Test Track Losing GM Sponsorship?

[Melanears]

From Orlando Sentinel

Jason Garcia | Sentinel Staff Writer
March 4, 2009


GM's last lap on Epcot's Test Track?

One of Walt Disney World's marquee sponsorship deals is in jeopardy.

Struggling U.S. auto giant General Motors Corp. is considering pulling out as sponsor of Test Track, the high-speed Epcot attraction among the most popular rides in all of Disney World.

A 10-year contract between Disney and GM expires this year. And GM, which lost $31billion last year and is relying on loans from the federal government to stay in business, may not be able to afford to renew the pact.

Disney and GM are negotiating new terms but have so far been unable to strike a deal. GM has indicated it wants a resolution by the end of this month.

"We're still in discussions with them and haven't made a decision," GM spokeswoman Kelly Cusinato said. "It's definitely one that I think people are doing everything they can to preserve."

It is a lucrative partnership for Disney: Though neither company would discuss the terms, Automotive News reported last month that GM pays Disney close to $5million a year.

GM and other original corporate sponsors in Epcot, which opened in 1982, paid as much as $35million over 10years for their initial contracts, according to a former Epcot executive. The German engineering giant Siemens AG is currently paying Disney a reported $100million over 12years to sponsor Epcot's Spaceship Earth attraction.

Disney would not discuss details of its talks with GM.

"We continue to have a relationship with General Motors and are having ongoing discussions about continuing our relationship," spokeswoman Kim Prunty said Tuesday.

For GM, the marketing advantages of its Test Track sponsorship are obvious. The attraction is a top draw in Epcot, which lures an estimated 11million visitors each year, making it the second-busiest theme park at Disney World and the third-busiest in the United States.

The ride features vehicles, controlled by onboard computers, that carry guests through a series of simulated car-safety tests. During the 5 1/2-minute ride, guests are exposed to 100-degree temperature changes; bounced around hairpin turns; and hurtled through a final, outdoor sprint that reaches 60mph — the fastest top speed of any ride at Disney World.

Logo everywhere
GM's presence is everywhere. The carmaker's corporate logo is splashed throughout the pavilion that houses the ride. The queue includes a room featuring aerial photos of GM "proving grounds" around the world, from a desert track in Mesa, Ariz., to a cold-weather course in northern Ontario. Guests exit through a swanky showroom displaying more than a dozen GM vehicles and a gift shop hawking pink Cadillac ball caps, die-cast Corvettes and electronic-toy Hummers.

There are even computer terminals and a customer-service desk for guests to order GM sales brochures.

When the ride debuted in March 1999, GM's then-vice president for marketing and advertising in North America said it would "help build brand awareness, corporate image and ultimately introduce new customers to GM dealers and our products."

The benefits extend beyond advertising. Disney also purchases GM vehicles — including Chevy Trailblazers and Silverados and Saturn Vue hybrids — for its corporate fleet as part of the sponsorship deal, according to people familiar with the arrangement.

But as valuable as the pact is to GM, the company may no longer be able to afford it. The automaker has warned that it could go bankrupt without as much as $16.6billion in loans from the U.S. government — on top of $13.4billion in taxpayer loans it has already received.

GM would not be the first major corporate sponsor to drop out at Epcot. General Electric, ExxonMobil and AT&T are all former sponsors, while newcomers include Siemens and Hewlett-Packard. Theme-park analysts also say they are certain Test Track would continue operating even if GM pulled out, as the ride's capacity is vital to managing park crowds.

But losing GM would further pressure profits at Disney World, which is relying on deep hotel and ticket discounts to keep visitors coming despite the struggling economy.

Replacements?
Finding a replacement sponsor also could be tricky. A rival company is unlikely to want to take over a GM ride without making substantial changes, said Steve Baker, a former Epcot executive in charge of corporate sponsorships.

"Anybody coming in paying that kind of money would want their own fingerprints," said Baker, who is now president of Baker Leisure Group, an Orlando themed-entertainment consulting firm.

The most likely targets for a replacement sponsor at Test Track would be other car manufacturers. But the entire industry is struggling as the global recession depresses auto sales.

Marketing executives at Toyota Motor Corp. have discussed internally the prospect of sponsoring Test Track. But Joe Tetherow, a spokesman for Toyota Motor Sales USA, said "it would be premature to speculate on what's going to happen."

"We're cutting a lot of costs right now," Tetherow said. "But, obviously, there's going to be opportunities from time to time that come along that we might want to take a look at."

[Ian]

Nooooooooooooooooooo!!!

My VIP ride access would be no more!!!

[Goofeygal]

OH NO same here.

[BMan62]

Maybe they could get a government bailout?

Hopefully, a deal could be worked out to keep TT running without any stoppages due to sponsorship.

[Stu29573]

Originally Posted by BMan62

Hopefully, a deal could be worked out to keep TT running without any stoppages due to sponsorship.

Sure they will! They would never let a whole building go dark because they couldn't find a sponsor...Oh, wait...

[Polynesian Dweller]

Nobody should be surprised that this might happen (still a might at this point). GM is barely alive on life support and its got to be difficult to justify this expense when you are getting rid of dealerships and employees.

For that matter, giving up 43% of revenue on the 4/3 deal doesn't exactly put Disney in that great shape either.

[brownie]

I was just speculating about this with my wife on Sunday! I'd be surprised to see GM's sponsorship continue at this point. I don't really see any of the automakers in a position to take in on should GM pull out. It's a shame, I'd like to see GM continue as the sponsor.

[azcavalier]

I could see Ford or Toyota taking this on. Obviously, Toyota was mentioned in the article. Ford, on the other hand, is an american company, and during the whole bailout precedings they said that the bailout would be a great backup plan, but they actually think that they can return to profitability without the bailout funds. It sounds like they're in better shape than most. Just a thought. I don't see how Disney would close Test Track.

[DizneyRox]

I can't imagine GM maintaining sponsorship. I don't expect them to survive much longer so they probably don't have much choice.

I never really understood the whole sponsorship thing. I can't recall ever making any kind of purchase decision based on ride sponsorship. In fact, if they gave me a GM car at the end of the ride, I would just sell it and buy something else I wanted.

It will be interesting what Disney will have to do to remove the sponsorship tie ins. Will they go through the expense of removing them, or just let it go. Obviously the big hitters will go, but even in SSE, the AT&T logos were all over long after they dropped out.

[GrumpyFan]

I've been wondering about this. It will be interesting to see what happens here.

GM and Chrysler are both in pretty bad shape right now, and Ford is only in slightly better shape. I wouldn't be surprised to see all three of them merge into one in the next 5-10 years, unless they drastically change the way they run their business.

The other car makers aren't doing too good right now either. In fact, the only car maker who actually made money in the last quarter was Hyundai. Go figure. I can't see them taking over Test Track at this point, but who knows? In this economy, anything could happen.

[TheRustyScupper]

1) Unless Disney really backs off on price, I think it will happen.
2) Of course, if WDW backs off, then other sponsors will want reductions.
3) Let's see what happens.

[Ian]

Originally Posted by DizneyRox

I can't imagine GM maintaining sponsorship. I don't expect them to survive much longer so they probably don't have much choice.

Not that I'm saying I expect their sponsorship deal to continue, but you can't possibly be serious about not expecting them to survive much longer.

Without injecting politics into the discussion, you can trust me when I say that there is no way our President, who got elected on the backs of the unions, will ever, in a million years, allow GM to go belly-up.

Not to mention that there is actually a national security interest in their survival. Auto manufacturing plants are key to a large militarization effort, should one ever become necessary again.

I would say there are few certainties in this economy, but one of them is definitely that General Motors will continue to receive government support while they retool and refocus.

[Tinkerbellaella]

Originally Posted by DizneyRox

I never really understood the whole sponsorship thing. I can't recall ever making any kind of purchase decision based on ride sponsorship. In fact, if they gave me a GM car at the end of the ride, I would just sell it and buy something else I wanted.

I completely agree with you.

Granted, I am not a frequent visitor to Disney World, but before this discussion I couldn't have told you who or if the ride was sponsored by a car company. Are a lot of the rides sponsored by other companies? If so, won't those rides be in jeopardy in this economy?

[Dixie Springs]

"T3" (Toyota Test Track). Even though they're begging their own government for $$ too, it's possible....

[lockedoutlogic]

Originally Posted by Tinkerbellaella

I completely agree with you.

Granted, I am not a frequent visitor to Disney World, but before this discussion I couldn't have told you who or if the ride was sponsored by a car company. Are a lot of the rides sponsored by other companies? If so, won't those rides be in jeopardy in this economy?

not only all the pavilions in the futurewold side.....but all of the country pavilions also paid to have their spaces in EPCOT originally...

Basically....the construction was so overblown and EPCOT was such a different concept in 1980 that Disney used the leverage of their new product to get corporations (most of which are now long gone) and the representative countries to pay operational costs in exchange for exposure in EPCOT

It was a good plan....but it will be difficult to maintain sponsorship in the future

GM will not be able to support test track....and if they don't....i would guess that Disney might just pull the plug. the ride has been in many ways an out and out disaster....a reportedly 300 million went into the planning, construction, and redesigns over the 8 years of development. By far the most expensive themepark attraction in history. And one that has never been received that well and can't stay operation for more than an hour.

As far as GM....I'm not sure there is any feasible way to save it. They've just not evolved far enough to stay competitive.

Unions are a big part of it....because workers are being paid 60 years of benefits for 30 years of work....and that can't be self-sustaining.

But GM is to blame at least as much. One word for you: Hummer
They deserve it.

the real stink of it is (and i'll try not to get political) is that the 5 million american workers that are almost entirely supported by the Big 3.....if those jobs go, we will never get anything equivalent back.
We don't make anything....we haven't for years...we are a bunch of soft handed blowhards (myself included) that go to offices with our Iphones or Blackberrys and do no substitive work.

We've become ridiculously spoiled....lots of money for no physical work.....spent on imported luxury goods and frivilous activities (cough....cough....cough)

GM is gone from EPCOT...probably from the rest of the world map as well....and i don't think test track will be too far behind....unless Toyota or Hyundai feels like getting some ego-boosting signage

[caryrae]

I never thought of this before and honestly don't know but what do the Sponsors for the attractions do? Do they pay for the attraction and to keep it going?

[ayeckley]

Originally Posted by Ian

Not to mention that there is actually a national security interest in their survival. Auto manufacturing plants are key to a large militarization effort, should one ever become necessary again.

Although that was certainly true in WWII, I don't believe it is anymore. Back then, the auto plants had a full range of manufacturing capabilities (foundry, casting, forging, machining, assembly, etc.). Modern auto plants no longer have those end-to-end capabilities - they have been spun off to specialty manufacturers and not really part of the "big three" anymore. The only *potential* exception I can think of off-hand in the US would be Ford's River Rouge site and the nearby supporting plants.

I often wonder if anyone in DC is tasked with thinking about things like this anymore...

[Crow]

i cant see GM justifying the sponsorship if they are in such bad shape.
just wonder what will happen to the ride.

[lockedoutlogic]

Originally Posted by caryrae

I never thought of this before and honestly don't know but what do the Sponsors for the attractions do? Do they pay for the attraction and to keep it going?

yes....in a nutshell....disney puts out a fancy presentation on how much exposure products and brands get....

and when the companies ink....the funds are used directly for operational costs

[lockedoutlogic]

Originally Posted by Crow

i cant see GM justifying the sponsorship if they are in such bad shape.
just wonder what will happen to the ride.

I think it would've have gone sooner or later anyway....

this might be a catalyst.

If you ask me....time for a retrofit: World of Motion!!!