GM's LeNeve weighs talent against ownership in black ad agency review

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LeNeve: I would say to that (a) I disagree that the vast majority do operate that way because a lot of our competitors are already doing business with diversity agencies owned by a holding company...

But only 49% is owned by that holding company.

LeNeve: I just go back to the earlier statement. We may very well end up, when the final assignment of everything is done, with the majority [of the agencies hired] being diversity-owned. I don't look at that as a specific criteria because I can't control ownership. You're talking about 2%. If somebody was 51% and they sold the other 2% to the holding company a year from now, should I fire them, does it change what they're doing? Absolutely not.

I can't manage the variables like that. I understand what you're saying, and I hope that the final result of this is that we have a great line-up of diversity agencies for all of our brands that fall in various categories of ownership, but I'm not going to manage that or tell them how to run their business.

Well, I can tell you that's what the concern is about. In the statement that was released to us, it says that GM is going to continue to use “African American owned and Hispanic owned agencies.” But then the rest of the statement doesn't specifically say “African American owned.” I think we needed to understand what you meant by that because “owned” means something very specific. But just being African American is open to interpretation.

LeNeve: And I see the distinction that you're making. I understand it, and I can tell you that we're going to have some African American owned agencies that are going to be part of the review. Carol H. and Translation are cited in the statement. As far as I know Translation is still African American owned.

They're not. Steve Stoute sold the company to Interpublic in October.

LeNeve: I haven't been informed of that, but that goes to my earlier point. I look at these agency relationships as being long-term. I don't look to review them every year and if we hire someone that's independent today and they sell 51% of their interest, I don't believe that I should fire them if they're doing a good job.

But why isn't minority-ownership a requirement going into the relationship? GM does it with its suppliers.  There are very specific guidelines about GM's commitment to minority-owned suppliers. Why doesn't that same commitment and those guidelines apply here?

LeNeve: Let me ask you a question; if agency A was minority-owned, and all of the employees of that agency are non-minority, and agency B...

According to the National Minority Supplier Development Council, which developed guidelines with virtually all of corporate America at its side, who the company employs is not the issue. The issue is about who controls that company, not about employees.

LeNeve: But all of those employees are making a salary, supporting a family...

That's not the issue...

LeNeve: I'm saying I can't manage all these things...and I don't know that it's my responsibility...

All I'm saying is that GM has a criteria for your minority suppliers and you have a stated commitment and goals for working with them. Correct or not? Is there not a stated commitment about the amount of work that General Motors will conduct with minority-owned suppliers?

Ryndee Cagney [GM spokesperson]: Yes, overall from a macro sense...

LeNeve: The distinction with material suppliers is we put out a specification for a brake pad, that's the same brake pad whether you buy it from -- the money does become important because if it's minority owned or majority owned, but it's the exact same brake pad. I'm talking about human talent, and expertise and experience. That's what we're buying. I don't think it's apples and apples. I think it's apple and oranges. And to me, the make-up of the agency, their track record is more important than a distinction between a 51% and 49% ownership. That's what I'm saying.

But don't you want to encourage that talent that is often ignored in those minority communities and give them the opportunity to be part of General Motors' success? There's a reason why the national origin of a car's components is considered a big deal and all of these things apply to what we're talking about.

LeNeve: I think our track record -- and we don't know where we're going to land here. For the last eight years we've had minority-owned agencies. Many of our competitors haven't had that situation for the past eight years. Let's wait until we complete the process. You bought up some interesting points and I think we have to let this thing play itself out.

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