News Column

Firing May Put GM Ad Budget Into Play

July 31, 2012

James R. Healey, Laura Petrecca and Chris Woodyard, USA TODAY

general motors

General Motors' big news this week was supposed to be Thursday's earnings announcement: Did sagging Europe pull the whole company into the red for the second quarter?

Instead, the buzz is about the latest high-level head-chopping, and this one has rocked the advertising and marketing world because it could put big portions of GM's $4.5 billion global ad budget into play.

GM's shocking move was to boot, in harsh language, global chief marketing officer Joel Ewanick. He signed off on the "Chevy runs deep" ads and consolidated GM's brand advertising with three main agencies instead of dozens.

Ewanick was hired as a superstar two years ago after overhauling Hyundai's image and starting some projects for Nissan before GM lured him away. He was replaced -- temporarily, GM said -- by Alan Batey, the car company's vice president in charge of U.S. Sales and Service.

A new CMO will "want to come in and make a mark, tinker with things," says veteran marketing consultant Jack Trout at Trout & Partners. "It's not that hard to fire an agency that was hired by someone else," says Scott Galloway, marketing professor at New York University's Stern School of Business.

GM's initial announcement said Ewanick "elected to resign effective immediately." But GM spokesman Greg Martin added that Ewanick "failed to meet expectations the company has of its employees."

The move follows the dismissal last Thursday of design executive Dave Lyon, who was escorted from GM headquarters for an unspecified violation of GM policy. Lyon was to have taken over Wednesday as director of design at GM's troubled Opel unit in Germany. GM has no replacement.

Those moves, in turn, come two weeks after GM's sudden replacement of Opel's top executive, Karl Stracke, also with a temporary stand-in.

Ewanick did not respond to a request for comment.

How he could merit such a biting goodbye was the subject of wide speculation Monday, although controversial decisions -- such as pulling ads from Facebook and deciding not to advertise in the 2013 Super Bowl -- are unlikely to have been sufficient cause.

Ewanick did craft an unusual deal with U.K. soccer team Manchester United. And Batey on Monday quickly announced a new deal with the team, which suggests that Ewanick's arrangement was overturned.

Source: Copyright USA TODAY 2012

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