Motor City Merger: Chrysler Engineers Bozell Buyout of CME-KHBB/Detroit By David Kile

SOUTHFIELD, MICH. - 'Now we can stop worrying about how Bozell is going to try and outmaneuver us.' Those were the words of one

Indeed, Chrysler executives last week did what some had feared, some had anticipated for the last two years: engineering the elimination of one its creative agencies by sparking CME to sell out its Detroit office that serves the company’s Jeep-Eagle division to Bozell, which handles Chrysler-Plymouth and is the car company’s lead worldwide agency. Short-term, Chrysler will receive an undisclosed break on compensation from Bozell, as well as longer-term savings as the combined operation shrinks, and costs are reduced.
Bozell also gets CME’s non-Chrysler business in Detroit, including Hush Puppy Shoes, Consumer Power Company and assorted probono work.
The Jeep-Eagle group will be kept separate from Bozell’s Chrysler-Plymouth group, possibly continuing to be housed separately. CME-KHBB/Detroit chief executive officer Mike Vogel, who will run the group and report to Bozell Worldwide chairman David Bell, is heading the transition team.
The stage for the consolidation was set last summer when Chrysler consolidated its media buying at BBDO. CME had competed for it along with Bozell, but was eliminated so early as to make agency executives wonder whether CME’s days on the roster were numbered. Additionally, Chrysler has been consolidating Chrysler-Plymouth dealers with Jeep-Eagle dealers wherever it can, further facilitating the elimination of an agency.
The fact that Chrysler executives have vehemently denied they were planning to eliminate an agency led some insiders last week to question whether the company has been equally forthcoming in denying they are readying to eliminate either the Plymouth or Eagle brands as part of its Project 2000 study.
Chrysler executive vp/sales and marketing Ted Cunningham said staff reduction in the new combined entity would be achieved through attrition, not immediate layoffs. There are a total of over 500 people at the two agencies.
Cunningham said during the planning of the deal he had been concerned about protecting CME’s culture, which has produced some of Chrysler’s best creative.
Copyright Adweek L.P. (1993)