Jun 15

What’s $146 million among friends?

June 15 - pocket-money How'd you like to be owed $146 million and be asked by the debtor for even more? That's exactly the situation Publicis finds itself in with General Motors.

Not only does the automaker owe the advertising holding company $146 million but, get this, GM's asked Publicis to continue working on the account during and after its bankruptcy case.

Talk about being stuck between a rock and a hard place. What would you do? The Ad Age article reporting the mess doesn't indicate what Publicis will do. But, how could they continue to go even deeper into debt? I'm all for showing good faith and investing in a client's business. But. The GM business model is completely broken and will take decades to fix (and I doubt it can be).

This is a serious image and reputation challenge for Publicis (not to mention a brutal drain on cash flow). Clients, prospective clients, the Street and investors have to be mightily concerned about the company's financial future. And, employee morale has to be at rock bottom. In fact, I can just imagine the water cooler discussions at Publicis agencies:

Shimmerwitz: 'So, with all the money GM owes us, do you think we still have a shot at year-end bonuses?'

O'Hara: 'Of course we do. But, I wouldn't count on a replacement for the water cooler when it's empty.