General Motors pulls out of Oscar sponsorship

Movie stars will need to find alternative transport to the Oscars next year after a decision by cash-strapped General Motors to end its 19-year sponsorship of Hollywood’s glitzy annual awards.

In a belt-tightening exercise which could see the iconic Hummer brand sold into Arab hands, America’s largest carmaker is slashing its promotional budget as it struggles to trim losses that topped $18 billion in the first half of the year. GM has traditionally been one of the biggest advertisers at the Academy Awards. It splashed out $13.5 million on television commercials during this year’s ceremony.

The company persuaded stars to ditch their usual limousines in favour of travelling to the show in a fleet of 75 hybrid or fuel cell-powered cars. But faced with a cash squeeze, the company is withdrawing from the Oscars and the Emmy television awards. It recently asked advertising agencies to share in its suffering by reducing their fees for car campaigns.

The company has shed 53,000 jobs over the past two years as it confronts fierce competition from Asian manufacturers that excel in the increasingly important smaller vehicles sector.

An analyst at Merrill Lynch warned last month that GM risks bankruptcy if the US market gets much worse. The company’s shares have fallen by 55 per cent since the beginning of the year and are trading at levels last seen during the 1950s.

But though financial problems have cast a cloud over GM’s celebrations for its 100th birthday in September chief executive Rick Waggoner struck a defiant note declaring: “Anybody who is writing off General Motors isn’t looking at the facts and is probably hoping.

“They’d better watch out.”

To bolster its balance sheet, GM has put its Hummer brand up for sale.