Chicago-headquartered True North Communications bid farewell overnight to around nine percent of its revenue base with the loss of the estimated $1.5 billion advertising account of Chrysler US – the Stateside arm of the German-American DaimlerChrysler group.
The decision to switch the business to Omnicom's BBDO Worldwide New York office was announced on Friday. BBDO will create a dedicated new unit to handle the business, PentaMark Worldwide, on whose board will sit a Chrysler representative – an unusual, even unique, situation.
The loss of the Chrysler business – its largest account – is a severe setback for True North and its operating subsidiary FCB Worldwide, both of which are now highly vulnerable to takeover, according to Mike Russell, an equity analyst at Morgan Stanley Dean Witter: "Not having an auto account can mean that mergers are easier," he opined.
Previously, the Chrysler US business had been shared between the rival networks. But two months back, both were invited to pitch for the consolidated US account, which includes the Jeep, Chrysler and Dodge marques.
Chrysler believes the account change will effect "significant efficiencies in consolidated costs related to overhead, production, media buying, human resources and other back office functions".
News source: Financial Times