A group of GM dealers is threatening legal action against the automaker in a bid to prevent it from eliminating regional dealer ad groups.
General Motors Corp. plans the changes--affecting $511 million in ad spending--as part of its latest reorganization to consolidate its vehicle marketing divisions and create five new regional units.
Illinois attorney Dennis O'Keefe sent a letter Nov. 19 via Federal Express to GM and dealer groups around the country on behalf of Chicago area Chevrolet, Pontiac, GMC, Oldsmobile and Cadillac dealer groups, as well as other, unnamed dealer groups around the U.S.
The letter, a copy of which was obtained by Advertising Age, said the dealers learned of GM's plan to eliminate their ad groups "without any input from, or discussion with, its dealers.
"Each of my client associations has passed a unanimous resolution to provide substantial funding to undertake an effort to stop the unwarranted change in the way GM and its dealers have done business for so long," the letter continued.
"GM doesn't ask for input anymore," said one dealer who asked not to be named. "They just do what they want."
Auto analysts have said GM needs to improve its relationship with its dealers; GM dealers, with the exception of those for Saturn, rank near the bottom of J.D. Power & Associates' annual studies of dealers' satisfaction with the car manufacturers they represent.
TVB WARNS OF GM ACTION
In a related development, Television Bureau of Advertising, a trade group representing about 470 TV stations, last week sent its members an alert about GM's plans to switch to a regional approach to retail marketing.
The alert notes "it is essential that television stations reach local General Motors dealers as soon as possible. Let them know what might be at stake from a replacement of local decisionmaking to regional offices based hundreds of miles away."
GM is expected to announce the changes Dec. 15; executives close to GM confirmed the marketer will hand regional advertising responsibilities to its national agencies and media buying to a partnership between Interpublic Group of Cos.' McCann-Erickson Worldwide and Campbell-Ewald.
McCann would supervise and manage regional buys, executive close to GM said. The shop's LCI unit already buys GM-funded spot TV, on which GM spent $370 million last year, according to Competitive Media Reporting.
GM's national car shops are: Campbell-Ewald, Warren, Mich. (Chevrolet); D'Arcy Masius Benton & Bowles, Troy, Mich. (Pontiac and Cadillac); McCann (Buick); and Leo Burnett USA, Chicago (Oldsmobile). Saturn isn't affected by the reorganization; its national agency, Publicis & Hal Riney, San Francisco, already handles regional retail ads.
The Nov. 19 letter was addressed to John Middlebrook, general manager of Chevrolet, who becomes general manager of all vehicle brand marketing on Jan. 1. He was out of the office at press time and couldn't be reached for comment.
"Our whole lives and our children's lives are at stake here," said a GM dealer who asked not to be named. "I don't want to put my faith in the hands of these [new regional] people. Some have never sold a car before."
Copyright November 1998, Crain Communications Inc.