Ford puts relationship with WPP under review

Ford is investigating the closeness of its relationship with WPP in a move that could end its status as the only advertising agency used by the motor industry giant.

WPP's biggest client is examining whether proper internal procedures were followed when it made its agency a "single source supplier" and whether it is getting value for money.

Jim Bright, a Ford spokesman in Detroit, said the inquiry may also look at whether Ford's marketing policy was influenced by the friendship between its president, Sir Nick Scheele, and Sir Martin Sorrell, WPP's chief executive. It may also consider whether the fact that Sir Nick's son, James, who works for WPP, has influenced the relationship between the two companies.

Mr Bright said: "The review will look at whether procedures were followed in arriving at the single source arrangement. That's the primary issue. We have certain criteria which must be met to justify a single source."

Ford's relationship with WPP's agencies goes back decades and it has long been in charge of most of the car maker's marketing budget. In November, after a meeting with Sir Martin in New York, Sir Nick decreed that Ford would only use WPP.

Sir Nick, a Briton, ran Ford's UK-based Jaguar Cars unit in the 1990s, when he got to know Sir Martin well. James Scheele works in New York at WPP's Young & Rubicam division but is not involved with the Ford account.

Last year, up to 7 per cent of WPP's global revenues of £4bn came from its work for Ford. Mr Bright said Ford's review of its advertising must be seen in the general context that it is examining all its supplier arrangements, with the aim of cutting costs. The car maker's investigation is being undertaken by its purchasing department. Ford is under severe financial pressure.

"This is part of our efforts to wring out costs and insure adherence to our policies of openness and transparency," Mr Bright said.

Mr Bright said the new arrangement with WPP, which was spelt out in a letter from Sir Nick to Ford marketing managers last month, was aimed at lowering costs and making its promotional efforts more efficient.

Ford had been dealing with several of WPP's agencies, leading to duplication of work and multiple billings. In return for making WPP a single source supplier, WPP agreed in November to provide a single point of contact for Ford. A senior WPP executive on the Ford account recently quit but the agency said that its top director on its Ford business remained in place. WPP declined to comment.