By on July 31, 2012

 

If this feels like the Manchester United and Ewanick day, so be it. If we’d pass up these morsels, we’d be accused of selective reporting. As a result of the torrent of leaks, we are now led to believe that the Manchester deal is what the Business Insider calls “one of the biggest marketing contractual screwups of all times.”

According to the leaks to Bloomberg …

“GM leaders had to ask for Ewanick’s resignation after they perceived that he failed to make clear some details of the contract to the senior management team, the people said. As a result, the leaders didn’t know the true cost of the United deal, worth about $300 million to be on the jerseys, one of the people said. GM plans to honor the arrangement, which was altered from what Ewanick originally crafted, the people said. “

What is this, amateur hour? Apparently, someone is trying to push a story of the chief marketing man surreptitiously signing a $300 million (according to Bloomberg,) or  $600 million (according to Reuters)  deal, then someone finds out, the chief marketing man is fired, the contract is changed and signed two days later. Is this what we are supposed to believe?

This is not how this works. At least not in a normal company. There a deal sheets drawn up, and reviewed by Purchasing, which usually wants a better deal.  Controllers get involved. Budget request are made, contracts are drawn up, multiple revisions are discussed between lawyers, multiple signatures are made. Proudly leaking a story of GM agreeing to a sponsorship deal without knowing its price is admitting that GM is run by the Keystone Kops.

Advertising Age sees it the same way:

People close to GM say they’d be surprised that, in a company with so many checks and balances, that a sponsorship deal would get through if it wasn’t airtight and squeaky clean.

“I find it hard to believe that that would be the impetus for Joel leaving the organization, because there are just too many processes and signature authority needed that would eliminate,” one executive close to GM told Ad Age. “It’d be almost impossible, and given Sarbanes Oxley there is so much oversight on all these deals that go on. I couldn’t believe that GM would be so lax with their controls…especially since the whole bankruptcy situation. It could be GM not looking to have egg on their face because they hired the wrong person to start with.”

These leaks are shockingly naive, and they hurt the company. If an executive gets caught double-dealing, then you quietly let him go, or even better, tie him down with a two year contract to keep his mouth as shut as yours.  If the CEO really forgot to ask “now what is this supposed to cost us?” then please, don’t leak it.

This is not an Ewanick disaster. This is a Selim Bingol disaster. The job of a PR chief is to make the CEO stand above all. These leaks make Akerson look incompetent.

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37 Comments on “Ewanick And GM: The Leaks Continue, Someone Fetch Depends...”


  • avatar
    psarhjinian

    “I couldn’t believe that GM would be so lax with their controls”

    I believe it was Mr. Rattner who said that certain of GM’s basic financial controls were inadequate or absent entirely.

    • 0 avatar
      bumpy ii

      Yep. GM was (and is?) the classic example of not being able to find your ***hole with both hands behind your back. Despite all the “new GM” talk, it’s still staffed 99.44% by the same people who saw the old GM into bankruptcy, and there has been no effort to cull the dead weight or create a new corporate culture since then. (A conventional bankruptcy might have helped with that).

  • avatar
    Pch101

    I don’t know GM’s exact management policies, but it’s reasonable to assume that nobody gets to spend several hundred million dollars without the CEO’s blessing.

    The smell of BS is getting stronger by the minute.

  • avatar
    Detroit-X

    The reason there is so much attention/fascination with GM news like this is that their collective leadership incompetence knows no bounds, while at the same time, their arrogance is stunning. In this manner, GM is far from being loved like an underdog. Even though GM’s success would be a point of pride for the USA, people don’t like to see leaders like this win.

    • 0 avatar
      FromaBuick6

      I couldn’t have said it better. The company has been run by the Keystone Kops for decades, yet everyone, from the Fourteenth Floor down to the retiree that got hosed on his pension, still acts like its 1977 when the General owned half the market. Thats not constructive, and its not the sort of thing that attracts investors or new retail customers.

  • avatar
    sunridge place

    Just asking….is it not plausible that he was fired for not following protocol in this deal?

    Perhaps he shook some hands on a deal and then when the deal was looked at by the right people, the crap hit the fan so to speak.

    Everyone is just shocked that business controls weren’t present…yet it seems he was fired for not following those business controls.

    Plus, sounds like he was a real pompous jerk so no one had his back.

  • avatar
    Domestic Hearse

    This is political damage control with Ewanick the fall guy.

    Ewanick made a deal to improve Chevrolet’s presence in Europe, where GM, via Opel, is bleeding cash and where the short and long-term outlook for vehicle sales is, shall we say, bleak.

    GM Management was well aware of the ManU contract, its costs, terms, etc. It was green lighted top down.

    But then, politics via handlers in Washington D.C.: “You spent what on a marketing campaign where? While you’re still billions in hole to American taxpayers? Do you know how that’s going to look to voters with an election coming up? Have you guys lost your minds?”

    So the spin starts. We didn’t really mean to do it. We weren’t sure of the details, and we’d never agree to something like this. It’s not our fault, it was that guy’s. It was him. See, we fired him. All better. But we’re stand-up businessmen and we’ll honor this terrible deal.

    It’s worse than being incompetent. It’s cowardice.

    • 0 avatar
      Sinistermisterman

      Out of all the theories I’ve read and heard, this seems the most plausible.
      Ewanick hasn’t shown himself to be incompetent in any of his previous roles, and despite GM coming up with a whole host of other excuses as to why they wanted rid of him (Facebook, Superbowl), he’s actually seems to have made some effective money saving decisions by consolidating all Chevy’s ad business into one company. Either he rocked the boat too much, or as per Domestic Hearse, he’s the victim of political machinations.

    • 0 avatar

      Occam’s Razor gives it a clean shave

      • 0 avatar
        Pch101

        Right. The US government is upset that GM would do a promotional deal with a team owned by the same American who owns the Tampa Bay Buccaneers. Makes perfect sense…not.

        http://www.forbes.com/profile/malcolm-glazer/

      • 0 avatar
        Syke

        However, I seriously doubt that most American voters realize that a British football, er, soccer team is owned by the same guy who owns the Tampa Bay Buccaneers. All they see is that a company bailed out by their tax dollars (against many of their wills) is now spending it’s money on “what the English mistakenly call football”, and leaving the NFL high and dry. In this argument, that’s the big political fear.

    • 0 avatar
      WaftableTorque

      *Ahem*. With all this speculation, why not just contact Ewanick and get his side of the story? He doesn’t have anything else to do right now, and who knows, TTAC can get a guest blogger while he’s in between jobs. Bertel?

  • avatar
    areader

    @Domestic Hearse:

    I don’t see your point concerning an effort to increase sales outside the US. If this were a GM effort to import cars to the US, OK, but that’s not what it is. All the speculation is interesting, but something close to the truth might pop out in a few days.

    This stuff just puts GM in the same league with HP and Yahoo of late with their musical chairs CEO circuses and stems from the same kind of problem. Utterly incompetent boards.

    • 0 avatar
      Sinistermisterman

      I think that GM’s long term plan is to sh*tcan Opel & Vauxhall and replace them both with the Chevrolet brand. By sticking the bow tie on Man U shirts, the Chevrolet brand would become much better known in Europe than it is today, and pave the way for phasing out Opel & Vauxhall.

      • 0 avatar
        Silvy_nonsense

        “I think that GM’s long term plan is to sh*tcan Opel & Vauxhall”

        Don’t forget Holden. You can’t achieve brand hegemony unless you go all out.

    • 0 avatar
      Domestic Hearse

      The point is: GM is an American company, bailed out recently by American taxpayers and owned in part by the American government.

      This same American company canceled — publicly — marketing spends with Google (an American company) and The Superbowl (the most American entity one can conceive).

      Then GM turns around and spends their marketing money with ManU instead. All with the hopes of making Chevy the GM brand in Europe, moving away from traditional GM Euro-brands Vauxhall and Opel.

      To the non-car-guy American voter, this does not look like a very American activity. Why would GM take our tax money and turn around and spend it with ManU and not the Superbowl? Why are they sponsoring a team in a league we cannot even watch over here?

      This is, to those minding GM in D.C., a political nonstarter. They’ve been ordered to fix this and they’ve started by blaming the guy who put it together.

      • 0 avatar
        Pch101

        The political conspiracy theories are nonsensical. Comments such as these are starting to make this place look like The Lunacy About Cars.

        This is the same General Motors that is importing Buicks from Germany and Chevys from South Korea. Enough already.

        This is looking simpler by the minute:

        -Ewanick pissed somebody off. (My guess would be that the boss man himself, Akerson, is at least one of the somebodys.)

        -Somebody else was dumb enough to take a public swipe at Ewanik on the way out the door

        -This dumb swipe has resulted in questions from the press. Since GM management can’t respond by saying that they don’t like the guy personally, they’re then forced to cook up a “rational” explanation.

        The problem here is that the explanation isn’t looking so rational. But now GM has to stick to their guns, lest they open themselves up to a wrongful termination suit, hence the ongoing rhetoric. If they had any class, they would have said that he was leaving “to explore other opportunities” and wished him the best of luck, instead of trying to plunge a dagger into his back.

      • 0 avatar
        DeadWeight

        TTAC is blessed to have Pch101 as one of its regular commentators.

        He cuts to the heart of all matters previously speculative, and dishes out 100% verifiable fact, in a sound, logical way, on each and every matter, ranging the full gamut of all matters presented, like no one else can, to give us all the end-all and be-all answers we crave.

      • 0 avatar
        ajla

        “This is the same General Motors that is importing Buicks from Germany and Chevys from South Korea. Enough already.”

        The design work came from Germany and SK, but their final assembly all currently occurs in North America. (The Regal was imported from Germany its first year)

      • 0 avatar
        Detroit-X

        “-Ewanick pissed somebody off.” Very likely. GM wants “Steve Jobs” results, without tolerating a Steve Jobs type.

      • 0 avatar
        DC Bruce

        “Fend off a wrongful termination suit” Really, Pch101? Your slip is showing. A guy like Ewanick works under an employment contract negotiated between his lawyers and GM’s lawyers. It has a binding arbitration clause, so there’s no public spectacle and airing of dirty laundry in court. And he most definitely doesn’t rely on something as squishy as the Michigan courts’ jurisprudence on what constitutes “wrongful termination.” That’s all been worked out beforehand in the contract. Whatever is said or not said publicly isn’t going to influence the situation. Although, I have to say the way this was done seems gratuitously messy, hasty and stupid.

        Count me among the “lunatics.” This is an election year. The Republicans are making an issue about the magnitude of the bailout money going to the poltically connected. GM’s market share is trending in the wrong direction; it’s European operations are a disaster exacerbated by an economic crisis. So, spending “taxpayer money” on a sponsorhip of a British soccer team, regardless of who actually owns it, is just more grist for the political mill. GM was importing Buicks from Germany; now its making them in North America.

        If anything makes sense here, it’s Domestic Hearse’s theory.

      • 0 avatar
        Sam P

        “The political conspiracy theories are nonsensical. Comments such as these are starting to make this place look like The Lunacy About Cars.”

        Seriously. If I want political conspiracy theories, I’ll go to freerepublic or dailykos.

      • 0 avatar
        Pch101

        “A guy like Ewanick works under an employment contract negotiated between his lawyers and GM’s lawyers. It has a binding arbitration clause, so there’s no public spectacle and airing of dirty laundry in court.”

        I guess that you haven’t been paying attention to this story. Let’s recap: GM didn’t just terminate him, they’ve publicly badmouthed him.

        You can bet that his employment contract doesn’t have language that allows for slander, or for ending the contact prematurely just for fun without appropriate compensation.

        Again, Occam’s Razor would suggest that when a company trash talks a former employee that it probably isn’t for strictly professional reasons, as it’s unprofessional to slam a former hire in public. Unless they have some good reason to distance themselves from him (i.e. he’s about to be arrested), there isn’t a rational reason for GM to initiate gossip about him to the press.

        I don’t know Mr. Akerson, but he is ex-military and per the media, he has the reputation of trying to run things with a firm hand. If the latter is correct, then he may be a control freak who likes to get his way, and Ewanik was (rightly or wrongly) not giving it to him.

        “Count me among the ‘lunatics’.”

        Duly noted.

      • 0 avatar
        geeber

        Conspiracy theories are fun, but I agree with Pch101. Most likely, GM hired Ewanick to achieve certain results. They thought he would sprinkle some Hyundai marketing magic on GM, and – presto! – it market share and sales would start rising.

        Which fits in with GM’s barely concealed attitude that the real problem isn’t that too many of its vehicles are mid-pack compared to competitors, but that customers are too dumb to realize just how awesome GM vehicles really are. A little marketing magic should just fix that…

        Generally, however, executives at Ewanick’s level aren’t exactly shrinking violets. I wouldn’t be surprised if he rocked more than a few boats at GM (and the advertisting agencies), including the big boat belonging to Akerson.

        The real shocker has been GM’s utterly inept handling of the public relations surrounding his departure, but “incompetence” rather than “political conspiracy” is the more likely culprit.

        If I were in the Obama Administration, I’d be more worried about someone in the opposing camp making the claim that the “new” GM is just as hidebound and incompetent as the old GM in many ways, even after the government-guided bankrupcty and huge infusion of taxpayer money. That is the real issue here.

        As for the claim that Americans will be upset that GM is spending money on an English soccer team instead of the Super Bowl – most Americans view professional athletes, and their teams, as a overpaid and coddled. The argument that GM is spending money to support events featuring overpaid, coddled English athletes instead of overpaid, coddled American ones isn’t going to gain that much traction, even in an election year.

        Even my friends and family who don’t follow the auto industry know that GM has operations in many countries, and has had them for decades.

  • avatar
    Geekcarlover

    Back when the bankruptcy/bailout began, one of the (many) problems sighted was that they were topheavy with management. Too many people with the title Chief of _______. It seems that not only does the problem still exist, but non of the Chiefs can stop what another has started.
    It’s a risky way to run a company, but perhaps the time has come for an Imperial or absolute ruler. Someone who’s word is law. With the right person efficiency can be greatly increased. It ends second guessing what other departments or divisions are doing.

    • 0 avatar
      sunridge place

      Actually, GM just removed a level of executives in the last week.

      http://www.businessweek.com/ap/2012-07-25/gm-streamlines-vehicle-development-cuts-20-jobs

      Surprised it didn’t get much play on here unless I missed something.

  • avatar
    Robert Schwartz

    What number were we up to in the GM Deathwatch?

  • avatar

    Bertel, any guesses on the chief leaker here? Girsky, maybe?

  • avatar
    mitchw

    Let’s get dark. Was there a kickback to Ewanick from the Glazers? Some shares in the IPO? I hope not

  • avatar
    el scotto

    One of the courtiers displeased the king. No longer will he be able to sup in the grand hall and drink wines with wenches. Tis a trifle as the palfrey packs his horse.

  • avatar
    MLS

    I like the accompanying pic. Incidentally, those so inclined may visit http://thegreatamericantryon.com to obtain a free sample of either men’s or women’s Depends. After I got over the hilarity of the Wes Welker/Lisa Rinna ad campaign that aired during the NCAA basketball finals, I (anonymously) sent samples to all of my friends.

  • avatar
    Domestic Hearse

    And so the bashing of this deal by GM has begun on political blogs…

    http://freebeacon.com/government-motors-spends-600m-on-uk-soccer-promo/

    This, via a link on DrudgeReport. Which means, millions of eyeballs today.

    “General Motors plans to shell out as much as $600 million to sponsor a European soccer team despite owing $27 billion to American taxpayers.”

    GM, informed this was going to happen by their politician advisors, have been trying to dance their way out of this tone-deaf deal, starting with firing Ewanick. And denouncing him publicly. Loudly. And curiously unprofessionally.

    Call it a “conspiracy theory” if it helps support a challenging theory (labeling opposing views, or argument by slogan, if you will). However, it won’t be long before the MSM picks this political nugget up and runs with it. And the GM bus running over Ewanick will grow bigger and louder by the day.

    • 0 avatar
      geeber

      Domestic Hearse, I believe that a review of my prior posts on various topics would show that I am hardly a liberal or a stalwart supporter of President Obama.

      But I truly believe that this is the result of a clash of personalities, along with inept public relations on the part of GM’s executive team.

      I doubt that Ewanick negotiated this deal in private, and signed the papers committing GM to it, without the knowledge of anyone else on the executive team.

      The alternative is that Akerson and other executives only came to the realization this deal might not play well in Peoria AFTER the paperwork had been signed. Sorry, but even I can’t believe that GM leadership is THAT inept.


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