DaimlerChrysler plans to preserve Chrysler brand divisions

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DaimlerChrysler intends to keep Chrysler Group's existing brand divisions in place, and it's counting on its winning agency to employ separate teams for each division when Chrysler Group consolidates its $1.8 billion global creative and media account at a single shop.

"Nothing's going to change on our side of the fence. We don't plan to change our internal organization," said Arthur "Bud" Liebler, senior VP-Chrysler Group marketing. "We're not going to do anything to break down the separations of the brands and the divisions."

SLASHING FEES

In September, the car marketer asked Omnicom Group's BBDO Worldwide and True North Communications' FCB Worldwide to develop proposals to slash agency fees while providing the same level of creative, media buying and media planning services for the Dodge, Chrysler, Jeep and Plymouth brands. An executive at one of the agencies suggested the marketer wants to cut annual fees by $86 million. One institutional investor with stakes in both agency companies said he'd been told DaimlerChrysler is looking to cut agency costs by 25%.

The two contenders returned Oct. 25 to the client's headquarters in Auburn Hills, Mich. The automaker met separately with each side to get more details and clarifications about their early October presentations for the more than $1.8 billion consolidated global creative and media account.

Though the client originally said a decision would come by the end of the year, the winner could be named in November, Mr. Liebler said. Among other details, DaimlerChrysler is examining each agency's proposal to gain operational efficiencies.

Mr. Liebler said both agencies have kept all their people in place and performed their duties. "I'm sure there's a lot of nervousness and tension, but they're not showing it."

An executive at one of the agencies, who asked not to be named, said each will face a "cultural upheaval" whether they win or lose the account.

PLYMOUTH TO DISAPPEAR

FCB's Southfield, Mich., office handles the estimated $800 million national and regional-dealer Chrysler, Plymouth and Jeep accounts. Plymouth will stop selling cars at the end of the 2001 model year and the brand will disappear.

BBDO's Troy, Mich., office handles the estimated $750 million national and regional dealer Dodge accounts. Its PentaCom subsidiary, also in Troy, buys $1.7 billion in media for all Chrysler Group brands and Mercedes-Benz in the U.S. and plans media for all but Mercedes.

The $1.8 billion global figure includes Chrysler Group billings outside the U.S.

When they learned of plans to consolidate all the former Chrysler Corp. brands at one agency, many dealers were upset. The automaker told dealers about the shoot-out the same day it told the agencies -- Sept. 6. A Dodge dealer, who asked not to be named, said he's worried the brand could lose its identity if BBDO loses. A Chrysler-Plymouth dealer said he's worried about losing brand identity should FCB lose.

"We're not going to decimate any progress we made with our brands," insisted Mr. Liebler. DaimlerChrysler, he said, wants to keep the brands distinct and has told the agencies it doesn't want "a single creative guru" to oversee all brands.

Dealers asked to be included in the review process. DaimlerChrysler gave its dealer council an overview of the agencies' plans in Las Vegas the week of Oct. 16. Then last week, it met separately in Auburn Hills for a deeper dive into the proposals with the dealer executive committees of the Dodge and Chrysler-Plymouth-Jeep divisions.

Massachusetts dealer Tom Barenboim, national chairman of the Chrysler-Plymouth-Jeep council, said he "was very sensitive at first to the idea of having just one horse" for the two divisions' advertising. He changed his tune after last week's meeting. "It's all about taking costs out. It's the reality of today."

Mr. Barenboim stated he saw no indication DaimlerChrysler executives were leaning in favor of either agency. "It's not a foregone conclusion," he said. "The decision has not been made."

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