GM asks agencies to cut fees by 20%

According to a report in the Wall Street Journal the automotive giant wants its agencies to cut costs this year and next. It could hit agencies across the board from advertising to digital.

General Motors reported a second quarter net loss of $15.5bn (£7.8bn), or an adjusted net loss of $6.3 billion after charges of $9.1 billion, on August 1 as its North American sales fell by 20%.

The owner of Cadillac and Chevrolet works with dozens of agencies around the country, including Publicis Groupe's Leo Burnett and Chemistri, which handle business including Cadillac and Pontiac as well as GM Service & Parts operations and several global GM operations.

Publicis Groupe's Starcom MediaVest also handles the $3bn-plus General Motors media account.

GM also works with other agencies including Interpublic Group's McCann Erickson and Campbell-Ewald.

According to the report GM says the cuts could amount to more than $20m and mean job losses at the agencies involved.

It follows GM's decision not to go ahead with a deal to advertise during ABC's broadcast of the Emmy awards next month.

Last month Brand Republic reported that General Motors was to reduce its marketing spend, as part of a radical response to a drop in US sales, including job cuts and asset sales.

The details of that plan centred on GM's US business and included a plan to suspend dividend payments and seek to cut 20% of its salaried staff costs.

A possible disposal of its gas guzzling Hummer division was also mooted.

This article was first published on brandrepublic.com