General Motors' Fiscal Plight Will Drain $600m from US Ad Economy

04 December 2008

DETROIT: As the crepitus of recession crunches on a decade of snafus by Motown's big three automakers, the rattle of begging bowls is heard loud in the land. In support of their plea for alms, the trio have filed plans detailing how they will extract themselves from their self-dug holes if Uncle Sam comes up with a multi-billion dollar lifeline.

Two of the trio – Ford and Chrysler – make no direct reference to marketing and advertising activity in their filings. A curious oversight for an industry more dependent than most on those arcane arts.

General Motors, however, seized the nettle, outlining a program that will trigger an outbreak of nervous tics along the madlands of Madison Avenue.

In the region of $600 million (€471.55m; £401.36m) will be slashed from GM's marketing budgets over the next three years, depriving four of its eight auto brands of all ad and promotional support. 

Instead it will focus its marketing and development efforts on its key quartet: Buick, Chevrolet, Cadillac and GMC. Out in the cold are Pontiac, Saturn, Saab and Hummer although Pontiac will continue as a specialty niche brand within the Buick-GMC unit. 
Saab has already been earmarked for sale but the fate of Saturn and Hummer is unspecified

Of GM's $30.2bn current-year structural costs, marketing spending will account for $3.2bn. Come 2012, however, $600 million will have been amputated from that figure, shrinking ad and promotional outlay to $2.6bn.

Also by that year, GM will have forty vehicle variants, down from 48 this year and 63 in 2004.

Data sourced from AdWeek (USA); additional content by WARC staff