ANALYSIS: Crisis Management - Big business beware: political fallout ahead - Bridgestone and Ford are feeling the effects of their PR blunders. Is the current consumer outcry a portent of things to come? Steve Lilienthal investigates

It was the political equivalent of Through the Looking-Glass.

It was the political equivalent of Through the Looking-Glass.

It was the political equivalent of Through the Looking-Glass.

At recent hearings on Capitol Hill, Louisiana Rep. Billy Tauzin, the Republican (read: pro-business) chairman of a House commerce subcommittee, sounded much like a crusading consumer activist.

When Firestone EVP Gary Crigger told the hearing that he 'would have done anything to prevent the deaths' alleged to have been caused by his company's tires, Tauzin lit up.

'Maybe if you weren't so concerned about keeping the facts from the Department of Transportation, perhaps you would have prevented it,' he said.

The Bridgestone/Firestone crisis is more than a question of reputation and responsibility. It is another piece of kindling on a growing bonfire against big business.

'It was a trifecta of PR disasters,' said MWW Group executive vice president Bob Sommer. 'The companies blew off the cardinal rules of PR and by doing so made themselves pinatas to Congress. They lied, they covered up and they did not allow a real outlet for customers and their families to express their grievances.'

Even a GOP-led Congress, considered to be pro-business, could not ignore it.

Shortly before the hearings, Business Week published a cover story warning that the good times for corporate America is provoking a backlash. The federal government was considered by Americans to be the 'problem' during the last two decades, a time when deregulation of many industries occurred.

Now the reverse may be true. Big business may be starting to feel the heat.

Kept down by 'the man'

According to Brad Bannon, president of Bannon Communications Research, Americans dislike big institutions. Bannon believes many working and middle-class Americans feel economically pressed at a time when companies have been doing very well. They also see service declining in areas such as banking, telecommunications and air travel.

Given this trend, can Bridgestone/Firestone and Ford regain respect with consumers and on Capitol Hill? Is there really a populist revolt brewing against corporate America? And can corporate PR use a crisis to seize an opportunity?

First, let's tackle the immediate damage. Retired corporate AT&T communicator Ed Block says Firestone's brand may be 'mortally wounded' and believes it is likely that both companies will face expensive legal action.

'There is no magic bullet that will remedy this mess,' Block says. 'The principal players will just have to ride it out.'

While the action has moved to Washington, DC, Steve Lombardo, president of StrategyOne, Edelman's research subsidiary, says the companies' strategy cannot be solely based on lobbying and their PR cannot be aimed at influencing inside-the-beltway elites.

'They can't do advertising and grass-roots to condition the environment given a population base that is so angry,' Lombardo says. 'They need to demonstrate to DC opinion leaders that they take the problem seriously.

Only after consumers have been satisfied will the politicians be satisfied.'

Lombardo believes Bridgestone/Firestone needs to demonstrate to consumers that they will not just meet tire standards but exceed them He also believes the CEOs need to make themselves more publicly available to consumers and the media.

Then, says Lombardo, softer issues can be addressed that will be important to the companies' reputations. For example, the two companies should come forward with an environmentally friendly plan to handle disposal of recalled tires.

What's the long-term impact of the controversy? Some believe this could ignite heated political battles.

'Regulatory issues are back in play,' says Roll Call political columnist Stuart Rothenberg. And right now public opinion appears to be stacked against corporate America.

Is it an accident that when Gore started launching attacks against HMOs, tobacco companies, pharmaceutical firms and gun manufactures that he started gaining in the polls?

The August Business Week/Harris survey revealed that 40% of American adults strongly agreed that 'business has gained too much power over too many aspects of American life.'

According to Booth Gunter, communications director for Public Citizen, 'This will take some of the steam out of the anti-regulatory zeal that this Congress has displayed. It's a good opportunity to point to this as an example of what can happen when those in power do away with safety regulations.'

Concern over that power can lead to strange bedfellows. Take Gary Ruskin, director of Commercial Alert, which was founded by Ralph Nader. He has built some bridges with conservative groups, such as Phyliss Schlafly's Eagle Forum, on the issue of commercial exploitation of children.

But Sommer says that even though the news media picked up on Gore's attacks, 'it's interesting what he didn't go after.' He notes the attacks lacked the sweep of those used by three-time Democratic presidential nominee William Jennings Bryan in criticizing 'the capitalistic classes' or FDR's challenge of 'economic royalists.'

Not surprisingly, opponents like Ruskin and GOP political consultant Matt Klenk, who are to Gore's left and right, respectively, see his populistic soundings as more of a PR play than a deep-held political conviction.

Klenk says it will be forgotten as soon as the votes are counted. Although Sommer believes some new regulations may be added under a Gore administration, he says the vice president's populism has a limit because 'it reflects where Americans are today.' (Sommer has referred to Gore's populism as 'populism Lite.')

A Bush presidency might be further cause for populism, particularly if the Democrats retake the House. And while such a scenario will likely set up some high-pitched battles, Public Affairs Council president Doug Pinkham believes Bush is no idealist, and that experience shows he 'attempts to work with other parties.'

Both Pinkham and APCO Insight president Mark Benson are not so sure that a new regulatory regime is coming. Benson goes so far as to say 'the era of big government is over.'

A corporate caveat

But whoever wins, businesses should be considering changing their ways.

'No matter who's elected,' emphasizes Pinkham, 'companies are likely to find themselves in a situation where people have higher expectations of corporate behavior.'

Benson sees the real threat to corporations taking place in court. 'The record would seem to indicate that the tort system is being used as the principal means to enforce emerging views of corporate responsibility,' stresses Benson, who adds that companies should be quick to 'admit problems and provide assurances where malfeasance is alleged. (Consumers) accept the notion that companies make mistakes.' But hedging and covering up will only lead the public to support 'extraordinarily punitive policies,' he says.

Whether the regulatory surge occurs, companies and PR agencies should realize that an ounce of prevention is better than a pound of cure.



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