Carsguide, one of News Limited’s strongest classifieds brands, has been hit by the sacking of managing editor Ged Bulmer yesterday hot on the heels of the exit of publisher Sue Klose.

Word has reached Crikey of the rancour that has been bubbling inside News’ Holt Street headquarters for months over the insert — delivered to millions of readers via the company’s tabloids. It’s understood things finally boiled over following a power struggle with national features editor John McGourty.

Bulmer, an industry giant who brought serious credibility to the brand, was poached with much fanfare from Wheels magazine 15 months ago, having served for nine years as editor and previously at stablemate Motor.

David McCarthy, a Mercedes Benz spokesperson who dealt closely with Bulmer, told Crikey the “fantastic” editor “will leave a very big gap”.

“It’s very said to hear that News Limited decided he wasn’t going to be part of CarsGuide. Someone of his solid experience will be sorely missed,” McCarthy said, adding the talented journo was almost certain to be snapped up by a rival publisher or PR outfit. And in a possible warning to former News colleagues, he said: “He knows where all the bodies are buried.”

Klose left two weeks ago and a replacement is yet to be named.

Meanwhile, Crikey has also been told that Steve Howard, who works at Surry Hills as group managing editor, is now effectively redundant. He is said to have been offered something else but is currently on leave surveying his options.

News Limited CEO Kim Williams is under pressure to act on a Rupert Murdoch directive to cut costs by 6% before the end of June and by 15-20% over three years.

South of the Murray, turmoil has continued afresh inside the Herald & Weekly Times’ Southbank HQ.

Legendary Sunday Herald Sun production editor Mike Sparrow has been “suspended” for two weeks after inadvertently omitting a DVD promotional blurb from the front page of the third edition of the Victorian paper. Staff had organised a collection and card for Sparrow but were dismayed when it seemed editor Damon Johnson and deputy Ellen Whinnett had declined to sign the card. (Johnson told Crikey this morning that he had never seen a card.)

The newsroom also remains incensed over the departure of respected op-ed page editor David McMahon, who resigned after Telstra complained about minor alternations to an Australia Day contribution from CEO David Thodey. McMahon was asked to line up drop caps on the page to spell the word “Australia Day”, requiring the first sentence of Thodey’s contribution to start with the letter “Y”.

A Telstra flack, Karina Keisler, promptly contacted editor Simon Pristel, who took up the issue with McMahon. Telstra spends millions of dollars a year on advertising with the Herald & Weekly Times. (Keisler told Crikey this morning the fracas was simply “an issue for the Herald Sun“).

The incident raised questions on the paper’s backbench about whether any alterations to copy would be permitted in the future.

McMahon’s exit brings to double figures the number of recent departures under a controversial “cash pay-out policy” enacted in lieu of redundancies. Crime reporter Sue Hewitt upped sticks, and then promptly scooped her old paper on the front page of The Age revealing the details (alongside Adam Shand) of murdered stripper Jazzy O’s will.

The Media, Entertainment and Arts Alliance are believed to be monitoring both incidents.

Meanwhile, MX subbing staff are also on tenterhooks with their roles set to be absorbed into the NewsCentral pool in the next few weeks.

Southbank moles further report that during Rupert Murdoch’s trip to Australia late last year he told editor Simon Pristel the paper should be more like the London Sun. Murdoch meant affinity with its audience, but some of Pristel’s underlings interpreted it as a directive to change the paper’s typography.

One newsroom insider explained the miscommunication thus: “The thing with News Limited editors is that they hear an utterance from Rupert and they try to do what they think he’s saying. Rupert couldn’t give a fat rat’s clacker about this so long as it contributes to the bottom line, so if they actually did something that made money I don’t think they’d be in any strife at all — short of backing Julia Gillard, that’d probably go down pretty poorly.

“They’re very reactionary and they’re looking to deflect form their own poor performance as managers in this organisation.

“There’s no plan,” they said, describing a hodge podge of chiefs-of-staff, news editors, copy re-writers and production. “Unfortunately the end product is there for all to see.”

And rumours that Walkley-winning cancer survivor Jill Baker, currently deputy editor of the Herald Sun, might be about to replace Johnston as editor of the Sunday have been nixed. “You’re full of horseshit and could not be more wrong,” Johnston told Crikey this morning.

HWT editor-in-chief Phil Gardner was similarly dismissive: “Like every newspaper in the world, we are constantly tweaking our editorial structures to meet the challenges of multi-media publishing. But to suggest Jill Baker is taking over the SHS is the greatest load of rubbish I have heard.”

On the most recent circulation numbers the Herald Sun’s Monday-Friday edition and the Sunday Herald Sun recorded declines of 4.6% and 5.7% respectively.

News’ acting communications tsar Steve Browning declined to respond to Crikey‘s queries on the CarsGuide and Steve Howard situations when contacted this morning.

UPDATE 4pm: HWT corporate spinner Genevieve Brammall responds:

“We became aware of a serious breach of the HWT Code of Conduct on Friday January 27.

“The breach concerned a journalist who had added quotes to a first person op-ed supplied by Telstra CEO David Thodey.

“When questioned, the journalist admitted the breach.

“He tendered his resignation and it was accepted immediately.

“He is no longer with the company.

“To imply there is any causal link between this staff member’s resignation and advertising revenue is absurd.”