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GM's Ad Man

In the land of the gray flannel suit, Phil Guarascio is the one wearing Armani.
Paul A. Eisenstein
From the Print Edition:
Demi Moore, Autumn 96

(continued from page 1)

It's a couple ticks past nine on a miserable Monday morning. A storm is blowing through Detroit, lashing futilely against the stone pillars of General Motors' world headquarters. But another storm has found its way inside, riding up the elevator and sweeping across the hall into the 10th-floor offices of the corporate advertising staff. Phil Guarascio is on the move, like a whirlwind, trailing papers from two oversized duffel bags. "Weekend work," he explains tersely. He rifles the pile of memos and messages already piling up on his desk, firing off instructions to his secretary and a slew of subordinates who have gathered outside his office door. With an almost off-handed precision, he lays out his week's agenda. It isn't quite Mount Olympus, but his actions often carry as much force as the lightning crackling outside. A simple yes or no can determine the fate of a new network television show, save or sink a magazine, make or break an advertising agency.

Guarascio, the 55-year-old vice president and general manager of marketing and advertising for GM's North American operations, controls the fourth-largest media budget in the United States, $1.5 billion a year in ads and promos. Call it the ultimate leverage. "I can pick up the phone and call any major player in the business," he casually acknowledges. Yet he didn't set out to become one of the most powerful men in the world of advertising. Like his second cousin, legendary New York Yankee Phil "The Scooter" Rizzuto, Guarascio dreamed of playing professional baseball. That was before he quit law school and let a blind ad in The Wall Street Journal set his course. As a young apprentice at the advertising agency Benton & Bowles, he found he had a lawyer's instinct for negotiating the deal, but he also discovered an inborn showman's flair. Phil Guarascio found within himself a natural pitchman, one who innately understood the relationship between smoke and mirrors, style and substance.

"His sense of theatrics and love of life give him that fine distinction," says Sean Fitzpatrick, vice chairman of the McCann-Erickson Worldwide ad agency. "He carries everything off with fine style, whether in the way he works, the cigar he chooses or the way he dresses." It is a style that seems at once both essential and yet equally out of place at GM, an often hide-bound company of boardroom gray, off-the-rack suits and carpet remnant ties. The automaker within the past year has accepted the move to casual clothing in the workplace, perhaps for no other reason than its inability to dress up in the first place. Yet Guarascio continues to wear his hand-tailored Armani and Joseph Abboud suits, bedecked by a closet full of impeccable silk ties. With his dark, Mediterranean looks, he is Julio Iglesias doing James Bond.

It isn't always an easy fit. GM prizes executive anonymity. As in the Japanese corporate culture, the nail that sticks up gets hammered down. The very idea of a personality profile is anathema to the corporate overseers. Guarascio hesitates, they say no, then they reverse the decision only reluctantly. Yet Guarascio seems to have found a comfortable fit. "GM lets me be me," he says. "If you have a fierce drive to win, there is room for a personality and operating style out of the traditional path." One thing is certain about Phil Guarascio: his style, like his career path, is anything but traditional.

He was a child of a working-class neighborhood in Queens, New York, and Yankee Stadium was his field of dreams. Guarascio was a solid high school catcher good enough to snag a minor league contract after graduating in 1958. He wanted to be the family's next Rizzuto. But he knew it would take years and a lot of one-night stands in small towns to get a shot at "The Show," the big leagues. So Guarascio reluctantly traded his bat for a three-ring binder, heading off to Marietta College in Ohio. He earned a bachelor's degree in English and planned to parlay it into a law degree at Fordham Law School in New York City. But he discovered one minor problem. He couldn't stand law school.

And so he answered the blind ad. What he found was something that felt as natural as a catcher's mitt. It was 1964, and he was on the fast track at Benton & Bowles. By 1976, Guarascio had made Madison Avenue's big leagues; he wore a vice president's stripes and controlled the powerful media department at Benton & Bowles (now D'Arcy Masius Benton & Bowles). But nine years later, Guarascio unexpectedly took the job as GM's first executive director of advertising services, at a time when the automaker had serious marketing problems.

"I wanted to see how good I was," Guarascio says in a manner unusually close to self-doubt. But his self-confidence flags only momentarily. "I brought a high order of expertise," he quickly adds, stressing he couldn't resist the challenge.

There was a time, not all that many years ago, when General Motors owned the American auto industry. It set the standards for styling, for technology, for pricing. Though he's typically taken out of context, former GM president "Engine" Charlie Wilson wasn't far off the mark when he declared to Congress in 1953 that "What's good for General Motors is good for the country." In the 1960s, when Dinah Shore told us to "See the USA in our Chevrolet," that one GM division controlled roughly 25 percent of the U.S. marketplace--as much as crosstown rival Ford Motor Co., the nation's number two automaker. GM, on the whole, owned more than half the new car market, and it employed a league of lawyers whose careers were dedicated to fighting off attempts by the Justice Department in the 1960s and early '70s to break the automaker up on antitrust grounds. While the U.S. government was unsuccessful, a greater threat would soon be posed by foreign influences.

If the oil shock of 1973 was a shot across the bow, the Iranian oil crisis of 1979 was a devastating broadside. Big was no longer better with fuel prices tripling in less than a year. The Japanese showed buyers that new cars didn't have to keep breaking down. The import share soared, much of it coming out of GM's hide. GM raced to downsize, but the king had lost touch with his subjects, a message clearly driven home on a 1980s Fortune magazine cover. Lined up side-by-side were four of the automaker's new sedans, identical but for the chrome badges identifying divisional brands.

The chrome was tarnishing fast, despite billions invested in new products and plants. Baby Boomers had, en masse, written off the automaker's products. And GM's five divisions seemed to be spending more time and money competing among themselves than they did with the rest of the industry. That approach was virtually locked in stone, for each division had its own advertising agency and handled its own accounts. There was little corporate direction and no leveraging of GM's potential purchasing power in the ad market. The automaker needed an image fix and a new strategy, and Guarascio was called in to play doctor. The new advertising director realized GM needed to centralize its campaign planning and its decision making to achieve more buying power for all its divisions. But in a balkanized company that prized its power bases and resented outsiders, few were willing to swallow the medicine he prescribed. Guarascio recalls some "rough spots" at first. It's a vast understatement from someone who had to devote much of his first few years to learning the politics of an ancient and closed corporate order.

Guarascio made a tempting target. There was the Queens accent and the fancy clothing, cut to a size 41 short. He was, the cynics declared, just a New York Napoleon trying to show the hicks in Detroit how to do things. "I've heard all the short jokes," Guarascio admits. And he's learned a few good ones of his own to disarm his critics. Of course, a good share of the carping revealed that Guarascio really was doing his job, which was to get into the face of the established order. "Some people didn't like the change," recalls McCann's Fitzpatrick. "He destroyed the rate card and shook things up. But Phil is responsible for Detroit becoming a modern advertising market, which it wasn't when he came."

Guarascio has done a lot more than just demand a discount on ad space and time. He also helped create the marketing megadeal. One of the first, an $80 million, cross-media package with Time Warner in 1989, gave GM the ability to present a coordinated campaign simultaneously in films, cable, magazines and books. The previous year--for $750 million--Guarascio made sure that no one could watch NBC without being inundated by GM's increasingly thematic corporate message. He pioneered the use of alternate media, from cable to videotapes. And many consider him the father of the GM credit card. Also known as an "affinity card," it gives its user credit on every purchase. But it's credit that can be applied only toward the purchase of a new GM vehicle--loyalty by default. "It's a matter of getting close to the consumer," notes Lou Schultz of the Lintas: Worldwide agency. "Its down-your-throat marketing." Guarascio prefers to call it "holistic marketing."

Holistic isn't a word one might expect to find in the Queens vocabulary, yet it does have a way of covering Guarascio's entire oeuvre, an aggressive be-the-best-in-everything style of life. Maybe it's a New York kind of thing. He's been known to dress down a subordinate for not dressing up. He's an in-your-face kind of guy, whether at work or on the golf course, where he is a highly competitive player. "Can I get in people's faces? Absolutely," he says. "But hopefully, it's done in an engaging fashion."

Constant travel is a part of the business, and Guarascio's endlessly searching for great new restaurants, especially cigar friendly places. He began smoking cigars after "an incredible dinner at '21'" in 1980, and it quickly became a regular part of his life. "It's a hobby, more than a habit," Guarascio says, but like everything else he does, it's a hobby in which he's determined to excel. "Like most neophytes, I tried lots of brands and learned what I liked to smoke and when. I moved to another level."

Even today, Guarascio remains on the lookout. "Whenever I travel, I'll try to find the top one or two local cigar stores and try to find something new. The process of discovery is what makes it a hobby." Guarascio smokes at least 10 cigars a week, and half of them are new finds. But he also has a broad list of regular favorites, including the Davidoff Special "T," the Ashton Cabinet and a big Butera. He'll go for a Davidoff Grand Cru or a Paul Garmarian Bon Bon for a quick smoke, an Avo Belicoso or a Davidoff No. 2 over lunch. At night, he prefers a big cigar, "the bigger the dinner, the bigger the cigar," such as a double corona of 48 to 50 ring gauge.

While Guarascio confesses "the best Cubans are as good as anything in the world when you're looking for something rich, powerful and robust," he has to confine that pleasure to the occasional dinner trip across the border to Windsor, Ontario. Guarascio has three small humidors at home, but he keeps a bigger stock at a New York tobacconist. "Call it an experiment, like aging fine wine," he says.

Guarascio will usually light up during his morning commute, and again after a good meal. It's one of the pleasures that helps him get through his heavy workload, particularly on Sunday "when I need four or five hours to attack the work I didn't get to during the week. The whole ceremony of getting out the cigar gets me into the right state of mind." He typically carries two cigar cases with him wherever he goes, one a leather and silver screw-top, the other handmade by Ashton from goatskin.

Now that he has gotten a vice president's title, there's only one big disappointment in his decade at GM: corporate headquarters has been converted into a smoke-free building. But it's a disappointment that certainly doesn't overcome the benefits of the job. Guarascio has shown a surprising stick-to-itiveness that has confounded skeptics who didn't believe he'd last in Detroit more than a few years. Many thought he would bail out in late 1994, when GM brought in former Bausch & Lomb executive Ronald Zarrella to serve as its new director of brand management. With the power to oversee the image and marketing direction of each GM product line, Zarrella gained near veto power over Guarascio's decisions. But the two men have formed an easy and increasingly effective coalition.

 

It wasn't the first time the conventional wisdom was wrong. Guarascio had already demonstrated his loyalty to GM by rejecting a multimillion-dollar job offer personally packaged by media mogul Ted Turner. "I wanted to see it through," Guarascio says about turning GM around. "When the cheering starts, and it will, I want to hear it." Perhaps more surprising is the confession that "I didn't want to return to an East Coast lifestyle." His daily 3.5-hour round-trip commute from the suburbs has been cut to an hour. It's time he can devote to plenty of other things, including a long list of charities. "And he's not just lending his name," says one longtime associate. "If he's involved, he's active."

Guarascio and his wife of 33 years, Ruth, have two children: Lisa, 30, and David, 27. With the kids now on their own, Phil and Ruth live in the Detroit suburb of Bloomfield Hills. Their elegant home is filled with his hobbies and collections: cigars and wine and fine art, with an emphasis on photography and art glass. It is designed to provide a respite, but one he doesn't take advantage of very often, for despite his heavy work and travel schedule, Guarascio takes little time to slow down. Weekends are filled with squash in the morning, golf in the afternoon, a charity event at night. But it's not all just for fun, he insists with a grin. "Knowing what's going on in the world, what people are eating, what they're wearing and where they're going, it helps you become a successful marketer."

Several years ago, Guarascio's colleagues in the Detroit ad community put his power in perspective with a one-act skit dubbed "The Wizard of Guar-Oz." Guarascio is more than just a big fish in a small pond. He's the whale.

When Phil Guarascio moved to Detroit, some friends chipped in to buy him a one-way return ticket to New York. It's still hanging in a frame behind his desk. He has become the big in his own apple, and he's not planning to leave. At least not until he hears the cheering.

Paul A. Eisenstein runs The Detroit Bureau, an independent automotive news service.

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