• by David Goetzl , May 29, 2009

Interpublic Group CEO Michael Roth reiterated Friday that assuming General Motors files for bankruptcy Monday, the holding company will be owed more than $150 million by the automaker. Separately, court papers would be expected to show that Publicis Groupe is owed approximately the same amount.

Speaking to investors, Roth characterized the $150 million figure as "conservative" and said he is hopeful the bankruptcy court will label IPG a "critical vendor." That way, it could recoup a large chunk or even all of the fees it is owed.

A "critical vendor" classification would suggest that advertising and marketing are considered vital for GM to continue to operate. Publicis would presumably be seeking the same status from the court.

Roth indicated that the bulk of the $150 million owed IPG is for work already performed by creative agencies Campbell-Ewald on the Chevrolet account and McCann-Erickson on GM's corporate-image advertising.

While he indicated that the dollars are owed IPG directly, a percentage may be due media companies (or other vendors) that IPG has done business for on GM's behalf. An IPG representative declined comment.

IPG has informed investors about the $150 million exposure to the potential GM bankruptcy multiple times. The automaker is believed to be its largest client, although not as mighty as it once was.

Omnicom Group is in the midst of dealing with what IPG and Publicis could be facing. The holding company is the second-largest unsecured creditor listed in Chrysler's bankruptcy filing, with its BBDO division owed $58 million.

In April, Publicis CEO Maurice Levy said GM owed the holding company approximately $150 million for services rendered. But he suggested the figure could be as high as $200 million.

Approximately $100 million would be for media planning and buying services done by Starcom MediaVest Group. The remainder would appear to be for creative work on the Buick, GMC and Pontiac brands in the United States and Chevrolet in Europe. Publicis also handles most of the digital media work for GM.

In a separate bucket, GM could owe a substantial amount to media companies for inventory that Publicis purchased on its behalf, Levy said.

Both IPG's Roth and Levy have indicated that the GM blow is severe. At IPG, the imbroglio could have been much worse in 2005, before it lost the media-buying duties now at Publicis.

"Years ago, an impact of [a client] the size of General Motors to us would have been devastating," Roth told the investors Friday. "Obviously, it's not something we would be rooting for, but certainly we have the financial resources to withstand any exposure to it."

In preparation, IPG altered a credit agreement with lenders last month to protect itself against a Chapter-11 filing. IPG says 13% of its revenue comes from the auto and transportation sector. The holding company is somewhat buttressed against a major spending drop at GM after winning the BMW media account last week, as well as holding those duties for Hyundai and Kia.

Still, CEO Roth said IPG is optimistic that GM will emerge from bankruptcy and return to vibrancy with IPG agencies playing a central role in a comeback. "Chevy is going to be a key component of the turnaround," he said. IPG shop Campbell-Ewald has worked with the brand since 1922.

Last month, even with the threat of bankruptcy looming, IPG hired a former top GM executive to oversee relations between IPG and the automaker. Martin Walsh, who was general manager for the Hummer business, is reporting directly to Roth in the new post.

"We will be geared up to meet the demand of (GM)," Roth said.

IPG's experiential marketing agency Jack Morton Worldwide would be expected to continue working with GM. And word emerged Friday that the European Opel brand, handled partly by McCann-Erickson, would receive an infusion of financing. On the flip side, the Deutsch agency works with Saturn, a brand GM is likely to abandon.

At Publicis -- which had $7 billion in revenue in 2008 -- Levy characterized the $150 million to $200 million it could be owed by a bankrupt GM "a low number," and said he was "pleased." But he did lament that Publicis could lose work on the Pontiac brand that GM is expected to discontinue.