PASS fails key Chrysler test

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The $140 million multicultural review by DaimlerChrysler's Chrysler Group took another strange turn last week.

With the automaker expected to announce the winner this week of a review involving three coalitions of multicultural shops, former front-runner PASS Entertainment, New York, failed to pass muster as a certified minority-owned agency, a requirement to win the business (AA, June 10). Interpublic Group of Cos.' Global Hue now appears to be the front-runner.

In an apparent 11th-hour bid to stay in the race, Steve Stoute, a record-industry executive and partner in PASS with Peter Arnell, CEO of Omnicom Group's Arnell Group, faxed a letter to Chrysler's George Murphy, senior VP-global brand marketing, July 18 stating the shop was 100% acquired by Cultura, a certified minority-owned Hispanic shop in Dallas that is part of its PASS Urban Powertrain coalition.

"This combination is a natural progression for these two companies under Urban Powertrain to seamlessly service and provide tremendous contribution of partnership value on the DaimlerChrysler account," said the letter, of which Advertising Age obtained a copy. It is not clear whether Mr. Murphy got the letter, as he was out of the office late last week. Chrysler, through a spokesman, declined to comment on the Cultura-PASS deal and the status of the review. "The bottom line is we want [the winning group of multicultural shops] to be certified," he said.

acquisition

Juan Faura, Cultura's president, acknowledged the acquisition. "It was part stock deal and cash transaction," he said, but would not disclose terms. Cultura is 60% minority-owned by Mr. Faura and 40% owned by Grupo Samba, a Hispanic ad-holding shop that is 70%-owned by Omnicom-backed Dieste & Partners. Dieste handles the Hispanic portion of Hyundai Motor America. Mary Hardeste, managing partner of Cultura, owns 10% of Grupo Samba's investment in the shop, according to Mr. Faura. Cultura and PASS applied for minority certification at the same time. Cultura passed muster with the Dallas-Fort Worth Minority Business Council but PASS flunked with the Minority Purchasing Council of New York and New Jersey.

"We waited to pull the trigger," Mr. Faura said, adding his shop acquired PASS after it failed certification so the coalition would fulfill the requirements of the Chrysler review. According to Mr. Faura, Mr. Stoute's agency will be fully absorbed into Cultura, a 20-person shop.

Mr. Faura's next move is to acquire L3, the New York-based Asian agency that is part of Urban Powertrain, which eventually will become the name of the merged shop.

Chrysler expected to have a decision June 1. But last month Jim Schroer, exec VP-sales and marketing, told Advertising Age the reason for the delay was to allow all three finalist coalitions to meet the requirement of minority certification. Incumbent GlobalHue, Southfield, Mich., which won the account in 1994, has been certified for years. The third coalition is S.I.P, comprising Publicis Groupe's Sanchez & Levitan, Miami; Prime Access, New York; and IW Group, Los Angeles.

Messrs. Arnell and Stoute did not return calls. Don Coleman, chairman of GlobalHue, didn't return calls.

The scales may have tipped in GlobalHue's favor after presentations June 17. The agency, which includes the former Montemayor y Asociados, the San Antonio shop that handles Chrysler's Hispanic account, got the most votes from members of the review panel, said another executive close to the situation.

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