DETROIT - General Motors Vice Chairman Robert Lutz is hacking marketing costs, and the next victim could be Bugs Bunny.
A GM source said a contract between GM and Warner Bros. requires the automaker to pay "around $400" to the movie giant for every Warner Bros. special-edition Chevrolet Venture minivan it sells.
Peter Langenhorst, Venture marketing director, acknowledges such costs don't sit well with Lutz.
The automaker is negotiating a contract that may not include continuing the Warner Bros. minivan, Langenhorst confirmed. The five-year contract was set to expire March 2003 but has been extended to June 2003.
"I'm understanding that Mr. Lutz has commented that the Warner Bros. relationship was a potential (cut) to save costs down the road," he said. "The directive has not come down to the brand team (yet)."
The Warner Bros. Venture was introduced in 1998 to attract young families. It features a rear-seat DVD player, 15-inch aluminum wheels and cloth and leather seating. A picture of Bugs Bunny and the Warner Bros. logo appear on the vehicle.
Last year, Chevrolet sold 13,399 Warner Bros. Ventures out of 88,788 total Ventures sold. In 2000, Chevrolet sold 11,475 Warner Bros. vans out of 97,450 Ventures. Using the $400-per-vehicle figure, GM paid Warner $5.36 million in 2001 and $4.59 million in 2000.
Langenhorst said the automaker and Warner are discussing possibilities, including continuing the co-branded vehicle, reducing GM's licensing costs or letting the contract lapse until Chevrolet introduces new minivan features.
Langenhorst said he would prefer a contract that focuses on features of the next updated model.
"A couple years down the road from now, we are going to have some new features and some new things going on," he said. "We have to figure out when is the best time to get back in to potentially use the Warner Bros. hook to launch those things."
The Venture is scheduled to be redesigned in the 2005 or 2006 model year, when the minivan is switched to GM's Lambda platform.
Langenhorst said he is not in a conflict with GM's top brass about the Warner Bros. deal. "Everything is fair game" in cutting costs from a vehicle, including marketing, he said, but GM needs to strike a balance between cost and marketing value.
Langenhorst said he will be talking to GM management about the value of the Warner Bros. relationship to the Venture nameplate including name recognition and sales success.
Said Langenhorst: "We - General Motors - have to get serious about cost cutting and making our vehicles of true value, yet getting the best marketing plans for those value-oriented vehicles."