OLDS DEALERS IRKED BY FIRING OF THREE SELECT AGENCIES: TENSIONS COME AMID REPOSITIONING AIMED AT UPDATING BRAND IMAGE

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In the midst of Oldsmobile's centennial celebration in late August, trouble was brewing between the General Motors Corp. division and its dealer body.

Olds dealers are fuming over what they called the division's unannounced firing of three of the seven select agencies handling $70 million in regional dealer accounts.

The friction comes at a crucial time, as the Olds brand tries to reposition from its stodgy, old-person's-car image via new products and new branding.

OVERSTEPPING AUTHORITY?

Dealers contend the carmaker overstepped its authority because the dealer ad associations-not the division-hold the contracts with the agencies. The retailers said Olds is replacing the shops with other select agencies without reviews.

Dealers said the three ousted shops are Partners & Shevack, New York; Albuquerque, N.M.-based Alliance for Automotive Marketing, the MacManus Group unit that also handles GM's Pontiac-GMC dealer groups and reports to D'Arcy Masius Benton & Bowles; and Lord, Sullivan & Yoder, Columbus, Ohio.

The remaining four select shops are Roberts & Russell, Knoxville, Tenn.; Trainor & Associates, New Hartford, Conn.; Hughes, Ruch & Murphy, Brookfield, Wis.; and Moroch & Associates, Dallas.

"We had a lot of confidence in our agency, and Olds came in the middle of the night and changed things," one Olds dealer said. "It was underhanded."

Dealers said Olds General Marketing Manager Steve Shannon and Larry Pryg, dealer group marketing manager, made the changes without the knowledge of Darwin Clark, Olds' general manager since Jan. 1.

Mr. Clark denied through a spokesman that he learned of the moves when they surfaced at a heated dealer Board of Governance meeting Aug. 19.

Instead, Mr. Clark said he was "fully aware of the plan to streamline agencies right from the beginning."

He added that "there was an unfortunate situation with a lack of communication to dealers" at that meeting, but he declined to elaborate.

FEWER SHOPS

"We are not firing agencies," Mr. Shannon said, but added that Olds will have fewer dealer shops "probably over time" through "evolution and natural selection."

Olds gave Roberts & Russell the southeast Michigan dealer account previously handled by Alliance and Lord Sullivan's Columbus area account, dealers said.

Lester Thomas, who headed the Olds dealer account at Alliance, now moves to Roberts & Russell in the same role. Mr. Thomas said last week he will head the Olds Michigan account at a new Detroit-area office he's opening for Roberts & Russell.

He said Roberts & Russell got the account Sept. 1, but declined further comment.

Olds plans to give Trainor dealer accounts from Maine to Pittsburgh, including the New York Tri-State account previously handled by Partners & Shevack, dealers said.

REDUCED ROLE FOR SHOPS

"Given the reduced role of agencies developing creative work in individual [dealer] zones, it's more practical [for Olds] to go with agencies smaller than us," said Partners & Shevack CEO Brett Shevack. "Now we are free to explore bigger opportunities in the automotive category that we passed on in the past based on our loyalty to Olds."

Alliance announced Aug. 1 it had resigned its Olds dealer accounts, but dealers maintained the shop was fired.

Alliance's split with Olds followed dialogue with the carmaker that was "very positive and very constructive," said Mark Gjovik, exec VP and Pontiac-GMC dealer group account director at DMB&B, Troy, Mich. He said the agency resigned the account because "we couldn't make the same kind of commitment to Olds as to Pontiac."

DMB&B handles Pontiac's $181 million national account.

The other four agencies either declined comment or did not return calls.

DEALERS THREATEN TO WITHDRAW

A number of dealers are threatening to withdraw from their regional dealer ad associations. Dealer groups that don't use a select shop don't get extra ad money from Olds.

"That's how they're going to hold a gun to our heads," one dealer said.

Olds picked the seven select shops, from 41, in August 1995. The 41 shops were survivors of a cut the previous year from a roster of 80 agencies.

Dealers said they expect the division eventually to have just one agency for all dealer group work, but they couldn't predict whether it would be Olds national agency Leo Burnett USA, Chicago, or one of the select shops.

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