Posted Jul 30th 2012 6:00PM
With General Motors Global Marketing Chief Joel Ewanick shown the door on Sunday, a culture of constant change continues to grip GM's marketing function, leaving some to wonder if the automaker will ever match a compelling message to the vastly improved product hitting dealerships.
Ewanick and GM top brass have clashed in recent months over some of the marketing chief's moves and style, even as the company empowered the former Hyundai marketing chief to overhaul the Detroit automaker's creative and media-buying relationships, putting new shops in charge of handling GM's vast US$3 billion media budget.
Ewanick's departure was not friendly, say GM insiders. "I can tell you that he failed to meet the expectations the company has for its employees," said GM spokesman Greg Martin. That is a highly unusual comment from a corporate spokesman.
"It has been a privilege and honor to work with the GM team and to be a small part of Detroit's turnaround. I wish everyone at GM all the best."
- Joel Ewanick
GM sources are saying Monday that a key to Ewanick's downfall was the way he handled recent big-money sponsorship deals with British soccer clubs Manchester United and Liverpool Football Club on behalf of Chevrolet. The deals, according to insiders, were not properly vetted inside GM's processes. The term "serious breaches" are being thrown around GM today.
Ewanick Tweeted a short comment on Sunday: "It has been a privilege and honor to work with the GM team and to be a small part of Detroit's turnaround. I wish everyone at GM all the best."
"It's odd the way this whole thing has gone," said one GM insider who asked not to be identified. "They let the guy completely overhaul the structure of the place, and then show him the door?" The same executive speculated, "So, now someone else will come in and probably want to do things his or her way, and then we will have more change and upheaval instead of doing what we need to do, which is hunker down and build these brands up in a coherent way so we can get off the tax-payer's back." The executive was referring to the the 26% government ownership of GM following the 2009 rescue of the company.
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Market Share Decline
GM is in the spotlight and has had a disappointing performance this year, an election year in which the value of the American tax-payer-funded bailout in 2009 is being hotly debated.
GM has lost market share this year, posting a 4% sales gain through six months in an overall U.S. market that's up 15%.
GM's worldwide sales rose 2.9% to 4.67 million units in the first half of the year. Rival Toyota Motor Corp., meanwhile, posted a 34% gain to 4.97 million, a number that is somewhat skewed because it reflects Toyota's increased production following last year's earthquake, which caused the automakers to lose hundreds of thousands of sales due to damaged factories. The recovery puts Toyota well on track to reclaim the global sales title from GM.
More troubling, though, is that GM has lost market share in the U.S. this year, posting a 4% sales gain through six months in an overall U.S. market that's up 15%.
"GM's decline in market share likely played a part in the departure of Ewanick, who helped Hyundai gain market share in America with its creative marketing," said Larry Dominique, Executive Vice President of TrueCar.com, and, as a former Nissan product planner, worked briefly with Ewanick at the Japanese car company. "GM has introduced some impressive vehicles in the past few years, yet because of so much competition in the marketplace, GM's marketing and advertising really didn't help separate itself from other automakers."
Indeed, the two brand campaigns that Ewanick's arrival most impacted – Chevy and Cadillac – have not gone smoothly. The "Chevy Runs Deep" campaign that began in late 2010 has been bumpy and uneven, at times playing to a pastiche of Chevy's heritage, and other times trying to capitalize on movie placements like The Transformers. Cadillac's advertising has only very recently found its track, with an energetic new campaign for the ATS, after two years of floundering for an idea.
Ewanick's hiring in 2010 was full of odd drama. He had been courted by GM while still at Hyundai, but instead went to head marketing at Nissan's U.S. unit. He was there for barely six weeks, Ewanick told AOL Autos in a previous interview, "When I realized how little control I had over key decisions and key issues that I felt would be key to growing the business and the brand." One such decision, Ewanick cited, was that marketing for the Nissan Leaf in the U.S., the company's electric car, was being controlled from Tokyo.
Ewanick arrived with a flurry of moves that rocked GM's culture.
GM continued to ring Ewanick's phone, and he relented, especially to overtures by GM President Mark Reuss.
Ewanick, now 52, arrived with a flurry of moves that rocked GM's culture. Without benefit of a typical review of ad agencies, he almost immediately fired Chevy ad agency Campbell-Ewald, which had handled GM's most important brand since Warren Harding occupied the White House. He awarded the account to his former Hyundai ad shop Goodby, Silverstein and Partners out of San Francisco. He then fired ad agency BBH in New York, hired just months earlier, and hired Fallon Worldwide out of Minneapolis, an agency he had worked with years earlier when he was at Porsche North America.
Besides those two moves, Ewanick, who made his reputation at Hyundai, recently consolidated all of Chevy's worldwide advertising in a newly formed agency, Commonwealth of Detroit, which teamed parts of two major advertising holding companies – Omnicom, parent company of Goodby Silverstein, and Interpublic Group of Companies.
Ewanick has been known for guiding a lot of high-profile marketing initiatives and strategies, both at GM and Hyundai before his tenure in Detroit. He has spent big during the Super Bowl in past years with both companies, and while at Hyundai spent big during the 2008 election news events and coverage. "I want the brand (Hyundai at the time) to be as close to the national conversation of the moment as possible," he said at the time. He scored huge ad buys for Hyundai including the first ad on CNN to be shown out of President Obama's acceptance speech in Chicago's Lincoln Park on election night 2008, and the first ad on NBC coming out of Michael Phelps' eighth gold medal in the 2008 Olympics.
He pulled GM's Facebook advertising on the eve of the social network's IPO.
But this year, bristling over jacked up ad rates for the NFL championship game, he said he would sit it out, aiming, some GM insiders said, to try and force Super Bowl ad rates down. He also pulled GM's Facebook advertising on the eve of the social network's initial public offering, casting a shadow on Facebook's stock, a move that was deeply unpopular with GM CEO Dan Akerson.
It should be noted that Akerson did not hire Ewanick. His predecessor, Ed Whittaker Jr., hired the CMO from Nissan. Akerson has indicated that he will not serve as GM CEO much longer, though he may stay on as chairman of the board. One of the front-runners to be the next CEO, vice chairman Stephen Girsky, who is gaining power in the company as interim President of GM Europe, is not believed to be a big Ewanick supporter, which did not work to the marketing executive's favor. Girsky, say GM insiders, was especially angry about Ewanick's British soccer deals at a time when he has been helping to negotiate cutbacks and cost cutting in Europe with labor unions.
CMOs Have Short Lives
Ewanick's short tenure is not uncommon for chief marketing officers. The average stay is 35 months, according to executive recruiting firm Spencer Stuart.
Ewanick's tenure was below average, but his high profile in the industry, and the frequency with which these jobs become open suggests he will not be unemployed for long.
The frequency with which these jobs become open suggests he will not be unemployed for long.
The other executive who will be closely watched after Ewanick's departure is vice president of marketing Chris Perry. Perry was brought to GM from Hyundai by Ewanick.
Ewanick is being immediately replaced on an interim basis by Alan Batey, a British executive who was promoted by GM in 2010 to handle North American sales for Chevy after nearly two decades of global experience in the car sector. Batey was recently promoted to a newly created role of vice president, U.S. Sales and Service, the top sales executive in the U.S., reporting to Mark Reuss, North America president.