GM freezes media spend as swingeing job cuts loom

General Motors, the troubled US carmaker, is understood to have frozen its $2.1bn (£1.36bn) global media spend and has not ruled out cutting marketing jobs, as it desperately seeks to save money across its business.

Senior sources say the struggling manufacturer, which owns the Vauxhall and Bedford marques in the UK, has suspended all media spend on new campaigns. It is thought that existing campaigns and planned campaigns will continue, but no new work will be launched.

The company has warned that it will run out of cash in the first half of 2009 if market conditions do not improve. It says it needs at least $11bn (£7bn) in cash to pay the bills each month.

In the US, the company will raise $5bn (£3.2bn) by cutting spending, sales promotion and production. Sources suggest the decision to freeze media spend in Europe will achieve similar cost savings.

A GM spokesman says existing campaigns “would continue in the media as normal”, but was unable to confirm media planning and buying activities for future campaigns. This includes a campaign by Delaney Lund Knox Warren for the new Vauxhall Insignia model, due to be unveiled next month.

The cuts are part of GM’s ongoing $20bn (£12.8bn) liquidity improvement programme, first announced in July. The company is understood to have already asked agencies to cut their fees by about 20% as part of these plans.

GM also plans to axe a number of management jobs and thousands of factory jobs worldwide. A spokesman could not rule out marketing cuts. He adds: “In this period of uncertainty, you can’t really rule out anything,” he says.

The company says it is approaching new business “with the minimum amount necessary to operate.”

GM currently sells its Cadillac, Chevrolet, Hummer, Vauxhall and Saab models in the UK, and works with four lead agencies – Lowe, Draftfcb, DLKW and Luton-based BMB Ltd. Media planning and buying is shared between Carat and Just Media.

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