What Does CEO Shift Mean for GM Agencies?

Analyst: No 'Sudden' Moves Expected from Barra

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Mary Barra
Mary Barra Credit: Bloomberg

With the naming of Mary Barra as the CEO of General Motors, the first question for adland -- as is often the case with executive changes -- was, "What does this mean for agencies?"

As of Jan. 15, 2014, the 51-year old Ms. Barra will succeed current CEO Dan Akerson, 65, who'll retire early to care for his cancer-stricken wife.

But will that bring changes on the Detroit automaker's $3 billion U.S. ad budget?

Michelle Krebs, an auto analyst with Edmunds.com, doesn't expect Ms. Barra, an engineer by training, to make "sudden" moves.

"She won't come in and do something sweeping; that's not her style. She's very low-key, studies situations – and then quietly makes moves. She's an engineer so she studies things very closely."

That's not to say she isn't a change-agent. According to Automotive News, the new CEO is both a product of the company's bureaucratic, hidebound culture, and a crusader against it. "Barra overhauled the organizational structure that GM has used on its vehicle-development programs since 1996. ... She also has accelerated the development process by cutting off costly, late-in-the-game tweaks to vehicles under development. And she has continued a consolidation of GM's global vehicle platforms," according to Automotive News.

Alan Batey
Alan Batey

And some changes are likely on the marketing front. For one, Alan Batey, senior VP for Global Chevrolet and U.S. sales and marketing, has taken one a new role as part of today's executive shifts. Mr. Batey, 50, was promoted to exec VP and President North America.

For the time being, said GM spokesman Pat Morrissey, Mr. Batey "will assume both roles."

But chances are slim that Mr. Batey will continue to wear both hats. Look for Ms. Barra to allow him to focus on his new role by either promoting a current executive or hiring an outsider.

Mr. Batey made several key marketing moves after succeeding Joel Ewanick as interim CMO in July, 2012.

On Chevrolet's $970 million U.S. account, he junked the "Chevy Runs Deep" tag developed by Goodby, Silverstein & Partners in favor of the current "Find New Roads" positioning from McCann's Commonwealth, Detroit. But in a blow to McCann and Commonwealth, he took the $290 million Chevy Silverado business away from Commonwealth and parked it at GMC Truck agency Leo Burnett, Chicago. McCann has been trying to get the business back ever since.

Under Mr. Batey's watch, Interpublic Group's new agency consortium, Rogue, beat incumbent Fallon , Minneapolis for the $250 million Cadillac after a review.

GM hired hotshot ex-Volkswagen CMO Tim Mahoney as the new global CMO of the Chevrolet brand in February. Mr. Mahoney immediately unwound another of Mr. Ewanick's brainstorms, by announcing Chevys' return to Super Bowl advertising after a year on the bench.

Another GM executive who will have a greater hand in marketing is Dan Ammann, the current chief financial officer, who was promoted to president. In his new role, the 41-year old Ammann will oversee the global Chevy and Cadillac brand organizations while managing regional operations around the world. GM will hire a new CFO to replace him.

GM's big executive changes come only one day after the U.S. Treasury Department announced it had sold its final shares in the company -- ending its "Government Motors" era. The government said it ended up recovering $39 billion of the $49.5 billion it spent to bail out GM at the low point of the economic recession in 2008.

GM's overall sales rose 14% in November and 9% over the first 11 months of 2013, according to the Automotive News Data Center.

With its $3 billion ad budget for brands such as Chevy, Caddy, Buick and GMC, the automaker ranked as the 2nd-largest corporate spender in 2012, behind Procter & Gamble's $4.8 billion but ahead of Comcast's $2.9 billion, according to the Advertising Age DataCenter.

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