GM rejiggers as Guarascio exits

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Philip Guarascio, the high-profile executive in charge of the $3 billion marketing budget of the country's largest advertiser, is taking early retirement from General Motors Corp. His May 1 departure follows an audit of GM's advertising department and disclosure of the felony conviction of a former senior executive.

Mr. Guarascio insisted the decision to retire was voluntary. But news of his likely departure in the wake of the scandal was first reported in Advertising Age last month (AA, Feb. 7).

Mr. Guarascio, 58, was known as much for his GQ style and expensive cigars as he was for cutting cross-divisional deals, consolidating GM's media account and reducing commissions to the carmaker's agencies.

His marketing and advertising department is being dismantled and duties shifted to John Middlebrook, 59, VP-general manager of all GM vehicle brand marketing except Saturn. Mr. Guarascio's staff will now report to Mr. Middlebrook, whose title remains the same.

Industry executives don't expect GM's ad agency lineup to change as a result of Mr. Middlebrook's ascension. GM's current roster of vehicle agencies is: Campbell-Ewald, Warren, Mich., for Chevrolet; McCann-Erickson Worldwide, Troy, for Buick; D'Arcy Masius Benton & Bowles, Troy, for Cadillac and Pontiac; Leo Burnett USA, Chicago, for Oldsmobile; Lowe Lintas & Partners, New York, for GMC; and Publicis & Hal Riney, San Francisco, for Saturn.


Although speculation about Mr. Guarascio's departure has swirled since late January, the news still rocked the media community. Mr. Guarascio dropped his retirement bombshell on 700 attendees at the March 17 Adcraft Club luncheon in Detroit.

"It was 15 years ago that I said hello to Detroit at Adcraft, so it's sort of fitting that I say goodbye to Detroit here," he said. "Someone said, `Why now?' but it's not as simple as contemplating one's mortality." Mr Guarascio, who underwent triple-bypass heart surgery Feb. 2, said he is looking forward to "the third phase of my professional life."

"It's been a hell of a run, and you never know, it may not be over," he said. He declined to reveal his future plans, but said he's considering several options. He told Ad Age he plans to stay in Detroit, although executives close to Mr. Guarascio said they expect he will move to one of the coasts.

A GM spokesman said the early retirement was "all Phil's call," and insisted he wasn't forced out. Mr. Guarascio echoed that in phone calls last week to media and agency executives.

But executives close to GM, who asked not to be named, said pressure was exerted by Vice Chairman Harry Pearce, a straight-shooting, North Dakota native and attorney. Mr. Pearce was said to be alarmed by the negative publicity generated by GM's former Olympic general director, Dean Rotondo, who pleaded guilty to four counts of fraud over $100 in a non-GM matter in 1997. Mr. Rotondo, who Mr. Guarascio promoted twice in one year, left GM abruptly in fall 1999, sparking the department audit.

Word of Mr. Guarascio's retirement moved swiftly beyond Detroit to media enclaves on both coasts.

"Phil Guarascio truly changed the way American magazines think about dealing with Detroit. He is a pioneer in every sense of the word," said Steven Florio, president-CEO of Conde Nast Publications, who in 1995 negotiated with Mr. Guarascio the end to a five-year GM ban on placing ads in Conde Nast titles. "I'm sure whatever he goes on to do he will bring his wit, his intellect and his ground-breaking spirit to it."


Dave Long, president of media sales and marketing at Time Inc., also heaped praise on Mr. Guarascio: "I have a lot of respect for Phil and what he did for GM. People forget how decentralized it was before he got there. We used to have separate contracts with Chevy and Pontiac. He brought all those divisions together and centralized media buying. He saved them hundreds of millions of dollars."

Mike Mandelker, exec VP-network sales at UPN, said, "This was a guy who understood that advertising is an investment not an expenditure. . . . He is probably one of the most creative dealmakers I've done business with."

Mr. Guarascio was in high spirits at last week's luncheon, his first public appearance since the surgery. "I was going to come as an Italian leprechaun," he said to open the St. Patrick's Day speech, "but Armani doesn't make green suits." With a glass of red wine in hand, he quipped that his doctor told him two glasses daily were good for his heart, so he figured four would be better. He also said he wasn't giving up cigars.

Contributing: Ann Marie Kerwin, Wayne Friedman

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