For years, the automobile industry has been a huge player in sponsoring events on the PGA Tour. In 2008, Mercedes, Chrysler, Buick (two tournaments), Honda and BMW all were title sponsors of events. And that’s not to mention the dealerships who act as corporate supporters for other tournaments, providing courtesy cars for the players, their families and Tour officials, sponsoring hospitality tents and so on.
That’s sure to change in the very near future, as GM threatens bankruptcy and Chrysler’s future is unsure (Ford pulled out of golf in favor of bull riding a couple of years ago). Mercedes and BMW also could be in trouble in the near future; a recent report says that European car sales are down 15%.
Still, GM seems to be putting a brave face on things:
GM is the title sponsor of two PGA Tour events, the Buick Open and Buick Invitational. Both tournaments are on the schedule for 2009 and their contracts run through 2010.
“We’re certainly trying to spend our money more efficiently there. In particular the Buick Invitational that’s upcoming in February, really we’ve trimmed back all the back-of-the-house kind of stuff… no dealer contests, no hospitality, all that is cut back,” said Larry Peck, Buick and Pontiac promotions manager for GM.
“You’ll still see products on television and advertising that will promote the products through the broadcast, but any of the entertainment, hospitality type of activities have been canceled.”
Peck said that despite the current hardships, the automaker was still committed to promoting itself through golf.
A collapse of the US automobile industry would affect a whole lot more than golf tournaments. Dealerships have for decades been a bedrock, supporting their communities with charitable giving. Some of my students noted a change in things this fall, when local dealerships—who in the past could always be counted on to purchase sponsoring ads in school newspapers, yearbooks and sports programs—cut back on their aid.
I don’t think people realize just how deep the domestic auto industry extends into their lives.
And then there’s the bigger employment question. Some studies I’ve seen say that one in ten US jobs are connected to the domestic auto makers. There not only are the direct employees of auto manufacturers, but also the entire supply chain, dealerships, trucking firms, and associated businesses. Add to that the even less obvious: medical providers that generated income from UAW members with generous health benefits, advertising agencies, banks who generate income from auto loans, university research grants, and so on.
I’m no fan of government bailouts (I’m totally opposed to rescuing all those Wall Street firms), but it seems to me that the domestic auto industry can’t be allowed to go under—if only on the basis of national security. While many, of not most of the functions of the US automakers would be picked up foreign automakers, I don’t want to be totally dependent on them.
And I don’t see Chapter 11 as a legitimate option. GM, Chrysler and Ford have enough trouble selling cars as it is. Who would buy a car from a company that’s in bankruptcy? More than any other product, when you buy a car, you buy a long-term relationship. You need to know that the manufacturer will be around to provide maintenance, service and parts for many years to come. I know how worried and betrayed I felt when GM killed Oldsmobile soon after we bought our second vehicle from them.
I’m old enough to remember when we bailed out Chrysler back in 1979. Questions of financial tapdancing on Chrysler’s part aside, they did manage to pay back the loans. And Chrysler continued to provide jobs and generate tax revenues for the next twenty five years.
What worries me about a potential bailout, though, are the strings that are sure to come with it. I have absolutely no faith that Congress—or the current or future presidents—have a better grasp of what needs to be done than the auto executives. The government will only wreck it beyond repair.
And when the automakers finally are no more, instead of the Buick Invitational, and the Chrysler Classic, we’ll have the Treasury Department Open and the Government Accounting Office Pro-Am.
Update:
The Parfect Golfer has similar thoughts.
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I agree with what you’re saying, and I’m very worried about what the auto companies might have to give up to get the bail out. I’m afraid the Sierra Club is going to end up dictating the design of all future cars. We’ll end up with cars that don’t go over 35 mph.
Thanks,
Bill
Bruce, that’s something I have often wondered. If Chrysler went out of business, their sales probably would have gone to GM and Ford, making them stronger, while the best engineering, sales and other minds would have been hired by the remaining two. That could possibly have maken them stronger.
Letting Chrysler go may well have been the right move. After all, they let AMC go under.
I’m not so sure letting GM, Ford and Chrysler is the right move now, because much of their problem lies in a credit crunch brought about not by their own mistakes, but by a global problem. Without the current crisis, I think they would have been able to fix their issues over the next couple of years.
I heard on the Golf Channel that Buick won’t give the players as many courtesy cars as they had in the past. I would be happy to volunteer my Buick as a courtesy car at the Bridgestone Invitational, but the players would have to take me along wherever they were going
As for the bailout, I think that’s the government’s solution to everything. When I came home this evening I noticed a commercial on tv about the housing bailout. Then the banks got bailed out. Now they are talking about the auto industry getting bailed out. What’s next? During the campaign, I heard that Obama’s big plan was putting people to work improving the infrastructure – roads and bridges. So, the government could quite possibly buy your house for you, your car for you and give you a job.