CAMPAIGNS: Bethlehem shows steel in hard times

PR Team: Bethlehem Steel (Bethlehem, PA) and The MWW Group (East Rutherford, NJ) Campaign: Bethlehem Steel Chapter 11 Filing Time Frame: June 2001 to mid-2002 Budget: $250,000

PR Team: Bethlehem Steel (Bethlehem, PA) and The MWW Group (East Rutherford, NJ) Campaign: Bethlehem Steel Chapter 11 Filing Time Frame: June 2001 to mid-2002 Budget: $250,000

Bethlehem Steel was facing a major liquidity crisis when it hired The MWW Group to craft a communications plan for employees, retirees, government influencers, customers, suppliers, and the press. But as work on the plan progressed, it became apparent that the company was headed for a Chapter 11 bankruptcy filing. Shortly before that event, a new CEO was hired: turnaround expert Robert Miller, Jr. Miller's communications style was much more open than that of the company's previous CEO. Miller, as the new boss, also didn't need to waste valuable communications time defending past company action. He could concentrate on building trust in what was ahead. Strategy "All the work we had done needed to be thrown out," says Michael Kempner, CEO of MWW. For example, a video shot for employees with the old CEO was junked. "The new CEO was not vested with the problems of the past. The messages changed dramatically, combined with his very different style," Kempner said. A major objective became the establishment of Miller's credibility. Overall, MWW hoped to secure employee support for the difficult steps the company would have to take. In doing so, it also sought to reach key third-party sources that the media would seek for comment. Tactics MWW had to redo its communications plans to take advantage of Miller's more open style. To start, work-site visits were scheduled for Miller. New sections of the company website were established to discuss the restructuring - one for external audiences, and another for internal audiences. Mechanisms were set up for employee feedback, ranging from an 800 number for employees that didn't have access to web-enabled kiosks put in work facilities. A range of written communications was produced and delivered to employees at work and to their homes. This included a Chapter 11 primer, benefits communications, and information on company financials. Contact was also established with labor unions. A key-influencer initiative sought to reach out to important individuals, such as mayors in towns where the company has facilities. "The reality is that they all influence each other. You couldn't do an employee-communications program in a vacuum," says Kempner. Even before the Chapter 11 filing, the company began putting key message points in press releases. It began talking more about the costs the company carried from the past, about the problems of foreign competition, and about the need for work-rule flexibility. After consensus had been built with them, company middle managers were used to deliver messages. "This is an old-line company that never really had a lot of employee communications," Kempner notes. Miller had to deliver the tough messages. He wasn't committed to seeing the company survive Chapter 11 in its old form, for example, and press reports have noted his efforts to sell Bethlehem. However, an effort to sell to US Steel fell through due to the major retiree benefit costs Bethlehem has. Miller's bluntness didn't turn off workers, tough, Kempner contends. "People just wanted to know the truth. They didn't want happy talk," Kempner says. "Miller can talk about the future without having to protect the past." Results The company filed for Chapter 11 last October, with no major employee disruptions to manufacturing, and with balanced media coverage. Major customer and supplier relationships have remained intact, and subsequent staff cuts occurred without threats of employee walkouts. Bethlehem Steel representatives weren't available for comment. As part of the new management's announced goals, the executive team has been significantly reduced, including those charged with the original Chapter 11 filing strategy. Future Bethlehem's future is still very much an unanswered question. Miller is seeking concessions from the United Steelworkers of America that will let the company outsource work to cut expenses. MWW has turned over the communication vehicles it created to internal staff at Bethlehem.

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