TRUE NORTH CHANGES MAY HELP SAVE PUBLICIS TIES;SPECIAL COMMITTEE TO TAKE LEAD IN NEGOTIATIONS; TOP EXECS AFFECTED

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True North Communications sent a strong signal last week it wants to heal its ailing alliance with Publicis Communications, putting outside board members at the negotiating table with Publicis Chairman Maurice Levy.

Related management changes also foreshadowed the likely departures of two of True North's top four executives, Craig Wiggins and Jack Balousek.

A worldwide strategic alliance between Chicago-based True North, whose largest holding is Foote, Cone & Belding, and Paris-based Publicis expired in February, leaving both holding companies free to pursue other partners everywhere except Europe. There, the two still co-own a network of agencies called Publicis FCB.

RESOLUTION NEEDED SOON

Negotiations have continued since then. True North insiders say the company needs to reach a resolution soon to avoid unsettling multinational clients such as S.C. Johnson & Son.

Last week, True North formed a special committee of outside directors to take "full responsibility for the Publicis relationship." Those directors are former IBM Corp. Group VP Stephen Veh-slage, who will chair the committee; former Citicorp President Richard Braddock; retired FCB executives Laurel Cutler and Louis Scott; former Federal Communications Commission Chairman Newton Minow; and retired Merrill Lynch & Co. Chairman William Schreyer.

True North Chairman-CEO Bruce Mason and Greg Blaine, 47, promoted to chairman-CEO of TN Technologies from director of global operating systems, relinquished primary negotiating responsibilities to the committee.

MOVES SIGNS OF PROGRESS

Several True North insiders viewed the moves as signs of progress in reaching a deal with Publicis, noting that Mr. Blaine was prevented from getting the TN Technologies top job earlier this year by the critical nature of the Publicis talks, which he had been leading.

Still, investors reacted negatively, dropping True North's stock about 4% to $22.25 June 28.

Mr. Levy couldn't be reached, and Mr. Mason had little to say on the changes.

At the top of TN Technologies, Mr. Blaine succeeds Mr. Balousek, assigned that job only three months ago. Mr. Blaine has been instrumental in building the joint venture with New York-based R/GA Media Group into a leading interactive agency and in pursuing a planned initial public offering for the unit.

A spokesman said future responsibilities for Messrs. Balousek and Wiggins have yet to be determined. Mr. Wiggins, 50, remains True North vice chairman but gives up his responsibility for mergers and acquisitions.

Mr. Balousek, 50, said he only learned of the changes when a media release was sent to his home last week.

built up s.f. office

Mr. Balousek rose to prominence at FCB by building up the San Francisco office in the 1980s, later becoming president-chief operating officer of True North. He was Mr. Mason's rival for the top job, but since Mr. Mason, 56, took over as CEO in 1991, Mr. Balousek's power has gradually been reduced. He recently lost his status as No. 2 executive when Brendan Ryan, president-CEO of FCB/Leber Katz Partners, New York, was named chairman-CEO of FCB Advertising.M

Contributing: Alice Z. Cuneo.

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