People familiar with Joel Ewanick‘s ouster from General Motors as its chief marketer say there was conflict with CEO Dan Akerson weeks before Ewanick’s dismissal for not properly reporting the full cost of a soccer sponsorship deal in Europe.
Joel Ewanick
Ewanick is reported to have only disclosed less than a mere third of the $559-million deal with the English soccer team Manchester United.
Akerson had chastised Ewanick by forcing him to carry a so-called “Farley Award,” named for Ford Motor Co. marketing chief Jim Farley, over Ewanick’s public profanity during a June conference in Cannes, France, said the people, who asked not to be identified because the details are private.
GM’s CEO would no longer protect his marketing head after a whistle-blower stepped forward and the Detroit-based company determined Ewanick was spreading the price of the agreement with Manchester United among several different marketing budgets to avoid his boss’s spending limits, the people said. When confronted, Ewanick denied it, they said.
There’s no evidence that Ewanick profited personally from the transaction said two of the people, while another said the investigation continues. The ouster of a key lieutenant he was mentoring reflects the steep challenges facing Akerson as he tries to change the culture of the country’s largest carmaker.
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“Whether you liked Joel or not, he brought a significant amount of experience both on the brand side as well as the agency side, and he had a lot of very influential relationships,” Mike Jackson, a former VP-marketing at GM, who left the automaker in 2007, said yesterday in a telephone interview. “It’s a huge setback.”
Setback for Akerson
The departure of the former Hyundai Motor Co. and Nissan Motor Co. marketer is also a personal setback for Akerson. The CEO supported the executive’s risk-taking spirit to shake up GM’s staid marketing culture, promoting him to run global marketing in December 2010. Akerson has made a priority of emphasizing the Chevrolet and Cadillac brands worldwide, especially in China, where GM is expanding.
“I know a lot of the public views this as a personality-driven industry,” Akerson told analysts last week when asked about Ewanick’s departure. “It’s a team effort and what you saw manifest in the marketplace was a thought-out strategy that was agreed upon as a team.”
Tom Henderson, a GM spokesman, declined to comment on the former marketing chief. Ewanick told GM that the structure of the Manchester United deal wasn’t out of ordinary for large contracts, a person familiar with the discussion said. GM’s investigators saw it differently after days of probing inconsistencies in Ewanick’s account, people said.
Ewanick’s sentencing to carry the Farley award, a mock-up of Ford’s blue oval logo that has “Farley” instead of “Ford” in the center, was proof Akerson was taking steps to help his marketing chief learn his limits, one of the people said.
Akerson, 63, a former U.S. Navy officer, enforced the parody award as a way to remind senior executives to maintain professionalism in private and in public, people familiar with the details said. Farley, who came to Ford from Toyota Motor Corp., was quoted saying “f— GM” in “Once Upon a Car,” the 2011 book about the U.S. auto bailout by New York Times reporter Bill Vlasic.
Details of the Man U Deal
Ewanick’s last GM deal will generate a total of $559 million through 2021 for Manchester United, the soccer team said Aug. 3 in a regulatory filing. The agreement, the largest in the history of soccer, was formally announced July 30, the day after GM said in an e-mailed statement Ewanick failed to “meet the company’s expectations of an employee.” Elements were renegotiated after Ewanick’s actions were uncovered, people familiar with those details said.
The agreement includes about $18.6 million this year and next before rising to about $70 million for the season beginning in 2014. GM’s payments increase by 2.1% each season after that, according to the filing.
Rebecca Lindland, an industry analyst with IHS Automotive, said she informally chatted with Ewanick in recent weeks and didn’t sense trouble was brewing.
“He was excited to be working for the company,” Lindland said. “I certainly didn’t pick up on any hint whatsoever of any kind of discord from him.”
The end to Ewanick’s 27-month run at the largest U.S. carmaker contrasted with the attitude after GM snatched him from Nissan in May 2010. The Detroit automaker was then less than a year out of bankruptcy and facing pressure to show it was trying new initiatives.
Before his less than two months at Nissan, he was with Hyundai as VP- marketing for the U.S. sales division from 2007. It was there where he created his most memorable campaign, the “Hyundai Assurance” program that allowed buyers who lost their jobs to walk away from their finance contracts, an appealing pitch during the recession.
Ewanick joined GM during a time of management upheaval. Then-CEO Ed Whitacre had ousted or reassigned more than 30 managers, mostly in sales and marketing. Whitacre had recently approved ending a 91-year relationship with Campbell Ewald for Chevrolet advertising and moving it to Publicis Groupe SA.
Five days after he took the GM job, Ewanick moved GM’s Chevrolet business from Publicis to Goodby Silverstein & Partners, an agency he had used at Hyundai. He then agreed to a plan to shelve slogans such as “American Revolution” in favor of a new campaign, “Chevy Runs Deep,” in time for the Oct. 27 start of Major League Baseball’s World Series.
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