This story has been updated with more details on the apparent reasons for Joel Ewanick’s departure from General Motors.
Was it simply a matter of weak advertising and declining market share or was there something more sinister that sank Joel Ewanick, General Motors’ hard-charging global marketing czar?
In an unusual and unexpected move, GM issued a terse release announcing that the 52-year-old Ewanick would “voluntarily” resign from the post he took in May 2010 promising to be an agent of change shaking up the automaker’s traditionally staid approach to marketing. In his two years on the job, Ewanick showed no mercy, abandoning long-time GM ad agencies and walking away from traditional marketing alliances but while there may be many who now are feeling a sense of schadenfreude, or joy at his misfortune, the big question is what happened.
GM’s initial statement offered little to no clues and the automotive and marketing worlds were abuzz with questions related to the efficacy of the actions Ewanick has taken during his tenure, such as dropping long-time Chevrolet ad agency Campbell-Ewald, pulling GM out of the Super Bowl ad sweepstakes and aborting its ad deal with Facebook. But, a day after the news of his departure began leaking out, there are hints appearing of something more serious.
Insiders now suggest that Ewanick ran afoul of GM policy in terms of handling the finances of a massive partnership the maker recently negotiated with European soccer super-team Manchester United.
“He failed to meet the expectations the company has of its employees,” stated senior GM spokesman Greg Martin, declining to discuss specifics.
Two other GM sources, asking not to be identified by name because they were not approved spokespersons, used the same term, “serious breaches” to describe the issues that led to Ewanick’s departure. But it does not appear that there are further legal problems facing either the automaker or Ewanick, which suggests the issue may be more about not following strict policies as opposed to any attempt at self-enrichment.
GM initially considered describing the executive’s ouster as a non-voluntary termination but chose to go with the more benign description, dubbing it a “voluntary…resignation,” after extensive negotiations likely to have involved legal teams for both GM and Ewanick.
(Check out TheDetroitBureau.com’s initial report on Ewanick’s ouster. Click Here.)
If, indeed, there was an ethical breach what might it have involved? At this point, no one inside the company is saying and Ewanick isn’t taking calls from the media, though he has sent e-mails out to friends admitting he was hurt by the firing. He also posted a Tweet stating, “It has been a privilege & 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.”
The spotlight appears to be focusing on a high-profile partnership Chevrolet announced in late May, the sponsorship of the wildly popular Manchester United soccer team – which was soon after followed by a second deal with the Liverpool Football Club.
A report in the Wall Street Journal contends that Ewanick failed “to properly vet the financial details of a European soccer-sponsorship deal that he struck recently.”
The deal was announced just weeks after GM – which spends an estimated $4 billion annually on marketing – decided to pull out of the Super Bowl because of the steady rise in the televised extravaganza’s advertising rates.
While specific figures haven’t been released the soccer – football to Europeans – deals were reportedly astronomical, though Ewanick defended them by noting that even a typical Manchester United game drew TV audiences rivaling the Super Bowl.
But the deals were announced just as GM was recognizing it would likely lose several billion dollars in Europe this year as the Continental car market collapses and the maker’s Opel brand struggles for survival. The soccer tie-up apparently didn’t sit well either with GM Chairman and CEO Dan Akerson or Vice Chairman Steve Girsky, the former Wall Street analyst now overseeing day-to-day operations in Europe.
Girsky, in particular, appears to have been furious considering he is faced with having to make major cuts in Europe to try to save the faltering operations.
That appears to mean a very rapid falling from favor. Only two weeks before the marketing chief’s ouster CEO Akerson described Ewanick as being “full of energy and vim and vigor,” and describing the 52-year-old as a “glass-breaker” who was “doing a good job.”
Could Ewanick have fouled things up simply by not following the rules on the Manchester United deal? Barring an action that pushes into the criminal category – which clearly does not appear to be the case, insiders assured TheDetroitBureau.com – “Things don’t happen for just one reason at GM,” stressed a former top-floor executive. It usually takes a series of missteps for someone of Ewanick’s stature to be forced out.
Several sources indicated that Ewanick has simply tried to move too quickly at a company that has traditionally prized stability – despite statements to the contrary from the likes of CEO Akerson. And, in the process, he may have run afoul of the old boys network, suggested Marty Bernstein, a long-time ad industry insider and columnist for TheDetroitBureau.com.
It apparently did not help that news of GM’s decision on Facebook advertising made the headlines just days before the social media site’s highly promoted IPO, a stock sale that has, in hindsight, become one of the year’s biggest disasters. Ewanick’s decision underscored questions about Facebook’s long-term business model. It has also triggered direct communications between top FB executives and GM CEO Akerson.
While such moves were either hailed or derided as the signs of dramatic change there have been far fewer kudos for the advertising that has emerged from GM over the last two years. According to columnist Bernstein, “dealers hate” the Chevrolet one-price ads running in the Olympics because “they make them look sleazy.” Ads for the new Cadillac ATS, showing a couple of young men racing the car in exotic locales, haven’t scored much better.
Of course, critics aren’t the ones that matter. But the new advertising has had, at best, mixed results in the market place. Some new GM products have done spectacularly, notably including the newly updated Chevy Malibu, which came within a whisker of out-selling the vaunted Toyota Camry in June. Overall, though, GM has failed to keep up with the pace of the overall U.S. automotive market’s 2012 recovery.
“GM’s decline in market share likely played a part in the departure of Ewanick, who helped Hyundai gain market share in the U.S. with its creative marketing,” said Larry Dominique, Executive Vice President of TrueCar.com, referring to Ewanick’s earlier job as Hyundai Motor America marketing chief. “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.”
What really sank Ewanick? GM, like most automakers, doesn’t keep a secret very well, and more details are likely to leak out in the coming days. But the odds appear to favor a series of missteps and one major slip on the corporate banana peel bringing the global marketing czar down.