Former GM marketing czar Joel Ewanick, shown with the Chevrolet Volt.
General Motors’ controversial marketing czar Joel Ewanick was brought down by a whistle-blower who revealed that the executive was trying to hide the true cost of a deal with the British soccer team Manchester United, according to a new report.
A one-time Hyundai exec who was brought in to shake up GM’s staid marketing system, Ewanick was a top lieutenant to the Detroit maker’s CEO Dan Akerson. But the chief executive began the process of firing Ewanick for reasons the maker has yet to reveal.
Intense, last-minute negotiations allowed the marketing chief to save face by claiming to have “voluntarily” resigned, on July 29th, but insiders quickly began to suggest that something more serious than just a poor showing in sales had led to his departure.
Until now, the closest the maker has come to providing an explanation came from a senior spokesman who suggested Ewanick, “failed to meet the expectations the company has of its employees.”
According to a new report by the Bloomberg News Service, the problem was the cost of the huge deal GM inked with Manchester United, arguably the world’s most popular soccer – or to Europeans, futbol – team. Ewanick, the report suggests, attempted to hide about a third of the $559 million price tag by spreading it out over several different marketing budgets.
When the real figure was revealed to Akerson – exceeding the limits the CEO had approved for such deals – he confronted Ewanick who tried to deny he had violated corporate rules. As the truth came out, Akerson was forced to demand Ewanick’s firing.
It was a difficult situation for Akerson who has attempted to dramatically change the corporate culture since assuming the helm at GM less than a year after its emergence from Chapter 11 in July 2008 – he had been serving on the maker’s board prior to that.
Following GM’s bailout virtually every senior manager was replaced and Ewanick was brought in to the company in May 2010 to serve, as Akerson later suggested, as a “glass-breaker,” someone ready to end old and comfortable alliances and abandon seemingly safe, if ineffective marketing strategies.
He quickly lived up to expectations, severing ties with nearly 70 global ad agencies, including long-time Chevrolet agency Campbell-Ewald. But Ewanick also proved something of a loose cannon. He announced GM would stop advertising on Facebook, saying it delivered little value for the money just before the social media site’s closely watched IPO.
Ewanick also took criticism for his aggressive behavior within GM, at one point being given a mock trophy GM labeled the “Farley Award.” It was named after Ewanick’s counterpart at Ford, Jim Farley, who had been widely quoted dropping the “f-bomb” in referring to the General Motors bailout.
Akerson had hoped to temper Ewanick’s behavior while continuing to encourage him to press the limits in terms of negotiating deals that could get GM’s message out. But, in the end, it appears Ewanick pushed a little too far beyond those boundaries and didn’t come clean when confronted with the details, according to Bloomberg.
Ironically, the day after Ewanick’s departure, GM announced some revisions to the Manchester United deal. Industry watchers had questioned the original package, suggesting it was substantially over-priced, especially as GM was not going to get placement on the team’s jerseys – which would have guaranteed extensive television exposure for its Chevrolet brand. On July 30, the maker revealed new details that showed it replacing former jersey sponsor Aon.
The ouster of Ewanick puts the spotlight on GM and, in particular, Akerson, especially considering the maker’s many other problems. It last week reported a decline in July sales followed by a sharp downturn in second-quarter earnings — that largely due to problems in Europe. But there remain a number of unanswered questions about the marketing chief’s departure, even with the latest reports.
But despite widespread rumors — some likely spread by those burned by Ewanick during his high-profile tenure — it does not appear that he attempted to make any personal gains from the Manchester United deal.
The 52-year-old Ewanick spent just 27 months at GM but in a news conference last week his interim successor Alan Batey stressed that “There is no change in direction. There’s no change in priorities.” For now, at least, Ewanick’s key moves will remain in place.