"Latin America for all three companies is the fastest growing part of our business," said Joe DeDeo, Y&R vice chairman and chairman of Latin America, where billings grew 37.2% in 1993 to $457 million. "Miami is the natural place for it."
Heading up the restructuring effort, along with Mr. DeDeo, are Victor Gutierrez, vice chairman-general manager of Y&R Latin America, and Richard Stollenwerck, president of Wunderman Cato Johnson Latin America.
The reorganization, which also includes the Bravo Group, Y&R's Hispanic agency, is part of a $25 million investment whereby Y&R will increase its ownership stake of agencies in several Latin American markets including Argentina. Y&R will also link the region with technology, double staff to 60 and move senior personnel to Miami.
Centralization in Miami also makes sense for Y&R, the sixth-largest agency group in the world. The city has become the de facto capital of Latin America with numerous agencies and marketers establishing regional beachheads there. Among them: Ogilvy & Mather, Leo Burnett International, BBDO South, MCI Communications Corp., General Electric Co., MTV Latino, Texaco Latin America/West Africa and Seagram Latin America.
Y&R has recruited Ogilvy & Mather Latin America Regional Account Director Dexter Dwight to be senior VP-director of business development for the region. He is based in Miami.
Already, three New York-based creatives from Wunderman have moved to the new headquarters, and two more are expected to follow. Planning for the consolidation began late last year, with nearly all elements now in place.
Additionally, Y&R Inc. Exec VP-Chief Administrative Officer Jack Kraft, who formerly oversaw global operations for the more streamlined Leo Burnett Co., is working with Latin American group clients on compensation and international agreements, Mr. DeDeo said. Marketers involved include AT&T, Colgate-Palmolive Co., Kentucky Fried Chicken Corp. and Kraft General Foods.
Edgardo Lertora, AT&T's VP-public relations for the Americas, said his company has benefited from the office consolidation through both integrated services and the one-stop destination for Y&R Advertising, Burson-Marsteller and Wunderman.
Y&R has formed a "core group" from the three divisions to work with AT&T on its Latin American operations, said Mr. Lertora, whose company is relocating its regional headquarters to Coral Gables, Fla., and already has 250 staffers there.
"We are not working with Y&R, Burson-Marsteller or Wunderman Cato Johnson. We're working with Y&R Inc., who puts the whole package together," Mr. Lertora said.
Proximity in Miami will also allow the three companies to pursue common business interests, while maintaining individual operations, said Jeff Hunt, president of Burson-Marsteller/Latin America, Miami.
"We're learning more and more about each other's companies," Mr. Hunt said. "Any one interface could bring business to all three of the companies."
Mr. DeDeo underscored the shift as a "client-driven strategy" that gives the company a larger regional presence and streamlines internal operations.
But slashing global overhead is a mission of Y&R's new management.
Y&R Inc. has formed Shared Financial Services, headed in part by Marc Bromberg, senior VP-director of financial operations and formerly chief financial officer of Y&R Europe. That group has been assembled to consolidate operational infrastructure of Y&R's U.S. units, a move expected to save the company an estimated $10 million annually. There are no plans, however, to combine the actual units under Y&R's headquarters on Madison Avenue.
In another cost-saving move, agency insiders said the payroll will be cut by $10 million through layoffs expected by April 15.
Already this year, some 30 staffers have been pared from the payroll, for estimated savings of $3 million to $4 million.
Consolidations, cost cutting and a more tightly knit alignment of integrated marketing functions have been stepped up since Y&R Chairman Alex Kroll relinquished his ceo post to Peter Georgescu late last year.
Indeed, under Mr. Kroll the future of Mr. DeDeo at the agency was hazy. But insiders say the fact that Mr. DeDeo has the lead role in Latin America's operational reorganization signals he's securely on Mr. Georgescu's team.
His model in Latin America is expected to be a template for consolidating Y&R headquarter units in other regions, including Asia and Europe.
Mr. DeDeo said Latin America lends itself to the reorganization because of the region's common languages and coherent culture.