger Woods has become more recognizable as a symbol for Buick than the brand's own cars.

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