The Test Track at Epcot has been sponsored by General Motors under a 10-year agreement signed in 1999. GM may not renew.
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.
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.
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."