Saatchi 17 spark General Mills' ire

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Mike Burns' friends say he has at least six job offers. Saatchi & Saatchi claims client General Mills is going nowhere, and that its breakaway employees might return. Publicis is exploring legal options. Interpublic Group of Cos. is backing off, at least for now.

And General Mills wants to wash its hands of the entire sordid affair.

Welcome to week two of the Saatchi saga, replete with sabre rattling, face-saving moves, legal posturing and bald anger. What's missing are answers as to what will happen to the 17 employees who resigned from the shop en masse Feb. 14-and had signed nonbinding letters of intent to join Interpublic-their former boss Mr. Burns or the client they all used to serve.

"No one has escaped General Mills' wrath in this situation," said one executive close to the company. Said another: "What's playing out in the press is the last thing General Mills would want and the [former Saatchi employees] are playing a dangerous game since there has been no quid pro quo of, `You leave and we'll take you along.' "

Putting the best spin on the embarrassing situation for Publicis Groupe's Saatchi & Saatchi, Worldwide CEO Kevin Roberts last week declared that General Mills, an 80-year Saatchi client, assured the agency that "it was unaware of the breakaway." The marketer of such brands as Yoplait, Cheerios, Pillsbury and Progresso also said its business wouldn't move, according to Mr. Roberts. General Mills said only that it looked forward to continuing its relationship with Saatchi.

Mary Baglivo and Tony Granger, the executives Mr. Roberts hired last fall to turn around Saatchi's New York office, are courting various members of the team, which includes account executives, planners and creatives, with possible offers of re-employment. But some say their return is unlikely, and the agency is looking at outside candidates.

"Saatchi's scrambling," said one executive. If key leaders such as Ann Adriance and Mary Haskin don't return, hiring new staff could take months. Because of that potential disruption, Publicis Chairman Maurice Levy is believed to be exploring legal action against those employees. Publicis declined to comment.

backing off

Interpublic, which was set to hire the former Saatchi employees to form a new unit or to work with Campbell Mithun, which handles some General Mills business-has, at the client's request, backed off to allow Saatchi management to negotiate with ex-staff. Interpublic declined to comment.

Mr. Burns, the Saatchi veteran who used to lead the General Mills team, didn't respond to repeated phone calls or requests for interviews. The account director was said by several people to have been unhappy and in talks about leaving Saatchi since last fall. He ran his team as an agency-within-an-agency. But when Ms. Baglivo and Mr. Granger joined, Mr. Burns lost his role as co-CEO of Saatchi's New York office, and much of his autonomy. Ms. Baglivo "wanted to get to know how [the General Mills account] ran, its financial situation, how everything works," said one executive familiar with the situation. "Mike was treated like he wasn't important."

The 48-year-old Mr. Burns worked on the account for 25 years. "His work was his family. It's is a little club, his group," said one executive. He held holiday parties on the agency's 17th floor to which only his team was invited. And his girlfriend works at Saatchi, although not on General Mills.

His familiarity with General Mills to the exclusion of most other agency issues was a sore point to some, and could have hurt his ambitions to one day run the office. Mr. Burns didn't reach out to employees beyond the General Mills group, even to learn their names, said one executive.

"Saatchi's a big company. What does it need in a CEO? Diversity and breadth of experience," said that executive. "If you were hiring someone to run a big agency, I don't think most people would think of Michael."

contributing: matthew creamer, stephanie thompson, laurel wentz

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