Crisis Management

The "Sgt. Schultz" Defense

Enron CEO Ken Lay and Global Crossing CEO Gary Winnick are both claiming that they knew nothing about the billion-dollar shortfalls, deceptive accounting and other problems at their companies. Experts say ignorance is a "potentially effective legal strategy," even though "you should expect chairmen to be aware of major factors affecting the business." After all, isn't that why they pay them the big bucks?


I Want My SUV

New York Times reporter Keith Bradsher's new book "High and Mighty -- SUVs: The World's Most Dangerous Vehicles and How They Got That Way" hit bookstores September 17. Yet before its release, reporters began receiving a 15-page memo titled "SUV Allegations and Facts." According to the Corporate Crime Reporter the memo "seeks to mislead reporters with quotes taken out of context." The source of the attack memo is Washington DC-based PR firm Strat@comm, which counts as clients DaimlerChrysler, Ford, GM, and a number of auto industry trade groups.


Halliburton Hires Crisis PR Firm

Halliburton Corp., Vice President Dick Cheney's troubled former company, has hired spin doctor Michael Sitrick, whose firm was most recently hired by the Archdiocese of Los Angeles to manage its pedophile-priests scandal. "Halliburton, being sued by shareholders for alleged fraud, is under investigation by the Securities and Exchange Commission and might face a financial meltdown if it can't negotiate a global settlement over asbestos litigation," notes the Washington Post.


CEOs in Times of Crisis

WorldCom may be a bad example of how to run a company, but it's doing a good job of reputation management, according to Idil Cakim of the Burson-Marsteller PR firm. "WorldCom is a good example of how crisis could be managed, or at least the public could be answered, via the Internet," Cakim said, praising the web site which WorldCom has created to share information with the public about its bankruptcy.


Adelphia's Makeover

Adelphia Communications is using Robinson Lerer & Montgomery for crisis PR in the aftermath of its bankruptcy filing and the arrest last week of several company executives. "RL&M's mission is to reassure cable subscribers that the company has a future once its reorganization is completed," writes O'Dwyer's PR Daily. An ad campaign will urge cable subscribers to "stick with us," characterizing the bankruptcy as "a reorganization effort to rebuild the company and restore its integrity."


Making the World Safe for Obesity

PR giant Golin/Harris is bragging about its new "Global Obesity Task Force." The Task Force doesn't seek to fight childhood obesity, but to protect the interests and image of the multibillion dollar Obesity Industry. Their press release states: "With consumers becoming increasingly wary of American 'big business,' many companies find themselves under scrutiny. ... The increase in childhood obesity has special interest and government groups seeking to hold someone responsible.


"Restoring Trust" the DOD Way

In a feature article "Restoring Trust," PR Week talked to PR experts about restoring confidence in the business world. "American corporations have to understand that the best thing they can do right now is to communicate: completely, honestly, transparently, and often," Notre Dame University business professor James O'Rourke told PR Week. "If more CEOs sounded like Defense Secretary Donald Rumsfeld in their briefings, we'd all be better off. If things aren't good, say so and explain what you're going to do about it.


APCO Helps WorldCom With "Transparency Initative"

WorldCom has hired APCO Worldwide to do damage control concerning the company's $3.8 billion accounting fraud reports PR Week. "The commitment initially was to being forthright, open and honest," APCO CEO Margery Kraus said referring to talks between WorldCom and APCO about a PR strategy before the crisis. "That commitment has certainly increased because that is an important way for the company to operate," Kraus said. According to PR Week, part of APCO's WorldCom strategy is "emphasizing that its current woes were the responsibility of the prior management team."



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