GM ad budget faces slash after US car industry bailout plan rejected

The aid package was rejected by the Senate due to a disagreement between Republicans and Democrats over cutting the wages paid to car workers.

The White House has not indicated whether it will step in and act, but a spokesman said: "We will evaluate our options in light of the breakdown in Congress."

GM has previously said it needs $4bn by the end of the month or it may not be able to keep operating, and according to today's Wall Street Journal it has already engaged bankruptcy specialists.

In the US, Publicis Groupe-owned Starcom Mediavest handles GM's $2bn media planning and buying account.

The French holding company also handles creative work for GM's Buick, Pontiac and GMC brands, while Interpublic agencies handle creative for the big-spending Chevrolet.

GM consolidated Buick and GMC with Publicis last year, moving the accounts out of Interpublic agencies McCann Erickson and Lowe respectively.

Recently there has been speculation in the States about the manufacturer consolidating its entire marketing activity with one holding company.

Interpublic shares fell 9.28% yesterday, closing at $3.52, before the Senate's rejection of the bailout package. Publicis' share price is down 2.59% this morning to €18.82.

In GM's attempts to land the financial rescue package, it has previously said it would cut its marketing costs by $600m over the next four years.

Back in July before it appealed for a bailout, asking US agencies to cut their fees by around 20%.

In the UK, GM's Vauxhall is due to release a DLKW-created campaign for its new Insignia model in January, with media buying through Aegis-owned Carat.

Chrysler is seen as the most likely to fail next, after GM. Its chief executive Robert Nardelli has told Congress it would be unable to pay suppliers and employees if it didn't get loans by the end of the month, and it has also hired bankruptcy experts.

Most of Chrysler's marketing activity is handled by Omnicom, while Ford, the healthiest of the three, is with WPP Group agencies, including Ogilvy and Wunderman.