With eyes open for opportunity in Orange County, the advertising firm of Cunningham & Walsh moved its entire Los Angeles operation on April Fool's Day, 1984, to the Fountain Valley headquarters of its primary client, Mitsubishi Motor Sales of America.
Servicing Mitsubishi soon took up a lion's share of the small agency's time and eventually became the operation's only client--until now.
The auto company has axed Cunningham & Walsh and hired the much larger Grey Advertising of New York to help it achieve its growth goals over the next five years.
"Saying it came as a surprise is an understatement," said Robert L. Morgan, general manager of C&W;'s Fountain Valley office, who said he had no knowledge of Mitsubishi's negotiations with Grey Advertising during the past two to three months. He said he had "no doubt" that C&W; could have handled Mitsubishi's needs.
Though the $30-million account was C&W;'s only West Coast account, an undetermined number of the 64-employee staff will remain in Southern California after the Mitsubishi contract runs out Feb. 4 to drum up new business, Morgan said. Others will relocate most likely to the 480-employee firm's New York or Chicago offices.
Meantime, Grey Advertising, the nation's ninth-largest advertising agency, will move most of its staff from the Detroit suburb of Southfield to an Orange County office yet to be chosen. Two months ago, the agency lost the $40-million AMC/Renault account, and the Southfield office will close at the end of the year.
"Basically, in the last three or four months, Mitsubishi has been looking at a five-year growth plan," said Timothy Gallagher, public relations manager for the company. A larger agency with a bigger research group was needed to promote the company's ambitious plans.
Gallagher said that, with so many cars, Mitsubishi needed to send a "clear message" to consumers so that they do not get confused "about what Mitsubishi stands for."
"It's safe to assume that a company with $1.3 billion in billings can offer more resources than one with $360 million," said Garrett J. Nash, Mitsubishi's marketing vice president, about the choice in advertising firms. Nash and Gallagher acknowledged, though, that a higher than average turnover in C&W;'s staff was one of a number of factors that contributed to the change.
Morgan blamed the turnover, which he said was less than 25%, on the move to Orange County. The move, which he said Mitsubishi requested, was aimed at cutting down wasted hours on the freeways between the distributor's headquarters and C&W; offices in Los Angeles. While the move facilitated work between the two companies, Morgan said, it put the onus on a number of C&W; employees who did not want to move to Orange County and who eventually no longer wanted to drive from the San Fernando Valley to Fountain Valley. They left or relocated to other C&W; offices, he said.
The local C&W; office had absorbed the turmoil of the move and was making plans to add more Orange County accounts when Morgan said he was called in Nov. 4 and told of the switch.
"We will probably remain in Orange County and Los Angeles. We will have a presence in this market; there's no doubt about that," Morgan said. For now, the agency will remain on a floor in Mitsubishi's headquarters.