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We don’t like to end this week on a downer, given all the well-earned praise and nostalgia for Lee Clow over the past couple of days.
But we would like to take a moment to note those affected by the round of layoffs that hit the Detroit-area industry this week and earlier in the month, especially since one reader said we hadn’t directly covered the news.
Adweek did report on two holding companies that had to cut jobs after GM made some changes to its marketing business, namely IPG and Dentsu. McCann went through a round of layoffs across several different agencies (MRM McCann, McCann Detroit and Commonwealth), and multiple Dentsu divisions including iProspect, Carat and the company’s Detroit office were also affected.
We’re told the Commonwealth downsizing was global and that the MRM layoffs didn’t only affect the General Motors team, so the entirety of this change cannot be attributed to General Motors’ own efforts to right-size its ship by cutting costs and attempting to build a more streamlined organization.
However, in the case of Dentsu the source seems more obvious, as GM recently moved the Chevrolet local media business to Martin Retail Group, a Birmingham agency affiliated with Leo Burnett. According to an employee who spoke to us on condition of anonymity, at least 55 jobs were affected across teams within the Detroit network due to cuts (some at the SVP and EVP levels) and turnover following the GM announcement.
General Motors, like most automakers, faces significant challenges in the current economic landscape. And analysis suggests that potential tariffs of up to 25 percent on imported cars and auto parts that are currently under consideration by the Trump administration could inspire retaliation by partners like Japan and the European Union, ultimately boosting car prices by hundreds or even thousands of dollars. Existing tariffs have already reduced the profit-sharing checks for workers at Ford plants.
The Washington Post also reported this week that a record number of Americans are at least three months behind on their car loans, which is a bad sign for that business and the economy overall.
One potential victim of these dual headwinds is automotive advertising, which is traditionally one of the largest sources of revenue for creative and media agencies alike.
As one employee at a major Detroit-area agency put it, “What is happening to the industry?”
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