GM cuts, postpones ads as labor woes intensify

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General Motors Corp. confirmed last week that it has started to significantly cut its multimedia ad spending through July. It's making the move as part of cost-containment measures relating to the labor strikes that have virtually halted vehicle production.

GM will evaluate the media situation as the strike continues, a spokeswoman said. She declined to reveal the dollar amount of cuts.

She said each medium is being handled individually, so in some cases a buy could be postponed until later in the year. Other contracts may not have penalty clauses.

The new round of cuts is a double whammy to publishers, because these cuts come on the heels of deep cuts in print spending earlier this year by GM.

Weekly books, because of their shorter lead time, are taking the first hits, say three magazine ad reps. But as of late last week, no ads were pulled from certain monthly magazines.

GM NO. 1 SPENDER IN '97

GM was the biggest spender in measured media last year with $2.2 billion, according to Competitive Media Reporting.

It isn't clear how much TV advertising GM is cutting. The automaker has strike clauses in its network contracts, but local-station executives said, as far as they know, their contracts have no strike clauses. But they are cooperating with GM since it's such a big advertiser. GM reportedly is yanking spot TV on a brand-by-brand and market-by-market basis, mostly commercials for vehicles that are out of stock or in low supply.

PICKUP TRUCK ADS STILL ON

Oldsmobile told Automotive News two weeks ago its crucial all-new Alero sedan and coupe launch in July would be delayed because of the United Auto Workers strikes. Alero ads from Leo Burnett USA, Chicago, were due to break in August, perhaps in weeklies.

As of late last week, Alero ads were still slated in certain September monthlies.

Ads for the even-more crucial full-size pickups, the 1999 Chevrolet Silverado and GMC Sierra, were still scheduled to run in October books. The pickups also are expected to be delayed.

Contributing: Chuck Ross

Copyright June 1998, Crain Communications Inc.

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