General Motors (GM) has decided that it will not serve as a sponsor for the the 2009 Academy Awards, ending a long relationship that included $13.5 million in ad spending for this February’s broadcast and, in some years, the company paid extra to be the exclusive auto sponsor for the event. GM has also provided cars to escort celebrities from the ceremony to the after-parties.

A GM spokesman told The Wall Street Journal that "It is a great property, but it simply didn’t fit into our plans for 2009

Translation: "We’re broke." When it comes to mangled corporate strategy and strategic failures, you almost have to stand in awe of General Motors. GM paid out huge dividends even as critics complained that the company’s balance sheet and pension/health care obligations posed great risks, and then bet the company on the SUV boom which worked great until it didn’t.

Now GM has to win back consumers and gain market share, if it has any chance of surviving — which I doubt that it does. Here’s the problem: GM will not be able to achieve market share gains by slashing its advertising budget; and the company’s fixed costs are so high that it doesn’t have the luxury of aiming for profitability on lower sales. No, any recovery at GM will have to come from increased sales and the company obviously doesn’t have the cash to make the investments for that to have any chance of happening.

GM has attracted a number of smart contrarians in the past — David Dreman and Kirk Kerkorian, among many others — but both of those legends have thrown in the towel, and this is one stock where, as much as the market has punished the stock, it’s probably not even close to being beaten down enough. Does anyone honestly think that it’s anything other than a matter of time before GM declares bankruptcy? Sure, there will be ups and down and more than a few dead cat bounces, but hoping for those isn’t investing: it’s speculating.

Zac Bissonnette

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