Test Track Losing GM Sponsorship?

[lockedoutlogic]

Going back to the original post, GM paid Disney $35 million over 10 years in 1982? In a press release I read online, Automotive News claims GM is paying Disney $5 million a year. So, if it still is a 10 year deal, I assume $50 million is being paid to Disney, not $10 million that we been tossing around. That is a lot of money.

they paid 3.5 per year for 10 years...35 million from 82-91.....world of motion was razed in 91 and i assume the test track concept....or whatever ambitious project idea that devolved into test track....was negotiated between GM and Disney at that time...

I can only assume that Disney promised GM the greatest amusement park ride in history....one so famous and historic that it ranked above the Coney Island Cyclone, Pirates of the Caribbean, and the Beast...
And GM assumed that would lead to such joy for GM that they would be able to sell Geos and Saturns to thrilled riders off a "show dump" carlot behind the odyssey....undoubtedly driving up World Drive to check in to their $400 a night 1971 constructed room at the Contemporary....

But anyway....the second sponsorship deal probably was for about 5 mil a year in operation expenses and probably a portion of the ride development costs....in exchange for disney buying 10+ million in trucks and vans over 10 years....

If their deal expires in 2009 or 2010---that's probably about right...as i'm sure they were negotiated through about the first 10 years of test track....

So disney is probably sitting on one side of the table asking for 10 million for 10 years....

And GM is sitting on the otherside (flanked by two congressman, a rep from the Federal OBM, a Treasury rep, an SEC rep, and a FBI agent) asking: "How on earth can we do that now?"

[lockedoutlogic]

TT is popular. What locked is trying to say is, the numbers are very deceiving. We have to stop looking at 70 minute wait times and look at it through management eyes. They don't care about wait times, they care about money. And TT is a ride that has major issues. Tires are constantly replaced, the computer system old. The ride is a maintenance nightmare. This isn't from my point of view. This comes from people involved with the attraction. Will management, who is always looking to cut costs, going to allow a sponsorless TT run for the next 5 to 10 years? Probably not. The ride isn't going anywhere in the next year or two, but, without a sponsor,TT will go the way of other sponsorless attractions. Just look at WoL.

Thank you for summing it up more succinctly than i could....

Test Track gets riders....not as many as most people seem to think....but it does well...
but that isn't disney's barometer....
It is bad technology and a headache for management....
This is well documented and 100% correct....not really up for debate.
The costs are staggering and will continue to be so....
and it's about costs and profits in the parks....not waitt imes, smiling faces. or making magical memories

[Bethanymouse]

Thank you for summing it up more succinctly than i could....

Test Track gets riders....not as many as most people seem to think....but it does well...
but that isn't disney's barometer....
It is bad technology and a headache for management....
This is well documented and 100% correct....not really up for debate.
The costs are staggering and will continue to be so....
and it's about costs and profits in the parks....not waitt imes, smiling faces. or making magical memories

Unfortunately, I have to agree with you. TT has always been known to have long wait times and frequent break downs. A CM a few years ago told us it breaks down more often than it runs smoothly. I dont know what disney will do with the ride, if another sponsor will pick it up or not. Either way, it will probably need to be revamped. It is costing disney more money than they thought it would.

[Ian]

In a press release I read online, Automotive News claims GM is paying Disney $5 million a year. So, if it still is a 10 year deal, I assume $50 million is being paid to Disney, not $10 million that we been tossing around. That is a lot of money.

No, I was already thinking $10 million per year, not $10 million over 10 years.

Again ... these numbers are near meaningless for a company the size of GM.

Do you know what GM spends a year on healthcare expenses for their employees?

$12 billion. That's billion with a "b."

Now how's that paltry $10 million look?

[MOJoe]

Has anyone brought up the fact that after you exit the actual ride you enter a General Motors Showroom. Only thing missing is the salesmen. So from a marketing standpoint, spending 10 million a year for the opportunity to have hundreds of thousands of people look at, touch and even sit in one of your products is a fair price. GM may have spent that much money on Superbowl TV ads alone last year. Just to get you into a dealership.
I am hopefull that GM survives this severe economic downturn. But if they don't, some company should see the value of this type of exposure.

[mrte62]

Based on GM's own internal auditors, there may not be a GM to save much longer.

Sorry to say, but things are going to get a lot worse - in all industries.

[Ian]

Has anyone brought up the fact that after you exit the actual ride you enter a General Motors Showroom. Only thing missing is the salesmen. So from a marketing standpoint, spending 10 million a year for the opportunity to have hundreds of thousands of people look at, touch and even sit in one of your products is a fair price. GM may have spent that much money on Superbowl TV ads alone last year. Just to get you into a dealership.
I am hopefull that GM survives this severe economic downturn. But if they don't, some company should see the value of this type of exposure.

Oooh! Oooh! Pick me! I did!

That's exactly the point I've been trying to make as well. And also, you can buy a car there ... or at least arrange to buy one at a dealership near your home. So functionally it amounts to a big showroom.

[Aggie97]

The auditors' going-concern statement simply confirms what everyone has known for quite some time: that GM may not be able to continue operations under their current financial situation, and that investors should be aware of the risk.

Sometimes a going-concern statement is issued in the hopes of expediting financial assistance... which would seem likely in GM's case.

Neither its issuance nor Chapter 11 reorganization necessarily means that a company will "go out of business."

We don't know whether or not GM will continue their Test Track sponsorship under these conditions. But I still contend that smart sponsorships -- and Test Track provides a lot of positive exposure for a small price tag -- do have value for corporations, even those that are struggling.

[lockedoutlogic]

Has anyone brought up the fact that after you exit the actual ride you enter a General Motors Showroom. Only thing missing is the salesmen. So from a marketing standpoint, spending 10 million a year for the opportunity to have hundreds of thousands of people look at, touch and even sit in one of your products is a fair price. GM may have spent that much money on Superbowl TV ads alone last year. Just to get you into a dealership.
I am hopefull that GM survives this severe economic downturn. But if they don't, some company should see the value of this type of exposure.

Alot of good it does them....
I don't know if you've noticed....but nobody is buying that junk anymore

[lockedoutlogic]

Based on GM's own internal auditors, there may not be a GM to save much longer.

Sorry to say, but things are going to get a lot worse - in all industries.

i legitimately agree....at somepoint the political price will be too big to prop up large corporations that the consumers are not in a position - nor won't be for a couple of years at least - to save.
GM is practically the posterchild for this....
It's a longstanding american company with tremendous economic impact...but unlike AIG or Citibank....nobody believes that saving them is a national necessary evil.
It's hard....they have fallen behind due mainly to stubborness, greed, and stupidity
And they are burdened because their retired blue collar workers get basically 80% pay and full medical (for everyone) from retirement to the day they die...
That's gonna be a hard pill to swallow if the government tries to prop or buy them up....
nobody gets that kinda benefits anymore other than government employees.....
I think the political storm will bury any dems (and republicans....remember the auto industry enables the oil industry as well) who try to save it....very soon.

[Ian]

Alot of good it does them....
I don't know if you've noticed....but nobody is buying that junk anymore

I don't want to start a big debate about this, but you're just totally wrong.

General Motors sells the second most vehicles on the planet, behind Toyota by a sliver. And Toyota just surpassed them like 12 months ago.

Were they caught with their pants down by the high gas prices? Yes. Did anyone see that coming? No. Were people gobbling up their SUV's, leading to big profits for them before that? Yes.

GM's issues go back decades and decades and are mostly tied directly to their union obligations. I'm not saying that's the only reason they're failing, but it's definitely a part of it.

Bear in mind, too, that they used to wholly own GMAC, which was a cash cow for them when the mortgage biz was booming. Now that's gone, as well, so they've gotten a bit of a triple whammy.

But dude ... you can't say "no one is buying that junk anymore", because A. their cars actually have pretty decent quality scores and B. they still sell a heckuva lot of cars.

I understand you have very strong opinions on things, but you really very often confuse those opinions with facts. I think you've done that two or three times in this thread alone.

[DizneyRox]

GM is very big into fleet sales. I would be interested to know how much of their sales are to rental agencies, municipalities, etc. vs real people. Granted a sale is a sale, but in this economy, that's got to impact your bottom line even faster. I know many people who won't touch all the "American Garbage" myself included. I'm in the market for a car right now, and a GM dealership hasn't even cross my mind. There's was one literally across the street from my employer, until just last week. The car carriers came one day and took everything that would start.

[Ian]

I don't know where you're home base is, but there are areas of the country where you'd be more likely to find people driving with no pants on vs. driving a foreign car.

It's very regionalized, but there are still many areas of the country where American cars reign supreme.

In fact, outside of the Northeast and California that's pretty much the case.

[BMan62]

I don't know where you're home base is, but there are areas of the country where you'd be more likely to find people driving with no pants on vs. driving a foreign car.

It's very regionalized, but there are still many areas of the country where American cars reign supreme.

In fact, outside of the Northeast and California that's pretty much the case.

My problem is that none of the US automakers make a good 4-wheel drive vehicle, other than trucks. Where I live 4-wheel drive is almost a necessity in inclement weather - rain or snow. Front wheel and all-wheel drive vehicles just don't have the 'oomph' to climb the hills to get me where I need to go - home-work-home.

I used to drive all Chevrolet pick-ups - full size (Silverado) and the old S10 models - but downsized because I didn't need the hauling capacity and wanted better mileage. DW has been a Subaru lover for years and actually got me interested in them - before they went all AWD. I currently drive a Nissan Xterra and love it - better gas mileage than my old S10 and much better in mud and snow. DW has a Subaru Impreza 4WD. We are both keeping out vehicles until they fall apart - which should be quite some time based on the way they are holding up after the first 10 years.

Would I but from a US automaker again? If the price point and features were comparable to what I have now, yes. Otherwise, they can go pound sand.

Back to the original point: Given the dire circumstances GM faces, they need every bit of advertising they can get and with the throughput at WDW, $10M/year is 'chump change' for keeping their products visible.

[cgriff]

WDW Operations....on the other hand....see nothing but labor outlays, utility costs, maintenace and repairs (big one in the case of test track) and other operational expenses....they then add up all those costs and compare it to the park revenue.....something test track has never really added to because it's not a big merchandise pusher....

There is no FW attraction that is a real big merchandise pusher.

And regarding the design time & construction expense of TT, some people say that innovation is rarely cheap, or easy, or quick.

[lockedoutlogic]

I don't know where you're home base is, but there are areas of the country where you'd be more likely to find people driving with no pants on vs. driving a foreign car.

It's very regionalized, but there are still many areas of the country where American cars reign supreme.

In fact, outside of the Northeast and California that's pretty much the case.

Ummmmm.....

I don't know what newspaper you've been reading....

But the people who are in the "american only" segment you just decribed....have been wrong about just about everything for a decade....

The people in the second segment are kinda the ones who still had some grasp on reality....now the BUSINESSMEN in the second segment abused the people in the first segment.....

for that....it's truly regrettable....but it also takes any credibility away...

My point: we probably should look to the "american only" population as the leaders, morale compass, or light of the freeworld anymore

...whether or not that was ever true is up for debate

just an aside (is it veiled enough?)

[lockedoutlogic]

I don't want to start a big debate about this, but you're just totally wrong.

General Motors sells the second most vehicles on the planet, behind Toyota by a sliver. And Toyota just surpassed them like 12 months ago.

Were they caught with their pants down by the high gas prices? Yes. Did anyone see that coming? No. Were people gobbling up their SUV's, leading to big profits for them before that? Yes.

GM's issues go back decades and decades and are mostly tied directly to their union obligations. I'm not saying that's the only reason they're failing, but it's definitely a part of it.

Bear in mind, too, that they used to wholly own GMAC, which was a cash cow for them when the mortgage biz was booming. Now that's gone, as well, so they've gotten a bit of a triple whammy.

But dude ... you can't say "no one is buying that junk anymore", because A. their cars actually have pretty decent quality scores and B. they still sell a heckuva lot of cars.

I understand you have very strong opinions on things, but you really very often confuse those opinions with facts. I think you've done that two or three times in this thread alone.

Not to respond into a big thing....

But GM went from controling the market for close to 60 years.....to second place in the span of a decade....

you take me a little too literally....the no one is buying quip was tongue in cheek....

obviously people are buying.....but the real question is: who and why?

that will put us all on the right path if we really look at it

I agree that the hated, evil, working, simple, non-investing, generous, civic minded, blue collar labor contracts are to blame.....and they are bringing the slick, blackberry wielding, cosmestic surgeon patron, snake oil salesman white collar guys down with them....

see....that was tongue in cheek too....
of course - if you dig into it a little and take all things into consideration from all angles....you might be surprised at what degree of an exaggeration it is (and if you find out....fire and email to my Storm)

But that's also part of the problem....GM's labor contracts, debt structure, acquisitions, investments, holdings...etc were all designed on the assumption of domination.

They weren't built to be number two....so how can they survive with their obligations if they slip to 3 or 4...which they will. They will still have hundreds of thousands of retired workers to support in virtual perpetuity...even if they fire everybody and farm out all the manufacturing to teh poorest people in Sri Lanka....At some point the unions will yield the current and future workers in favor of the deals they already have and stop concessions. And my contention is that is when the execs say "that's it....I'm out"...the plants are closed...the workers are laid off...and the scraps are sold to the highest (or most likely...only) bidders.

That's the issue....and only the United States has either the resource or pull to get them out of it....and my contention is that the politics will shortly overpower the economics of it.

but hey....you can claim higher insight and go that root....
But when the milk spoils in that camp....a little feet on the ground and less than optimistic portfolio predictions is the only medicine to cure the sickness....a natural and necessary grounding to return to balance (if that doesn't happen soon....then things will definitely be altered....perhaps not for the better)

As far as distinguishing facts from opinions.....you are probably right....

But when you understand what goes on under the hood at WDW and have lived it before....it really can make you fairly intuitive.

Test Track has not been a good investment....the upfront cost doomed it to that before it ever opened....Eisney publically scoffed about it on several occasions....this really isn't a bold statement here

It will survive for a time without a sponsor...but definitely not in the long run. It's Disney MO....There is no conceivable way they maintain either Test Track nor mission space for long after the sponsor goes...it's not as lucrative to them from a marketing and sponsorship standpoint than going ahead and assuming the construction cost on new pavilions...and racking up new sponsors and 5 years of "new this year" adds to generate gate

A new sponsor voids the argument....sponsorship maintains the level of water being taken on by the boat....it doesn't change the bottomline for disney....and also doesn't force their hand to replace the E ticket...which they would have to do in almost short order.

It's all moot anyway....once Harry Potter World opens nobody will go to EPCOT anyway...

see that too was tongue in cheek....but only to a certain extent....because everyone jumped on me when I said that Harry Potter and Universal would be forgotten and/or irrelevant by the time it opened....
and low and behold: harry potter has been banished from every walmart, barnes and noble, and burger king in the free world....and will be even more irrelevant in an also ran themepark suffering a huge hit in bad economic times....
I'm just gonna go ahead and confuse opinion with fact on that one....and stand the judgement of history

[Ian]

Wow ... to paraphrase Winston Churchill, never have so few offended so many in so short a time period.

Since my Momma always taught me not to say anything if I couldn't say anything nice, I think I'll just exit gracefully and go wash my obviously passe Chevy Tahoe.

Maybe I'll git me some grits and hog jowls, too, while I'm at it. I think there's a wrastlin' match on later that I don't want to miss.

[DizneyRox]

And Maw said no more skinny dippin' down by the crik!

[Boost]

I sincerely hope that if GM drops sponsorship of Test Track that Ford picks it up and runs with the ball. Sounds like Chrysler is not in any position to do it.

I also hope the Toyota DOES NOT get a footprint in the organization. The fact that we, as a country, do not buy American has in some part contributed to our current economic climate.

I know that some folks on here dearly love their import cars. I have owned Nissan, Toyota, Mitsubishi, Volkswagen, GM and Ford. My wife and I have two Ford SUVs in the driveway now and we love them.

BUY AMERICAN!!!!!