" /> " /> ADWEEK FEATURE: PANIC in DETROIT -- GM's review of the $140-million Oldsmobile account blindsided Leo Burnett ceo Rick Fizdale. But was it a hit-and-run, or a planned 'accident' designed to shake up all car agencies? <b>By DAVID KILE</b><br clear="none"/> | Adweek ADWEEK FEATURE: PANIC in DETROIT -- GM's review of the $140-million Oldsmobile account blindsided Leo Burnett ceo Rick Fizdale. But was it a hit-and-run, or a planned 'accident' designed to shake up all car agencies? <b>By DAVID KILE</b><br clear="none"/> | Adweek
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ADWEEK FEATURE: PANIC in DETROIT -- GM's review of the $140-million Oldsmobile account blindsided Leo Burnett ceo Rick Fizdale. But was it a hit-and-run, or a planned 'accident' designed to shake up all car agencies? By DAVID KILE

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Rock hadn't expected to be playing the gunslinger at age 56. He was planning to take early retirement and settle back on his ranch. But as GM's woes mounted and its management upheavals began last spring, Rock got the call to fix Oldsmobile. Officially, he waited until Sept. 15, after new general marketing manager Knox Ramsey came aboard at Olds, to notify Burnett that a review for the $140-million account was in the offing. Those close to the situation say Rock had prepared Rick Fizdale, Burnett's chairman and ceo, for the jolt early on. Fizdale spent much of the summer trying to pacify Olds and to stem the rumors swirling around the agency's Southfield, Mich., office, where 110 staffers service the car account. By the fall, however, the boardroom drama that had begun in April concluded with the ouster of GM chairman Robert Stempel. With a massive shakeup at the country's biggest company under way, nothing was certain anymore.
Many agency executives in Detroit insist the Olds review is an isolated event, not the first domino in what will be a series of GM agency reviews. 'I don't see the Olds review having any connection to other GM divisions,' says Richard O'Connor, chairman of Chevrolet agency Lintas: Campbell-Ewald. 'I would not call it a shot across the bow. Each GM division operates on its own.'
True, but with several caveats. First, although some GM divisions show rising sales, the company has been losing overall market share because of a shortage of new 'home run' products. Oldsmobile is by far the biggest offender, having slumped from sales of 1.1 million cars in the mid-'80s to about 450,000 in 1991. All divisions are on notice to protect their franchises and start turning profits - or else. Second, GM's management restructuring has led to the creation of a post that will coordinate sales and brand advertising across all divisions for the first time. That power has been given to J. Michael Losh, a fast-track executive who needs ot distinguish himself in front of GM's new leadership. Finally, while some GM agencies may have escaped the criticism that has stung Burnett's work for Olds, passable ads are no longer a security blanket. Agency executives looking to contented division general managers in Detroit to quash their fears of a future review may be looking in the wrong direction.
The reason: Dealers are the ones gaining power these days. To emphasize that point, Rock claims the Olds review is not about advertising at all. 'This review is about the business process and empowering our dealers to have a say in the most important parts of our business,' he says. 'A lot of people think I'm pissing away 'The Power of Intelligent Engineering' (Olds' tagline). That isn't it at all.'
Indeed, any GM general manager could find himself in the same corner that prompted Rock to hold this review. When Rock took over the ailing brand, he faced open revolt among his dealers. After all, Olds' problems weren't just affecting GM, but Olds dealers who have evaporating investments in showrooms, inventory and salespeople. 'It didn't seem like anyone was interested in hearing what we had to say about anything, says Dick Smith, a Charleston, W. Va. dealer who was chairman of Olds' dealer council in 1992. In response, Rock, who had been in charge of GM's dealer relations before taking over Olds, hit the road for several months, meeting with as many Olds dealers as he could. And he listened. Along the way he heard complaints echoed about the product line, dealer financing, incentives, promotion dollars for local advertising, and . . . national advertising. There was little he could do immediately about the first few factors. GM was strapped for money, and Olds was sitting on a product plan locked and loaded for five years. That left only one bone Rock could throw to his hungry dealers to make them feel like they had any power - a bone that went crashing through Fizdale's 22nd floor office window on Chicago's Wacker Drive.
Word started spreading through Burnett's ranks over the summer that the account was in trouble. For an agency with an otherwise solid creative reputation, Olds was seen as a weak but vital link in Burnett's $2-billion chain of U.S. billings. Still, the account was deemed safe, given Burnett's tremendous resources and its history of holding onto accounts for decades. 'Most of us didn't think it possible that a GM division would hold a review, but we knew that something had changed since April,' says one staffer in Burnett's Southfield office. 'The tenor of almost everything we did changed.' Account planning and creative meetings were being postponed without reason. Work that was in progress was being undone. And rumors began that key personnel, like Ted Jordan, senior vp and general manager of the Southfield office, would resign. Other stories circulated between Chicago and Southfield that a new creative team that had worked on Honda ads at Rubin Postaer would be brought in. None of those things materialized. Instead, a bigger shock arrived on Sept. 15, with Rock's public disclosure of the review.
Shortly before the review was announced, Rock had begun talking about the 'Saturnization' of Oldsmobile. The comparison was apt: Shadowing the troubles at Olds and Burnett over the last year has been the success of GM's spinoff Saturn division and its agency, Hal Riney & Partners. But whether Rock's vision of such a cultural transference can be achieved is another story. It's a tall order, considering Saturn began with a blank sheet of paper and had seven years and a few billion dollars to germinate, along with a carefully selected group of dealers to sell and service its cars. Olds, meanwhile, was stuck with a mediocre product line and some 3,000 dealers - about twice as many as it needs at current sales levels. Still, 'Saturnization' was a hook for Rock to create an instant, positive perception about what he was setting out to do: revamp and redefine the division's culture, philosophy, product and image.
The reality of the Saturnization comment is that Rock has gotten GM to agree to an 'affiliation' of Olds with Saturn. What that means in Rock's barnyard vernacular is that GM will find out if the old plow horse can learn anything by watching the thoroughbred run around the track.
Where does that leave Burnett? Since Rock announced the review nearly four months ago, GM's new top management has been busy overhauling every aspect of the company, from parts buying and factories to organization charts and product lines. In the midst of such housecleaning, some outside directors on GM's board hinted that a division or two should be shut to reduce capacity. The speculation about GM killing Oldsmobile, first reported in The Washington Post, sent Rock on a damage-control mission to the press, dealers and his own employees. He insisted that Olds is here to stay. But consumers, turned off by the bad press, stayed away. So Rock's brief tenure took a sharp turn into crisis management as showroom traffic slowed to a trickle in November and December, thus delaying the review. Also, Olds' agency selection committee, at first enamored of the idea of looking at creative boutiques, as Saturn did with Riney, found that small shops such as Cliff Freeman & Partners and Deutsch/Dworin of New York, while fitting the bill of hot creative agencies, would be swallowed up by an account as demanding as Olds.
That realization, combined with a shortage of untethered major agencies, led to an astonishing phone call by GM to Burnett in October. Olds executives, presumably Rock and Ramsey, with the help of GM general manager of advertising and marketing Phil Guarascio, suggested to Fizdale that Burnett might affiliate itself with Riney the way Olds had latched onto Saturn - an apprenticeship, in effect, that could short-circuit the review and save the account.
Fizdale, says an executive with knowledge of the conversation, gave an unequivocal 'no.' Such an arrangement would be an admission the account was in review because of poor advertising - a notion even Rock refutes. Moreover, the Burnett-Riney proposal, considered outlandish by many agency executives, serves as an example of how little GM executives understand the ad business, says Los Angeles auto marketing consultant Dennis Keene. 'For Burnett to have agreed to the Riney affiliation would have given every client the agency has an excuse to put its creative with another shop,' says Keene. 'To say nothing of how such a move would undermine new business prospects and the agency's own staff morale.'
Still, the suggestion was not without precedent. It was reminiscent, on a grander scale, of how Rock handled the GMC truck line in 1991. He wanted to fire McCann-Erickson, which responded by buying part of The Competitive Edge, an agency that was successfully producing most of GMC's dealer advertising and had been angling for the truck account. McCann turned the acquisition into a satellite agency, McCann-Erickson SAS, and saved the business.
Burnett has dismissed affiliating or buying Riney, which is known to be for sale. But the agency is not taking the review lying down. Fizdale has put together a team that includes Jim Oates, vice chairman of client services, president Bill Lynch, and Bob Welke, group creative director, to pep up the current advertising and prepare a detailed long-term plan. Outside consultants have also been brought in to shape the plan, which is expected to go to Olds dealers and executives in the next two weeks. It will describe how Burnett will reinvent its handling of the account to go along with Rock's reinvention of Olds.
Such aggressive moves, along with recognition from Rock and Ramsey for their current ad efforts, have given Burnetters hope. In fact, some executives at contending agencies like Ayer, Tatham RSCG, Lowe & Partners, and Jordan, McGrath, Case & Taylor think the incumbent has suddenly and surprisingly become the favorite in this review. Privately, Burnett executives have grown more confident. When the review was announced in the fall, Fizdale would say only this: 'We are Oldsmobile's agency of record. As far as I am concerned, Oldsmobile has told me they are speaking to other agencies about a possible assignment. We are doing our job as best we can, and hope that Olds stays with us for many years to come.'
Does Burnett have anything to apologize for? Sources at and close to Burnett are divided on the performance by the agency, which has held the account for 25 years. Some say the agency's account team, led by Jordan in Southfield since 1987, had grown complacent. Others say any complacency is understandable, given a client that had no idea where it was going. Even general marketing manager Ramsey, who had been at Buick before joining Olds last August, admits, 'Olds has not been the best of clients for some time, and we know that.' But Ramsey doesn't hesitate to demand accountability: 'Certainly our ad agency played a role in what has gone wrong.'
However each side views the past, there is little disagreement that the clock began ticking when the agency introduced 'The New Generation of Olds' tagline and the 'This is not your father's Oldsmobile' theme in 1988. Olds sales had dropped precipitously in 1987, falling some 40% even as the consumer economy was humming along. The old tagline, 'Olds Quality, Feel It,' was getting stale and anemic, and GM loyalists were defecting in droves to the new midsize imports. 'The New Generation of Olds' line made sense because several new and different vehicles, such as a redesigned Cutlass Supreme that had escaped notice and the Silhouette minivan and Bravada sport utility, were coming on line. The 'not your father's Olds' line was decided on after some 100 different campaign ideas were submitted by dozens of Burnett creative teams. It was inspired by two propositions dictated by the client, who at the time was general manager Bill Lane. Lane wanted to lower the age of Olds buyers, which had averaged above 60 for years, and get some headlines, preferably with the use of celebrities. 'Not your father's Oldsmobile' was a direct reach to younger buyers, as well as a natural vehicle to use celebrities - William Shatner, Ringo Starr, Mel Blanc and others - and their children who were of driving age. But the theme violated a basic tenet of copywriting by telling consumers what an Oldsmobile is not, without telling them what it is. Because all Olds seemed to mean to most consumers was 'old,' the thinking was the sleek new products would speak for themselves when customers went to showrooms.
Heading into the 1989 model year, Olds and Burnett appeared as if they had gotten it right. Upon viewing the new work, dealers actually stood and cheered. But a funny thing happened as the ads started to appear in fall 1988. The new vehicles didn't. The dramatically designed Silhouette minivan, the Bravada sport utility and the Cutlass Supreme convertible were late getting to market. As the new advertising spurred showroom traffic, car buyers were greeted by salesmen polishing up Cutlass Cieras and Delta 88s, two models that looked to have been designed by Frigidaire.
In 1990, Michael Losh was moved over from the Pontiac division to succeed Lane at Olds. It was a bad situation for both client and agency. Losh had been aced out of the job he wanted as general manager of the larger Chevy division to take on the flagging Olds operation. Trained in finance and engineering and known to dislike the marketing side of the business, Losh saw himself as a contender to run GM one day. And Olds, where his biggest challenge was to get the marketing on track, had failure written all over it. The assignment would not enhance his rising star one bit.
Losh was no fan of the 'New Generation' campaign, killing half of the TV spots shot during his first year on the job. Perhaps the lowest point in the 'New Generation' line came in November 1990, in the form of an expensive special-effects commercial directed by Star Trek actor/director Leonard Nimoy, who appeared in the ad with his daughter Julie. The spot was pulled because Losh felt the effects, rather than the Silhouette minivan, were the star of the ad. (A revised version did eventually run.) Losh's pragmatic outlook on marketing led to the scrapping of the campaign in favor of 'The Power of Intelligent Engineering,' a theme GM execs say is grounded in Olds' history of spearheading new technology, like the Rocket 88 engine. Research also showed people would respond to the message. But both current and former Olds staffers say the campaign was drawn up largely to satisfy Losh's own tastes. 'That's what we did there . . . give the general managers what they were most likely to approve,' says one former Burnett executive. 'Just once I would have liked to hear them ask us to help solve their business problems, and get the chance to start with a clean sheet of paper.'
With Rock, who took over Olds when Losh became sales and marketing chief at GM's newly formed North American Operations, some agency will get the chance to start fresh. The wild card in the review, indeed in all of GM's marketing picture this year, is the presence of John Smale, the new chairman. Smale, having run Procter & Gamble, and having been a client of Burnett's, knows that if blame is to be placed on one side or the other for the lack of focus at Oldsmobile, it belongs more on the shoulders of the GM general managers and former sales and marketing managers than on Burnett. Although Smale is said not to have butted into the process yet, there are some who fear he could step in at the 11th hour like a judge putting aside a jury's verdict, if Olds chooses an agency that he feels does not have the necessary resources and talent.
Smale is as unlikely a player in the drama that has unfolded in Detroit over the last eight months as is Rock. After retiring as chairman of P&G in 1990, Smale spent his time lecturing at high schools and serving on the GM board, traditionally dominated by company men. But as GM's North American losses climbed dizzily - some $12 billion in red ink flowed in 1990 and 1991 - Smale amassed support from other outside directors to uproot the hierarchy.
Smale has more pure marketing training than anyone else on GM's payroll. But he will not find changing the culture at GM easy. Few executives have the slightest idea how to apply tried and true marketing know-how to the auto industry. One who attended a seminar Smale gave at GM a few years ago says Smale showed his naivete by trying to compare GM to P&G. Always quick to draw a parallel to his days at the soap maker, Smale said he couldn't understand why Oldsmobile was dropping the Toronado model, on which the company had no doubt spent more than $1 billion in developing and marketing over the years. 'Because the public is tired of it,' responded one GM staffer. Smale shot back, 'Tide has been around longer than the Toronado, and people don't get tired of it because we keep making it better.' For a company that only got around to creating a market research department seven years ago, such notions are difficult to absorb.
After conducting dozens of interviews with GM executives, Smale reviewed the fall '92 advertising for each GM division. His assessment: GM was spending too much money and media time promoting divisional names like Chevrolet and Cadillac and not enough on individual models like Cavalier and Seville. Executives who felt they had carried out specifically what Smale was complaining about were dumbfounded. At Chevrolet, for example, the new fall advertising was practically devoid of the kind of soft image advertising it used to turn out. At a meeting among Losh, Guarascio and other corporate staff and Chevrolet managers and staffers from agency Lintas: Campbell-Ewald, a shouting match reportedly erupted between Chevy general manager Jim Perkins 'and virtually everyone on the other side of the table,' recalls one participant. Losh and Shirley Young, corporate vp of consumer market development, were there to carry out Smale's instructions. The arguments ensued because Chevy's ads were almost entirely focused on models, warranty and service, although the division had only one real new model, the Geo Prizm.
Even with the bold moves made by Smale and new GM ceo John Smith, many observers doubt the automaker has really discovered marketing. They point to the naming of Losh to head up sales and marketing, despite what executives both inside and outside GM describe as his lack of interest for that part of the business. Still, Rock is determined to forge a new way of doing business between client and agency. He's ordered his entire staff, especially engineers, to start driving rival U.S. cars and Japanese imports, so they can learn more before they talk to agency execs and creatives. And when the final decision on the Olds account is made, Rock will have had equal input from Olds dealers and headquarters.
In the end, the anguish Burnett has gone through may prove beneficial, just as shock therapy once was used to straighten out confused patients. All Burnett can hope is that its new plan is given a serious, impartial hearing. Says one former GM exec, 'Burnett realizes two things: that it gave the past general managers the advertising they asked for, and thus is not to blame for Olds' woes by itself, and that it is well-equipped to help this new general manager fix what is broken.'
Copyright Adweek L.P. (1993)