Daily Edition: May. 21, 2004 Page 2

May 20, 2004

Detroit agencies tightening belts

BBDO Detroit is laying off 100 employees in a belt-tightening move. The agency handles all of Chrysler's national and dealer advertising. The automaker has been exacting cost cutting from all its suppliers and its ad agencies are no exception. BBDO is a unit of Omnicom.

Cuts could also be following at GM ad agency Chemistri, say sources. Chemistri CEO Pat Sherwood recently announced he is leaving. And top creative executive Gary Topolewski left for BBDO to work on Chrysler's business. Chemistri's clients include Cadillac, Pontiac, GM Service and Parts Operations, and several global GM operations. There are rumblings that GM is unhappy with the departure of Topolewski, and Chemistri owner, Leo Burnett Worldwide, is scrambling to find a top-drawer replacement. One possibility, though, is moving the national advertising of Cadillac to Leo Burnett's office in Chicago where there is a wider pool of creative talent. Such a move would drain headcount from the Troy offices of the agency. Detroit has long been dogged by the difficulty in attracting superior advertising talent from markets like New York, Chicago, and San Francisco. -Jim Burt


PEMEX starts cleaning up its act

PEMEX, that is, Petróleos Mexicanos, is the Mexican government owned and operated Petroleum Company and traditionally has been considered unresponsive to ecological concerns.

However, the high levels of pollution in México have forced this petroleum company to start cleaning up its act.

With a population of 21 million people - and a heavy dependence on cars - México City has the persistent problem with air pollution.

A few years ago, the México City government set up a program for older vehicles named "Hoy no circula" (Not driven today) in which according to the last digit on the license plate, such vehicles are required to stay parked for a day a week.

This program has helped somewhat to reduce the air pollution and has caused the automotive manufacturers to improve anti-pollution measures on newer vehicles, which by the way, comply with more stringent emissions standards and therefore are granted the permission to be driven everyday of the week.

Even though this measure has helped to reduce pollution, it has proved insufficient to solve the problem.

PEMEX announced a sulfur content level reduction in its Premium gasoline, which has an octane rating of 92.

The sulfur reduction on the PEMEX fuels will be an ongoing effort that will conclude in 2009. The new PEMEX fuels have the target of complying with the American Tier II standard.

This would also pave the way for the arrival of PZEV (Partial Zero Emission Vehicles) rated cars like the new Ford Focus and Dodge Stratus as well as direct-fuel-injection vehicles into the Mexican market

Previously, the sulfur content level of the Premium gasoline was of 500 parts per million (ppm). The new gasoline has a sulfur level of 300 ppm, and by the end of the year PEMEX has the target of lowering the sulfur level to 250 ppm. By 2009 PEMEX has the goal of achieving a sulfur content level between 50 and 30 ppm.

PEMEX also intends to lower the sulfur content in its diesel fuel from 500 ppm currently to 15 ppm by year 2009.

The new gasoline formula will yield a 40-percent reduction in the emission levels of sulfur dioxide, which according to PEMEX would represent 200 tons of sulfur every year.

In a four-year period, in order to achieve the sulfur reduction of its fuels, PEMEX will invest a total of $1.9 billion. -Francisco Pérez

Toyota Workers Rebuff UAW in Georgetown

The United Auto Workers union has sustained a crushing rebuff in its latest bid to organize transplant assembly plants in the U.S., with only 37 percent of the 7100 workers at Toyota's massive Camry/Avalon/Solara facility in Georgetown, Kentucky, willing to sign cards agreeing to a formal UAW vote this past spring. This was far fewer than the 50 percent needed. The union, whose membership has fallen sharply in the past 25 years, has closed its organizing office in the central Kentucky city of Georgetown without promising to return, according to the Detroit News (May 18). A modern plant that pays its workers as much as $24 an hour and provides 24-hour daycare and bi-annual bonuses, Georgetown has never undergone recurrent layoffs or line speedups that stir pro-union sentiment. The relatively young workforce contends that no union is called for so long as its products continue to sell well and compensation matches, or even exceeds, that of unionized plants.

The UAW's organizing vice-president, Bob King, had envisioned a Georgetown victory as a drive for successful efforts among the nine other non-union foreign-owned assembly plants in the U.S. Union membership surpassed 1.52 million in 1979 but has dropped steadily to 624,585 at the outset of 2004. The Detroit-headquartered UAW has lost bargaining elections at Nissan's plant in Smryna, Tennessee, and has opened a "card check" drive at the Honda plant in Marysville, Ohio, but the wind went out of the sails with the rebuff at Georgetown. Toyota, which deals with the UAW at the NUMMI plant it shares with GM in Fremont, California, took a neutral stand on the UAW's Georgetown bid.

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