GM, Tiger Woods end nine-year deal

General Motors Corp agreed to discontinue a marketing accord with Tiger Woods, the world’s top-ranked golfer, at year’s end as plummeting sales spur cost cuts at the automaker.

Woods endorsed GM products including Buick for the past nine years. He had been under contract through 2009, Pete Ternes, a spokesman for the Detroit-based automaker, said today.

The need for “budget efficiencies during a difficult economy” contributed to the decision, according to a statement from GM, which is seeking to cut US marketing expenses by 20 per cent. Sales of Buick vehicles dropped 24 per cent through the first 10 months of this year, outpacing the 20 per cent decline for all of GM’s cars and light trucks.

“This is something you kind of expected that they had to do,” Bob Dorfman, executive creative director at Baker Street Partners advertising agency in San Francisco, said in an interview.

Sales of Buick vehicles in the US plunged 58 per cent to 185,791 units from 1999 to 2007, more than any other GM brand in the period. Sales of the 105-year-old Buick brand peaked in 1984 at 941,611, according to trade publication Automotive News.

Woods made $122.7 million in on-course earnings and endorsements last year, according to Golf Digest magazine. GM posted almost $73 billion losses since 2004.

“We began speaking with Woods earlier this year,” Ternes said in an interview. “He expressed an interest in growing his own Tiger brand and we have been looking for marketing savings.”

Woods’ agent, Mark Steinberg, wouldn’t comment on the golfer’s future endorsements. “We’ve put together a plan, but it’s nothing that I’m going to discuss at this time,” Steinberg said in a telephone interview. Ternes and Steinberg declined to disclose financial details of Woods’s contract with GM.

GM’s partnership with Woods hasn’t helped boost Buick’s appeal to younger buyers, according to a study by Strategic Vision Inc, an industry consultant.

The median age of new Buick retail buyers in 2008 was 68 in the US, the same as in 1997, said Alexander Edwards, head of the auto research division at the San Diego-based firm. Only about 1 per cent of the Buicks sold at retail in 1997 went to consumers 34 or younger, and that share fell to less than half a per cent for those sold in 2008, Edwards said.

“Overall, the message never fully connected,” Edwards said in a telephone interview. “Even if they did a good job, the consumer never really felt convinced. I don’t think it was a bad move, it was just difficult to overcome the hurdles.”

The golfer wasn’t available for comment, said Steinberg.

GM is cutting jobs and production and selling assets, part of a plan to improve liquidity by $20 billion by the end of 2009. The automaker, which hasn’t recorded an annual profit since 2004, has asked Congress to approve $25 billion in loans for the US auto industry.

GM gained 53 cents, or 17 per cent, to $3.59 at 4:01 pm in New York Stock Exchange composite trading. That was GM’s biggest percentage increase since October 13.