Wednesday, November 19, 2008

The Tone Deaf PR of the Big Three

ABC's Brian Ross and Joseph Rhee report that the Big Three automaker CEOs flew private jets to Washington, D.C. to plead for taxpayer-subsidized bailouts:

The CEOs of the big three automakers flew to the nation's capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy.

The CEOs of GM, Ford and Chrysler may have told Congress that they will likely go out of business without a bailout yet that has not stopped them from traveling in style, not even First Class is good enough.

All three CEOs - Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler - exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM's $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone.

"We want to continue the vital role we've played for Americans for the past 100 years, but we can't do it alone," Wagoner told the Senate Banking Committee.

While Wagoner testified, his G4 private jet was parked at Dulles airport. It is just one of a fleet of luxury jets owned by GM that continues to ferry executives around the world despite the company's dire financial straits.

"This is a slap in the face of taxpayers," said Tom Schatz, President of Citizens Against Government Waste. "To come to Washington on a corporate jet, and asking for a hand out is outrageous."

Wagoner's private jet trip to Washington cost his ailing company an estimated $20,000roundtrip. In comparison, seats on Northwest Airlines flight 2364 from Detroit to Washington were going online for $288 coach and $837 first class.

After the hearing, Wagoner declined to answer questions about his travel.

Ford CEO Mulally's corporate jet is a perk included for both he and his wife as part of his employment contract along with a $28 million salary last year. Mulally actually lives in Seattle, not Detroit. The company jet takes him home and back on weekends.
[...]
"It appears that the senior management of the automakers simply don't get it," said Schatz.

The Sauce

"It appears that the senior management of the automakers simply don't get it," said Schatz.

It would seem so. It would also seem that their public relations advisors are either too "in the bubble" or too powerless to point this out to their bosses. This kind of tone deaf handling of a crisis situation could very well be a nail in their coffin when trying to shore up public support for a bailout. These guys apparently learned nothing from AIG, where executives of the bailed-out-by-taxpayers insurance behemoth met at swanky resorts.

Public relations professionals who are doing their jobs should be thinking "outside the bubble;" operating three steps ahead by analyzing how company actions will affect public opinion. This is especially true in a crisis period such as the one the automakers face. The PR professional should also have the nerve to tell the boss when he's about to make a very stupid move--even one that was unintentional.

I was once in this situation, and had the unenviable task of telling my boss, the CEO of a sizable firm, that he was making a mistake by doing XYZ. He responded very negatively, to which I replied, "Part of my job is to tell you the truth as I see it. The fact that you don't like the truth doesn't make it any less true."

Well, it did not end well for either of us. I didn't work there much longer (by my choice) and the company went out of business relatively quickly after my departure. Of course, the company didn't close because I left, but certainly some poor decisions affected the public image of the company-- and that certainly didn't help when other business woes struck.

Lesson: Stay out of the bubble!

1 comment:

Mary Hutchison said...

Good posting! I am against the bailout for the 'big three'. Let them go into bankruptcy--any Fed money should go ONLY to those hourly workers laid off, not to high paid management. Giving them a handout won't solve anything--a temp fix at best.
Good to see the reporters digging deep to reveal this extravagent perk that is not necessary!