GM News: Whistle-Blower To Have Cause The Departure Of Joel Ewanick

[William Maley]

William Maley

Staff Writer - CheersandGears.com

August 8, 2012

Last week, we reported on the departure of GM's global marketing chief, Joel Ewanick. The reason given out at the time was Ewanick not meeting up to expectations. A day after his departure, a report from Bloomberg said Ewanick's departure was due to a review of a recent sponsorship agreement that didn't meet company policy.

A week later, a new report from Bloomberg sheds some more light on why Ewanick was kicked out.

The recent sponsorship agreement in question was a partnership between Chevrolet and U.K. soccer team Manchester United. The agreement, lasting till 2021, would have GM shelling out $18.6 million for this and next year, rising to roughly $70 million in 2014, and increasing 2.1% after that. Total cost of the deal: $559 million.

This would have been ok if Ewanick hadn't spread the cost out to other marketing budgets and disclosing a price that was much less than the $559 million.

A source tells Bloomberg that a whistle-blower came forward questioning certain aspects of the agreement between GM and Manchester United. An internal investigation was launched and found that the total cost was much higher and hidden in other budgets. Ewanick denied he was hiding anything about the deal during the investigation, but that soon unraveled. Ewanick's resignation was announced on July 29th.

Source: Bloomberg

William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.

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[Justin Bimmer]

There is always value in transparency, but many companies value results more. This was such a long term contract that Ewanick was sure to be gone before results came in on this program regardless if he resigned now or was fired 2 years from now for example.

[David]

I think we also need to Question the value period for the contract full term length. This is such an outragous price for marketing that anyone with a reasonable head would have to question the cost.

Sounds like GM did the right thing and I hope the next company that hires him will question if they want a man doing their marketing that will play this kind of games.

As a stock holder, I would be exploding if mgmt was doing this. This is what old days GM would have done. Todays New GM needs to be better than this.

[riviera74]

I thank the whistleblower for exposing this crook and stopping this madness. One question: can GM get out of this contract?