GM President-CEO Jack Smith moves onto the P&G board as his boss, Chairman John Smale-who once held the same title at P&G-prepares to retire from the board this July.
Mr. Smith's appointment is regarded by observers as a vote of confidence from Mr. Smale and assures a continuing relationship between both companies at a critical juncture in GM's turnaround.
"As GM continues to work out its strategic plan, you can see John's thumbprint all over it," said Jeffrey Hill, managing director, Meridian Consulting, Westport, Conn. "There is no question he has applied the lessons learned at P&G to GM."
Indeed, just as P&G restructured itself earlier this decade as it moved to everyday low pricing and away from trade promotion, GM is weaning itself from costly sales incentives as it simultaneously grapples with improving productivity and manufacturing.
Not to mention tackling the prodigious task of becoming a brand builder. Several GM agencies-including P&G shops N.W. Ayer & Partners, D'Arcy Masius Benton & Bowles and Leo Burnett USA-say GM has asked them for reels of "great brand building advertising." The request came in a form letter from Phil Guarascio, VP-general manager-marketing and advertising for GM's North American Operations, also asking for written statements on why the ads worked.
The submissions will be repackaged by GM as a 2-hour presentation for senior management.
"John Smale asked for this so I'm on the line big time," Mr. Guarascio is said to quip at the end of the letter.
While some agency executives believe Mr. Guarascio may also be reaching for help outside of the GM agency pool in the direction of talent agencies Creative Artists Agency, Beverly Hills, Calif., and International Creative Management, Los Angeles, they don't expect an agency review any time soon.
One consultant who knows Mr. Smale believes the request for submissions may also indicate he is considering "a system like P&G's where there is rapid deployment worldwide of successful commercials."
With Mr. Smith on the P&G board "there will be a continuity that will have significant implications for both companies," Mr. Hill said.
Agreed Ted Jadick, managing partner of search company Heidrick & Struggle's Board of Directors Practice, New York, "I've got to believe they can both learn from each other's book. Smith is bringing an organizational skill set that GM has done a lot with: its being a low cost producer and the architect of one of most classic turnarounds in the country."
Said a consultant who once worked at P&G, "GM's strengths are things like financial controls, and for P&G understanding risk in finance is something they need."
And not entirely far-fetched, some say, might be an assist from GM to P&G in the world of credit or frequent buyer cards.
"Anything is possible," said PaineWebber analyst Andrew Shore. "Co-branding or co-marketing. I wouldn't even discount the possibility of a co-branded credit card."