Because America has this strange thing called Chapter Eleven, which is a form of bankruptcy that allows companies to stay in business, even after they have reached a stage were they can no longer pay their creditors, there are quite a few agencies over here looking at a dire situation involving many millions of dollars being owed to them that they may never collect from auto companies, General Motors and Chrysler.
It would seem that Publicis and Interpublic are the two with the most to lose. It is possible they may get paid, but it will very likely only be cents on the dollar. Reminds me of the dot.com implosion in the late nineties, when many BDA’s, who should have known better, were left holding the bag for millions in media buys. Usually for three million dollar Super Bowl spots.
But, in the mysterious way the wheels turn within the advertising industry since the bean counters of the holding companies took over… There is no doubt, after this fiasco, senior management at Publicis and Interpublic will reward themselves with raises and “performance bonuses” for yet another job well done.
Hi George,
It's a debatable one.
When Saatchi & Saatchi refinanced itself to the tune of £6-700m it was one of the greatest business coups of the industry. It saved thousands of people from the dole queue and millions in unpaid unemployment benefit to taxpayers.
There is nothing wrong in getting bonuses for saving jobs or businesses.
The problem arises when people do not face up to their responsibilities and run away burying their heads in the sand crying: 'It' won't happen to us'.
The answer to that is: 'Yes it can'.
GM's problem was the inability to act and implement actions 5 or 10 years ago. What is even more frightening is the reluctance for some companies to act even now. It's a bit like a surfer at the base of a 60 foot wave: singing to himself, kidding himself: 'that wave ain't gonna fall on me because it never has done before'. Hmmm....then...Tsunami. That's what has happened at GM, and it has been well documented in the press over several years.
Overmanagement creating the inability to act. A friend of mine used to work on the production line as an electrician at Ford Dagenham. If the line stopped, there would be mayhem. 20 managers would appear from nowhere shouting and screaming at each other while two electricians struggled to solve the problem. I ask myself how much is the cost of management for companies sake?
The NHS is the same, crippled by over-management - there's a lack of clear direction and too few people on the shop floor to actually do the work. The net result is catastrophic failure. Apply the rule and approach to any organisation and the end result is the same. Look at the number of bureaucrats and politicians stragnling the UK.
Kevin...
Dead right. But it's the same in all businesses. This weeks news that Sir Martin will get a $100 million bonus in five years "If WPP outperforms the other holding companies." Is accompanied by statements talking about reduced staffing etc. You know that to meet the targets, if all else fails, massive layoffs should turn the trick.
Cheers/George
Well, I can see what you're saying. However, with Martin Sorrell he's telling us what he is doing, and he's telling everyone, including his staff, the situation as it is.
That has to be admired. I'm sure there are other companies out there who are doing the same and not telling their staff. How does that make you feel? If I was a WPP staff member, I may not be happy about it, but at least I would know the boss was being totally honest with me, and that goes a long long way to keeping staff.
$100m in 5 years is a lot of money to most people, but what is it to a man like Martin Sorrell? It's an incentive to do well, and if he does well, everyone else does well. As for the redundancies, nobody likes to make anyone redundant, but what has to be remembered is it's the jobs that are becoming redundant, not the people. Martin Sorrell didn't cause the Credit Crunch. I dread to think how much work is involved to gain $100m in 5 years. It takes its toll. Look at any photo of any Prime Minister or President at the beginning of an elected term, then look at a photo of them at the end of that term. There is always a considerable difference. That's the price they pay.
It can be very frustrating being made redundant. I know, I'm in that space right now. At the same time it can be very rewarding. I call it my reality check, where I can get in touch with real people who aren't living in an "Advertising dreamworld" (and I don't mean you George). It's a bit of time out where I can recharge my batteries, do a meaningless job and remind myself of what people's lives are really all about. THEN, when I get back into the business, I can touch their hearts and minds like no other because I know where they are coming from, I have walked a mile in their shoes. I'm no longer detatched. I feel what they feel, and that to me is what great advertising is all about. Advertising that sells, makes money, prospers, and creates jobs.
George Parker
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