Despite financial woes, automakers play big role in Super Bowl
Wednesday, January 25th 2006, 8:48 pm
By: News On 6
DETROIT (AP) _ When the Motor City won the right to host the 2006 Super Bowl six years ago, Detroit's automakers were enjoying record profits and booming sales of sport utility vehicles. Now, the Big Three face the challenge of squaring their costly sponsorship roles with the downbeat news of losses and employee layoffs.
GM's Detroit headquarters is already wrapped in a 21-story vinyl Super Bowl logo, and automakers say they're determined to put on a good show despite the shadow cast over Ford Field by this week's sobering developments.
``This is not an industry in which you curl up in a ball and shy away from the realities,'' said Kevin Smith, a spokesman for General Motor Corp.'s Cadillac division. ``It's a time to scream to the clouds that we're here and we've got great values and great prices. What better time to do that than the Super Bowl?''
Michael Bernacchi, a marketing professor at the University of Detroit, estimates GM alone will spend up to $25 million for ads before and during the game and the sponsorship of the post-game show. Bernacchi said he expects the Big Three's ads will be toned down this year because of the financial crisis.
``In difficult economic times, it's certainly proper for stockholders _ or for anybody _ to ask the question, `How much opulence?''' Bernacchi said. ``It's a fair criticism.''
Ford Motor Co. announced on Monday that it plans to cut 30,000 jobs and close 14 facilities _ including a plant near Detroit _ after losing $1.6 billion in its North American operations in 2005. GM, which lost $4.8 billion in North America in the first nine months of last year, is in the midst of a similar restructuring and plans to cut 30,000 jobs by 2008.
Chrysler Group has fared better, enjoying increased profits and healthy U.S. sales last year. But the division's parent company, DaimlerChrysler AG, announced plans this week to cut 6,000 administrative jobs over the next three years, mostly in Germany.
Representatives for the automakers and the National Football League wouldn't disclose what Super Bowl sponsorships, parties and other events will cost. Susan Sherer, director of the Detroit Super Bowl host committee, said her entire budget is $18.5 million, which includes donations from each of the Big Three.
Both GM's Smith and Marcey Evans, a spokeswoman for Ford, said their companies haven't pared back any of their Super Bowl activities in light of their losses.
``We just think that it's extremely important to continue to show our support for the city of Detroit and help the city show the best it has to offer to the world,'' Evans said.
Smith added that automakers wouldn't spend so much if it didn't have benefits. ``This is our home city. You get to do this once,'' he said. ``We don't see our current financial situation as a reason to not utilize this world stage that we paid to play on.''
The Super Bowl will be a rare chance to see the fierce competitors working together. GM, Ford and Chrysler are co-sponsoring the Motown Winter Blast, an outdoor festival where fans can go down a snow slide, take rides in Model Ts, ice skate and enjoy live music. The festival runs from Feb. 2-5.
Cadillac is the official vehicle of the Super Bowl for the fifth consecutive year, guaranteeing it the lion's share of attention. Cadillac is providing 424 vehicles with Super Bowl logos on them for NFL staff and team executives. It will use another 250 vehicles for displays and shuttles.
The 2007 Cadillac Escalade sport utility vehicle will be on the field when the MVP trophy is presented, and the MVP will be offered the Cadillac of his choice.
Smith wouldn't say what GM spent for the sponsorship rights. But earlier this year, the world's largest automaker signed an estimated $50 million deal with Major League Baseball to be its national sponsor through 2007
Because of Cadillac's sponsorship rights, Ford and Chrysler are somewhat limited in their ability to promote their brands. For example, only Cadillac will be displaying vehicles at the Super Bowl media center and the NFL Experience, a fan festival. Sherer said GM waived its exclusivity rights so Ford and Chrysler could co-host the Winter Blast.
But Ford has an inherent advantage: The game will be played at Ford Field, which has two giant Ford logos painted on its roof. Ford paid $40 million for the naming rights to the stadium, which opened in 2002.
Chrysler is sponsoring the Taste of Detroit, where 40 restaurants will have booths selling food, at the Winter Blast. The company also is developing a pocket guide to Detroit hot spots, spokesman David Elshoff said.
Automakers will be throwing glitzy parties, too. Cadillac is co-hosting a four-day party for VIPs at the upscale Centaur Bar in Detroit, where it will turn one whole floor into an exclusive Club Cadillac. Earvin ``Magic'' Johnson will co-host a charitable event with Ford's Lincoln brand, while actor Jeff Daniels will entertain at a Chrysler-sponsored party for top United Way donors.
Automakers also will take center stage at ``A Detroit Salute,'' the Super Bowl opening ceremony on Jan. 30. GM Chairman and CEO Rick Wagoner, Bill Ford and Chrysler President and CEO Tom LaSorda are all set to attend. Tickets range from $125 to $1,500 and proceeds go to charity.