L’Affaire Renault reaches a suicidal nadir

October 12, 2012

Ah, the cynicism of the modern corporation. Remember all those years ago when Jo Moore, spin doctor to Stephen Byers, Department of Transport, Local Government and Regions secretary, emailed her boss those immortal words, referring to 9/11: “It’s now a very good day to get out anything we want to bury.”?

Well, now the French are having a similar moment of national revulsion at what’s called “L’Affaire Renault”. Readers of this blog will recall my post detailing Publicis Groupe CEO Maurice Lévy’s grubby attempt – successful at first – to stitch up Renault director of customer marketing Philippe Clogenson when the latter had the temerity to consider placing his business outside the Publicis empire. Clogenson was one of four senior Renault executives summarily fired (Clogenson for corruption, the other three for alleged industrial espionage) at the beginning of 2011 – only to be rehabilitated in the most humiliating way possible for Renault boss Carlos Ghosn and his number two, who subsequently had to resign.

And, guess what? The judicial investigation into the Renault scandal, now consuming many hours of M. Ghosn’s time, has turned up a new shocker. According to verified documents published in Le Parisien today, the car manufacturer had prepared draft statements for release in the eventuality that any of the executives attempted or committed suicide. The draft document, prepared by then director of communications Frédérique Le Grèves, read, “The entire company is profoundly shaken by the seriousness of this act. Our thoughts are with the family of M. XXX.” Fill in, as appropriate.

Contacted by Le Parisien, Le Grèves – now Ghosn’s chief of staff – managed to dig herself into a still deeper hole by insisting that the draft communiqué was “pure and simple anticipation, just a form of words in case we needed to respond to journalists.” The rehabilitated executives must have been delighted with that touch. But the broader point, which seems to have escaped Renault’s senior management, is the French public is aghast at the cynicism of it all. Le Grèves simply can’t understand what all the hullabaloo is about. I wonder how much longer she will remain Le Ghosn’s chief of staff.

The examining magistrate, Hervé Robert, took up half a day of Ghosn’s valuable time during his last hearing – and has threatened a 10-hour marathon during his next. I’m sure Lévy can barely wait for the judge’s attention to be turned to himself.

Lévy accused of falsely denouncing ‘corrupt’ Renault marketing executive

August 25, 2012

In a new twist to an old corruption scandal that engulfed Renault two years ago, Maurice Lévy, head of Publicis Groupe, has been accused of bringing about the unfair dismissal of a senior marketing executive at the French car company.

To recap, three senior Renault executives were dismissed at the beginning of 2011 after they were accused – falsely it later turned out – of passing top-secret electric-car technology to the Chinese. At the same time Philippe Clogenson, director of customer marketing, was fired after he was found to have accepted corrupt payment from a supplier.

Later, Renault boss Carlos Ghosn was forced into an embarrassing climbdown and his second-in-command resigned after it emerged the allegations that had brought down all four executives were false.

Clogenson was subsequently reinstated and compensated for wrongful dismissal (as were the other three executives).

It now emerges that the man who accused him was none other than Lévy himself. That at least is the substance of a witness statement from Marc Tixador, a former policeman now himself the subject of an investigation, who was hired by Renault to conduct an internal inquiry into the allegations.

According to Tixador: “In May 2009, we were put onto the Philippe Clogenson case by his direct superior, Stephen Norman. He, in turn, had been tipped off by M.Lévy, boss of Publicis, that a Renault employee whose first name was “Philippe” and who, more specifically, was in charge of marketing, had been taking bribes from certain suppliers. Our internal inquiry and discussions with Publicis enabled us to establish that the suspect must have been Philippe Clogenson.”

Lévy has been quick to play down his own role. While not denying Tixador’s statement, he had this to tell the French national newspaper Libération: “Some information came my way, but no surname was mentioned. I purely and simply passed that information to Renault, with infinite precaution. I didn’t denounce M. Clogenson or anyone else. I didn’t know the surname and I didn’t try to find it out either. It was the internal security team at Renault who tracked it down and made the deduction.”

This, to say the least, is a lame mitigation of his conduct. As Libération sarcastically points out, the very mention of a Philippe working in marketing would have enormously simplified the task of the internal investigation. But the newspaper also casts doubt upon the authenticity of Lévy’s account. It says that Tixador’s colleague, an ex-military type called Dominique Gevrey (himself under investigation at one point), gave a much more explicit version of Lévy’s role: “Lévy telephoned Tixador directly, who put the speaker-phone on in my presence.” Lévy then (according to Libération’s account) proceeded to badmouth Clogenson (accablant Clogenson de tous les maux). Gevrey claimed that Norman played only a minor part in the investigation, passing on the information that he had been told Clogenson and a supplier were involved in financial irregularities – without at any point specifying who the source of these accusations was.

What remains to be unravelled is Lévy’s motive for tipping off the investigation team about Clogenson. Libération, which broke the story yesterday, speculates that it could have something to do with Clogenson giving business to digital agency Fullsix – a competitor to Publicis, which is the dominant Renault agency.

Mindshare beats Carat to €150m SFR media-buying and planning account

August 1, 2012

Word reaches me that Aegis’ Carat has just lost one of France’s biggest media accounts to WPP’s Mindshare. SFR, the mobile phone carrier owned by Vivendi, has a media budget of about €150m (£120m). Overall, it is one of France’s biggest advertisers, ahead of Orange, but behind Renault, with a total budget of about €300m.

For WPP, it’s second time lucky. In 2009 a joint-ticket of Mediaedge-CIA and Mediacom got into the final frame of a review, but was seen off by Carat, which has now been the incumbent agency for about 15 years. OMD and Zenith-Optimedia also participated in the 2009 pitch. It is not known whether other agencies were involved in the current one.

SFR, which offers fixed line, mobile and broadband services, spends the biggest part of  its advertising budget on television – about €92m last year. Next comes outdoor, with a spend of €65m, then digital, with €62m.

Separately, Carat will have been shaken by the news that Joel Ewanick, the man responsible for placing General Motors’ $3bn global media account in their hands, has been abruptly fired by his company.

Earlier last week, John Gaffney, who led Carat’s North American General Motors account out of Detroit, quit the media agency. The circumstances surrounding Gaffney’s departure are unclear. Some sources maintain his departure was related to client dissatisfaction with Carat’s performance. Others more directly connected to the situation insist Gaffney’s exit was not directly related to performance on the GM assignment.

Are these two electric car ads for Renault and Nissan by any chance related?

May 30, 2011

The chances are you won’t have seen Renault’s expensive new global campaign, promoting the virtues of its ZE electric model. That’s because it won’t be airing in Britain until September.

Which is a pity, because it’s a nicely crafted piece of advertising that fetes the coming of the electric revolution in an unusually humorous, ironic way. Irony being a hallmark of neither the automobile industry nor the French ad industry.

It’s produced by Paris-based Publicis Conseil and driven, as it were, by the agency’s chief creative officer Olivier Altmann. And here, for the uninitiated, it is:

Nifty, isn’t  it? Now, here’s another campaign, produced by TBWA for the Nissan LEAF. It has just begun airing in the USA. I wonder if you can spot the differences:

Spookily similar aren’t they? In fact, so similar you would draw the obvious conclusion that these rival car giants were collaborating in a global generic push for their electric car technology.

Nor, at first sight, is that such a silly conclusion. After all, Nissan and Renault are related. Renault, run by Brazilian whizz kid Carlos Ghosn, is the dominant partner in an alliance, with a 44.3 % stake in Nissan; while Nissan has a strategic cross-holding of 15% (with no voting rights) in Renault.

However, the collaboration is firmly anchored in technological development, production improvements and a bit of badge engineering. It does not extend to sales and marketing – which are still regarded as totally separate operations and highly competitive ones at that.

Yet that’s precisely what Publicis Conseil and TBWA appear to be doing with the electric platform – collaborating. The production values of the two ads may be slightly different, and there are significant variations in the development of the story board, but the creative concept appears to be identical.

Not so, I’m told. There is fury in both agencies, which have taken to accusing each other of plagiarism. At very least there must have been a leak. Legals have been threatened … though I doubt the threat will come to anything. So, come on boys, tell us: who had the idea first?

UPDATE: The answer to my last question may be, “Neither”. A chum in Italy, Tommaso Ridolfi, tells me there is a third ingredient in this thickening plot: Mitsubishi Motors. Mitsubishi launched its i MiEV(Mitsubishi innovative Electric Vehicle) on the European retail market at the end of last year. Check out this ad, ‘Let’s Go Electric’, for similarities to the above. It bears an uncanny resemblance, particularly to the Nissan spot. The only thing is, it appears to have preceded them, airing in March. Mitsubishi is certainly not an ally of Renault or Nissan. For more commentary, see Joelapompe’s site.

I-Level default sends tremors through the industry

May 6, 2010

For those in marcoms, the descent of digital agency I-Level into administration has some alarming echoes of the sovereign debt crisis being played out in Greece.

Just a few short months ago, no one would have seriously contemplated the possibility of either event. Now, we’re beginning to worry that this portends the second leg of financial meltdown, and that a domino effect will ensue.

I don’t want to push the parallel too far, of course. I-Level’s management was always infinitely more competent than that of the Greek economy. Nonetheless, for those who had eyes to see it, this was a calamity waiting to happen. The detonator clock started ticking in February when I-Level, in alliance with Starcom MediaVest, lost out to WPP’s GroupM in a pitch for the COI’s £250m consolidated media planning/buying account. Up to that point, government digital media business accounted for £40m of I-Level’s billings, or about 40% of its revenue. Replacing a slug of income that big was never going to be easy, but the difficulty was exacerbated by I-Level’s financing mechanism. Private equity investors ECI bought a 60% chunk of the group in April 2008, as a precursor to its international expansion. The deal valued I-Level at about £46.5m, but had the effect of burdening it with debt of £32m – much of it redeemed at an unsustainable interest rate of 12%pa. Put another way, that meant the group had to earn pre-tax profits of at least £3m a year merely to cover its interest payments. Guess what? The punitive interest payments kicked in just as I-Level was beginning to lose business. And that was before the coup de grâce delivered by the COI.

Even so, its disappearance is a shock. Set up in 1999 by Andrew Walmsley and Charlie Dobres, I-Level had near-iconic status as one of the few first-wave digital agencies that surfed the dotcom bust and managed to retain its independence. Among its blue chip clients are Procter & Gamble, The Sun, Orange, Sky, Renault, Comet and Samsung. Its top brass, who are now all out of a job, include respected industry figures such as Walmsley himself, chief executive Steve Rust and chairman David Pattison. Up to 100 people are expected to be made redundant. I-Level’s demise is a warning, not merely to those who would sell out to private equity investors, but of the fragility of fortunes, even in the relatively buoyant digital sector.

UPDATE: RIP I-Level. The administrator, Zolfo Cooper, has liquidated I-Level. Media owners such as Microsoft, Yahoo and Google will be faced with multi-million pound losses. It’s the biggest and most spectacular implosion of a high-profile agency since Yellowhammer went bust in 1990. The only part of I-Level to survive is the fast-growing social media operation, Jam, which was sold to Engine yesterday. That means about 20 staff out of a total of 120 have been reprieved.

ELSEWHERE IN ADLAND, I note the champagne corks are popping – and for good reason. DDB London learned this week that it had scooped the £75m Virgin Media account, previously with RKC&R/Y&R.

Woodford: Walking tall

Its understandably chipper chief executive Stephen Woodford tells me that the agency’s proposed integrated strategy was key to winning the business. Whatever, it’s not every day an agency wins an account that instantly boosts its income by 10%. And it gets better. DDB is heavily dependent upon international business, such as VW. Virgin is almost entirely domestic. It thus provides the London office with some valuable “shop window” advertising that should in time attract other local buyers.

What made Max Mosley step down?

June 25, 2009

Max MosleySo farewell, Max Mosley – linchpin of Formula One – and one part of an inseparable double act that has gone down in history. While Bernie salted the money away with ever more ingenious financial engineering, Max made sure that no one else got their hands on the rule book and spoilt their game. Together, they were the enforcers, exercising an arbitrary control over the sort of  fiefdom last seen in these realms about the year 1485.

Why exactly did Max quit so suddenly? Like everything else to do with the chicanery of Formula One, we can only see through a glass darkly. Was it a case of Max, the consummate  poker player, finally overplaying his hand? Or, more improbably at first sight, Max the sacrificial lamb laying down his career for the sport he loves?

Incredibly, you can make a case for both positions without fear of contradiction. After besting his opponents during an in flagellante delicto scandal that would have brought a lesser man down, Mosley must have dispelled any surviving doubts that he walked on water. He claimed he would resign this autumn as president of the Federation Internationale de l’Automobile (FIA), his power base these past 16 years. But those familiar with the situation reckon he had no such intention and, come the time, he would have put himself forward for another 4-year term, there being no obvious alternative. Under pressure, he indicated as much himself during the heated controversy of the past few weeks. Sponsors, shareholders in F1, the constructors, the teams, Ecclestone even, may have thought he had damaged the reputation of F1, but they couldn’t see an alternative either. So they shut up.

In these circumstances, Mosley may have wrongly concluded that he had the power to drive through the structural reforms F1 so badly needs if it is to remain an appealing spectator sport. Chief among these was the need to radically reduce the budgets deployed by the F1 teams from about £200m per annum to nearer £40m. The point of this was to make the sport more affordable to new would-be teams. Honda has recently pulled out and it has not proved that easy to fill the grid, especially in the current straitened economic circumstances. A brilliant idea, passed through the committees nem con? Not exactly. Eight F1 teams (there are only 12 altogether, and two of those remaining are not established) threatened to secede and form an alternative championship. Funnily enough, these eight teams all have powerful constructors – like Mercedes, BMW, Renault, Toyota – behind them and they took a dim view of having their technical advantage in the field handicapped by an ‘arbitrary’ budget ceiling which might help less well-endowed newcomers.

Fota, as the alternative organisation was dubbed, would have split the sport, reduced spectators, damaged TV rights and had the sponsors tearing their hair out. But Mosley was convinced that when push came to shove, the constructors would back down. After all, he and Ecclestone had been here before, and seen them off. They may have the money, but they don’t have the organising skills.

So, why after showing supreme brinksmanship did Mosley still lose? The first point (one he would make himself, no doubt) is that he did not. Well, not exactly. The sport remains united, under the control of Ecclestone and the FIA and – so Mosley claims – the dissident teams have agreed to a glider-path of diminishing budgets over several years. So a triumph of sorts, even if he won’t be around to relish it. But the big mystery, according to a source familiar with the situation, is why his negotiating position collapsed so dramatically and he agreed to go more or less immediately. As they point out, he could have called Fota’s bluff and maybe got away with it. Not only had he thrown writs in their path, which would have to be answered in court, there were circuit owners to be brought around and TV rights to be negotiated. No small hurdles to overcome.

Now that he is going, the immediate reaction in F1 circles (not excluding Ecclestone) is a sense of relief. For all Mosley’s accomplishments over the years, the whiff of scandal has left a nasty smell about the place. Relief, too, at the FIA, now that no one has to pass his colossal personal expenses.

Looking further afield, there may be cause for regret. Whatever his flaws, Mosley knew both what he wanted for the sport and how to get it. It is for any successor to prove that he has both the leadership and sufficient detachment from the many powerful stakeholders in F1 to make a success of running the FIA.

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