When is saving a cost not a savings? When the cost is saved for the sake of appearances.
Public opinion bullied bailed-out AIG into canceling meetings with legitimate business purposes — bottom-line ones — and having to fend off knee-jerk attacks against other events it went ahead with, including an educational meeting this month for independent reps who sold $200 million of AIG annuities in the past year.
Now come the Big 3 car companies to Washington, looking for their own bailout and starting to learn how to play the game.
Their CEOs were embarrassed when Congress rapped their knuckles for flying in on their corporate jets. While those were paid for before the car companies' business tanked, and no one said anything about them then, it does cost maybe 30 times more to operate the private planes than to fly commercial, so the criticism was reasonable.
Harder to understand was yesterday's news that General Motors and Tiger Woods had ended their endorsement deal with one year remaining on the 10-year contract. GM, which had been paying Tiger $7 million a year to pitch cars, especially the Buick Enclave, attributed the decision in part to its "search for budget efficiencies during a difficult economy."
GM and Tiger also claimed that the decision was mutual, with the uber-golfer desiring more personal time. Let's hope that is the real reason (Tiger being that rare sort for whom $7 million is couch change), because as budget efficiencies go, this one looks suspect.
In fact, a GM official in essence admitted as much to the Associated Press. GM had been trying to give the Buick brand a more youthful image, AP's article noted. Buick golf marketing manager Larry Peck told the wire service that during the launch of the Enclave a few years ago, 78 percent of consumers who bought the SUV had not been Buick owners previously. "We attribute awareness of that brand to Tiger," he was quoted as saying. Contrarily, Peck also said ending the pact "sure frees up a lot of money for us."
If Tiger Woods — arguably the world's most famous person, possessor of a spotless image, super looking with an all-world smile, and a purveyor of convincing TV-commercial performances that may rival his golfing ones — does not generate more cash for endorsees than he costs them, then it's safe to say that every penny companies spend on celebrity endorsements and sponsorships is completely wasteful.
Woods does not, though, make more money for GM than the many billions of bailout dollars the company is still hoping to wrest from the government. And what the government wants as a condition of forking over the cash is plans showing how the auto giants will reinvent themselves, including a determination to shed unnecessary costs.
In the current toxic environment in which the car (and financial) firms operate, even a good investment like a Tiger Woods endorsement can be judged unnecessary by elected officials whose constituents are screaming for blood. How useless it probably is to point out that if Congress wants a new plan for the car companies' survival, it should include keeping strategies that actually work.
Of course, it's entirely possible that Woods simply wants more free time, and GM is simply seizing an opportunity to trumpet its frugality. And why not? That is how the game is being played. |
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