GM REVAMP TAKES BRAND FOCUS TO LOCAL LEVEL REGIONAL, RATHER THAN DIVISIONAL, CONTROL TO DIFFERENTIATE VEHICLES
With two debilitating strikes settled last week, General Motors Corp. Aug. 4 will announce a major reorganization and consolidation of its North American sales and marketing operations to employees in a closed satellite telecast.
The goal of the reorganization, expected for more than a month (AA, May 18), is to push brand management down to the local level for better vehicle differentiation and less emphasis on divisional brands such as Chevrolet.
POST-STRIKE ADS READIED
Separately, two GM ad agencies-McCann-Erickson Worldwide, Troy, Mich., and Campbell-Ewald, Warren-pitched for a post-strike national ad campaign that could break this week, with the efforts being tested via focus groups in Chicago at press time.
The pitches come as GM, the country's largest media spender with a $2.2 billion outlay in 1997, considers its post-strike advertising plan.
A GM spokeswoman said the marketer will resume some media spending for the new retail-oriented push this month in TV and perhaps print. The carmaker significantly cut media expenditures during the strikes.
A decision may come as early as this week, she said.
"I think GM is going to have to do some serious advertising spending to rebuild its marketing momentum," said auto analyst John Casesa, managing director of Schroder & Co. "They'll have to spend enough to get back into the consumer's consideration set."
STAFF CUTS ON THE WAY
GM, meanwhile, is expected to dismantle its longstanding sales and marketing organization-the stand-alone Chevrolet, Cadillac, Oldsmobile, Buick and Pontiac-GMC divisions. The Saturn Corp. subsidiary apparently isn't affected.
According to executives close to GM, three new positions will be created under brand czar Ron Zarrella to separately oversee sales, service and marketing for all brands by region. A spokesman for Mr. Zarrella's office did not return calls by press time.
GM's regional staff, now organized by division to advise dealers on sales, service and marketing, will be consolidated into offices handling all brands.
The restructuring will result in staff cuts, some via early retirement offers, with estimates reaching as high as 30% of white-collar workers, executives close to GM
said. GM's 5,100-strong field staff is expected to take the biggest hit. Divisional jobs are also expected to be trimmed as duplicated functions, such as human resources, are centralized.
GM early this year said its 1998 global cost-cutting goal is $4 billion. The strikes, which caused a halt to nearly all production, make the cuts more crucial: GM lost some $2 billion in revenue during the seven-week strikes.
THREE IN LINE FOR POSTS
Executives close to GM didn't know the titles for the three new positions under Mr. Zarrella, group VP-sales, service and marketing for North America. But it's expected three divisional general managers will get the posts: John Middlebrook, general manager of Chevrolet, to oversee advertising, marketing and brand managers; Roy Roberts, now Pontiac-GMC general manager, for sales; and Darwin Clark, general manager at Oldsmobile, to handle service.
Philip Guarascio, VP-general manager of marketing and advertising under Mr. Zarrella, will continue in his current duties.
Each of the three in the new posts will have five executives reporting to him, one for each region and each with equal authority. Mike O'Malley, marketing services manager at Pontiac-GMC, who played a leading role on the committee that reorganized GM's field staff, is expected to be named to one of the five positions under Mr. Roberts.
Messrs. Middlebrook, Roberts and Clark were all unavailable for comment at press time.
There's also speculation GM will combine divisions.