GM blasts Publicis for poaching

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General Motors Corp. is angry with Publicis Groupe for hiring away one of its executives to work on a rival's business-and could punish the holding company as a result.

"We've voiced our extreme displeasure to Publicis," said C.J. Fraleigh, executive director of corporate advertising for GM. "I found what happened unacceptable [and] inappropriate."

His reference was to Saatchi & Saatchi, a Publicis agency, which hired GM's Kurt Ritter as CEO of its Torrance, Calif., office, which services the account of Toyota Motor Sales USA.

Asked whether GM, a Publicis client, might spank the holding company by taking away business, Mr. Fraleigh said only, "Publicis and their employees have to do what's best for them and we have to do what's best for us."

He also expressed unhappiness with Publicis' acquisition last year of Bcom3 Group, GM's first public acknowledgement that it was irked by that deal.

One observer speculated that all or part of the $350 million-plus in spending parked at Publicis could be in jeopardy as a result of Mr. Ritter's hiring. "Bigger accounts have moved over less," said the observer, a veteran of the automotive industry.

Neither Publicis nor Saatchi gave GM a heads-up on the plans to hire Mr. Ritter, according to two executives close to GM. That task would likely have fallen to Roger Haupt, chief operating officer at Publicis, who did not return calls and e-mails for comment left at various offices and his home over a seven-day period.

Mr. Ritter on March 1 was named general marketing manager of GM's Buick-Pontiac-GMC division. He had spent nearly all 32 of his years at GM at Chevrolet, its biggest vehicle division and a direct competitor to Toyota. He could not be reached for comment.

This isn't the first time Publicis has rankled GM. When the French holding company acquired Bcom3, GM went from Bcom3's largest U.S. car client to one of several in Publicis' garage (AA, March 25, 2002).

Toyota is Publicis' biggest auto client globally. Publicis' Renault business is said to be less of a concern to GM although it owns part of rival Fiat.

"From day one [of Publicis' Bcom3 buy] we weren't happy," said Mr. Fraleigh.

long history

Publicis' Chemistri and predecessor agencies have handled GM's Cadillac since at least 1915, although Interpublic Group of Cos.' Campbell-Ewald (which handles GM's Chevrolet account) held it for two periods in the 1920s and '30s. Chemistri also has Pontiac, an account held by it and predecessor shops since at least the '60s. Prior to its acquisition by Publicis Groupe, Bcom3 formed General Motors Planworks, Detroit, in late 2000, after winning the automaker's consolidated media planning and research account.

Last year, Cadillac spent $221 million in measured media and Pontiac $145 million, according to TNS Media Intelligence/CMR. Planworks is on an undisclosed fee-based compensation plan. GM spent a total of $2.38 billion in measured media last year.

Interpublic, which counts GM as a major client, has been patiently monitoring the Publicis situation. In spring 2002, Foote, Cone & Belding Worldwide bowed out of the race for Hyundai Motor America in what was seen as a show of loyalty to GM. At the time, Interpublic was said to have been positioning itself to pick up more of the automaker's business, predicting fallout in the wake of the Publicis/Bcom3 merger.

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