LOS ANGELES Mitsubishi Motors said it has named Rich Gilligan chief executive officer. Gilligan, who formerly helmed the company's manufacturing division, succeeds Finbarr O'Neill, who resigned today to take the president and CEO post at Reynolds and Reynolds Co., an automotive consulting and services firm.
The executive turnover injects added confusion into an ongoing ad account review process the client said would continue as planned, despite calls from at least three members of its dealer councils to halt the competition. [Adweek Online, Jan. 3].
O'Neill was expected to lead the review of Mitsubishi's $200 million account, with proposal requests due back tomorrow to search consultants Select Resources International in Santa Monica, Calif.
A source said Kazuyuki Kikuchi, who was named Mitsubishi's executive officer in charge of North America last June, will likely preside over the review, should it progress on schedule.
Select Resources said in response to today's events that the review would continue as planned.
"I'm surprised and totally disappointed at the same time," said Chuck Barber, Barber Bros. Mitsubishi, Orem, Utah, chairman of Mitsubishi's National Advisory Board, who has been appointed to the review team. "I had a lot of communication with [O'Neill] and think he is an honest, straightforward, tremendous guy and had the ability to turn this thing around. I will miss him."
The moves follow the resignations of svp of marketing Ian Beavis in November and director of advertising Diane Hong in December. Kevin Mayer was named to succeed Hong [Adweek Online, Dec. 16], and Beavis's successor has not yet been appointed.
It is unclear if Mitsubishi's creative incumbent, Interpublic's Deutsch/LA, will defend the business in a review, and that is the overriding reason some dealers want the process scuttled, sources said. Executives at Deutsch, Marina del Rey, declined comment.
A letter-writing campaign began just before Christmas, when dealer and council member Joe Mitchell declined to represent the National Advisory Board during the review.
Sources said the account is worth about $200 million, a drop of more than $60 million over the past year [Adweek, Dec. 13].
A Mitsubishi representative yesterday said chemistry checks with undisclosed shops begin the week of Jan. 17. The rep said Mitsubishi corporate has received letters from dealers both denouncing and defending the review, but did not elaborate.
Sources said Mitchell is against the review owing mainly to concerns about its timing. He argued that a review was unfairly laying the blame on Deutsch for problems an agency change could not solve, sources said.
In the letter, he pointed to several factors, including Mitsubishi spending 40 percent under its stated ad budget, frequently changing marketing messages and a questionable media buy to underscore his position, sources said.
Mitchell declined to comment on the letter's content.
Last week, Mitchell's opinion was echoed in separate responses from two other council members, Dallas-area dealer Don Herring and Minnesota dealer Ted Terp, who was appointed by the national Retail Marketing Council to represent the RMC during the agency review. (There are 20 council members overall.)
Sources said Herring's letter, the contents of which were made available to Adweek, encouraged O'Neill and other council members to reconsider their decision to hold the review. Herring wrote that "holding an agency review is an invalid conclusion" to the problems Mitsubishi faces, a source said. Terp's letter suggested extending Deutsch's contract for a year, to re-evaluate the effectiveness of the advertising, then reconsider the creative review at that time, according to a source.
Herring did not return phone calls; Terp declined to comment. Deutsch declined to comment on the situation.
Sources attributed the remorse besetting council members to three factors: Deutsch's ambivalence about defending the business in a review, which shook many councilmen into a realization that they might be forced to change agencies just months before the Eclipse launch in June; the Dec. 14 announcement by MMC Tokyo that it would delay its Revitalization Action Plan, due in mid-December, until the end of January, leaving the factory's strategy for North America up in the air; and a feeling among several council members that Mitsubishi had forced the review because requests by dealers to restore fast diminishing ad dollars—dealers have asked for $70 million to $100 million more—would not be forthcoming without an agency change.
Sources acknowledged, however, that the original vote by show of hands was overwhelmingly in favor of a review and that the implicit ultimatum on additional marketing dollars by svp of corporate planning Hiroshi Taguchi, in which the Endeavor launch was explicitly criticized, did not precede the vote but came after it.
Other dealers said the review should continue on schedule. "Lack of money for marketing was designated as our biggest problem, period," said one dealer. "But a lot of us thought a review was a good idea to put Deutsch's feet to the fire. It's like the seven-year itch. You don't want to leave your wife, but you're looking around."
The dealers, however, were unclear about their ultimate influence on Mitsubishi's decision going forward. "If there is a groundswell against a review, it might be canceled," one said. "In the past, even after Fin [O'Neill] came in, they made decisions without our knowledge. But in the last six months there has been a spirit of cooperation."
Another said the subject would likely be discussed in an unscheduled meeting next week, at least briefly, during the press days preceding the Detroit Auto Show Jan. 15, called by Osamu Masuko, managing director of Mitsubishi's overseas business operations division in Tokyo.
Masuko's letter to board members was principally intended to allay concerns over press reports that Mitsubishi was not committed to the North American market, a source said. But Masuko added in his letter, regarding his upcoming trip to Detroit, "At that time, I have the opportunity to meet with the members of the NAB and learn more about specific dealer concerns and needs for the North American market ... MMC is making its best efforts to revitalize the North American market as it is the key to the success of MMC's revitalization."
"I don't know how many minutes will be devoted to it, but I have no doubt in my mind that the subject of the review will come up," said one dealer on the NAB. "In fact, it is inevitable."
This story updates an item posted earlier today with news of Gilligan's appointment and reaction to the executive change.