CORPORATE AMERICA'S REACTION: Customers panicking, investorsworrying. How are companies affected by the attack handling such achallenge?


Crisis: United and American are the only airlines coping directly with

the horror of passengers and crew members killed last week. But the

entire industry is facing meltdown: a potential collapse of passenger

confidence and a whole range of new safety regimens to put in place.

Polls show Americans are worried about hijacking, and Hewlett-Packard

told The Wall Street Journal it will limit employee travel in the


The industry faces financial ruin, with one source revealing that major

airlines have 15 to 45 days of available cash to keep them afloat.

Continental, Northwest, American, and US Airways have all announced

layoffs. Midway has already gone out of business.

Communications issues: The industry faces the daunting task of keeping

passengers up to date on changing schedules and publicizing new security

procedures to customers and crew. At the same time, it must remain

sensitive to the victims of the attacks.

A delicate lobbying and PR effort has already begun to win a government

bailout for the industry.

Meeting the challenge: Any precedent for this level of PR challenge is

nonexistent. "The industry has never faced anything of this magnitude

before," says Cindi Kurczewski, a Delta spokesperson.

United and American have maintained their focus on the families of the

victims, with victim-support teams dispatched and toll-free phone lines

set up for information about passengers.

Keeping passengers informed of schedule changes has been a primary task

for all airlines. Delta, for example, has corporate PR teams, culled

from the ranks of the different departments, available 24 hours a day to

ensure schedule updates are immediately available to the press.

US Airways has used every possible resource to reach customers,

providing schedule changes and security information. "It is essential to

reach out through every possible avenue of communications, whether it's

frequent-flyer newsletters or a press release on the website," says

Richard Weintraub, senior director of US Airways.

How the industry will handle the PR challenge of restoring long-term

confidence in safe flying is not yet clear. But economic realities are

not far from anyone's mind. Burson-Marsteller is working with American

Airlines and the Air Transport Association on both victim and passenger

issues, and is lobbying the government for assistance. The agency is

helping to frame the messaging, developing third-party outreach with

contacts on Capitol Hill as the industry seeks a $20 billion


"The airlines have been forced to step forward and talk about the

economic realities, and are portrayed by some as callous," says Chris

Chiames, MD of public affairs at Burson, and head of its airline


But Chiames says that so far, the industry is striking the right balance

between its concerns and grief over the tragedies. "Airlines are on a PR

tightrope, and they are staying on it at the moment."


Crisis: Telecoms, utilities, and other businesses directly affected by

the tragedy - particularly those at or close to Ground Zero - have to

provide relief and information to customers who are without service.

These companies face a potentially massive loss in revenue and

irreversible damage to their reputations if they don't respond in a

timely, appropriate manner. They also face the prospect of losing

investor confidence.

Communications issues: Restoring faith in their company and assuaging

investors' fears.

Meeting the challenge: In the aftermath of the disaster, affected

companies had to implement wartime-like media relations offices to

respond to press inquiries and communicate with customers and


Con Edison mobilized 140 work crews to repair damage that left 14,000

customers without power. The in-house comms team quickly informed local

media that emergency lines were open so customers could find out when

service would be restored, and the PR staff also used its website to

provide updates about the damaged grid. Michael Clendenin, director of

media relations for Con Edison, took reporters to Ground Zero to

interview emergency teams.

Con Edison's media team, headed by VP Francis Rashike, appealed to TV

networks to update customers on progress in restoring power. All the

networks ran stories, as did many print outlets. Con Edison refused to

discuss how much it spent as a result of the tragedy.

Another company affected by Tuesday's tragedy was Verizon. Seven out of

its 10 cell phone stations were knocked out. Faced with an overloaded

grid, the Verizon media office's first task was to inform the public

that Manhattan's 4,000 pay phones were available for free. Local TV

networks relayed the information to the public, and Verizon's media

relations team placed notices on its website so that consumers would

know the latest progress. (Another message on the website stated, "Our

business is to help people communicate, and never has this mission been

as important.") Verizon chief of comms Eric Rabe headed the media team,

and appeared on CNNfn and other programs to talk about what Verizon was

doing to repair its network.

American Express' in-house communications staff - divided into three

units to handle the crisis: corporate card, bank card, and general

advisors - worked from their homes to convey the message that the

company was open for business. The CEO of American Express appeared on

CNBC, Moneyline, and other TV shows to let consumers know that American

Express was not affected.

Additional people were mobilized to provide customers with other

emergency services, and the company website provided information to

investors. "It's important for our CEO to be out with sleeves rolled up

so investors and the public know that business will continue as normal,"

says Monica Beaupre, company spokesperson.


Crisis: Insurance companies are going to be expected to make

unprecedented payouts to cover losses and damage to life, health,

property, vehicles, and businesses.

Communications issues: Insurance companies must assure investors that

the company can manage the finances of massive payments on policies

affected by the crisis without going bankrupt, all while remaining

compassionate to the extreme loss suffered by customers.

Meeting the challenge: Analysts are unsure how many years it will take

for the full impact of the tragedies to reach the insurance


Current estimates hover above $20 billion, and Maurice Greenberg,

CEO of American International Group, warned MSNBC that the damage caused

by the attacks may total the largest loss in insurance history.

As ranked by MSNBC, the US insurer with the most anticipated loss from

the attack is Berkshire Hathaway, with 3-5% of industry losses. The

Omaha, NE-based firm is the holding company for financial wunderkind

Warren Buffett.

The company primarily operates property/casualty insurance, as well as

reinsurance through subsidiaries National Indemnity and GEICO.

A company employee said the 13-person company would not do any

interviews with any media regarding the terrorist attacks, as per

company policy.

She said the company has no a PR department. However, a company press

release dated the day after the attacks said it would be many years

before a range could be established for insurance industry losses.

At the other end of the communications scale is the next highest-ranked

US company on the MSNBC list: Employers Re, also known as GE Employers

Reinsurance Corporation (ERC), will suffer $600 million in

estimated losses.

The ERC website holds a company statement saying thoughts and prayers

are with the families and friends of victims. It goes on to express its

sympathies to victims, close friends, and business acquaintances in the

financial and insurance community. Finally, the ERC statement says the

company was aware that no financial payment could make up for human

suffering, but that ERC hoped by providing resources and support to

customers it could help alleviate some pressure.

The company also posted an open condolence letter from chairman,

president, and CEO Ron Pressman, which included Pressman's direct phone

number. A separate financial release from Fairfield, CT-based ERC

estimated the division's impact on third-quarter losses for parent

company GE. In the release, GE chairman and CEO Jeff Immelt says

monetary losses cannot compare with the suffering of the attack's

victims. He also aims to give investors a measure of assurance, saying

ERC's viability and GE's fundamental financial strengths were not


Stock markets

Crisis: Many employees have suffered extreme personal losses. Staff must

continue to commute through damaged areas and work in temporary


Communications issues: The stock markets have to counter against the

psychological effects of the tragedy to prevent a chaotic free fall.

Meeting the challenge: Before 9:30am last Monday, when the NASDAQ and

New York Stock Exchange (NYSE) held a joint opening-bell-ringing

ceremony followed by two minutes of silence and the singing of God Bless

America, NASDAQ CEO Hardwick Simmons issued an open statement.

The letter relates the NASDAQ's condolences and prayers to the families

of victims of the hijackings two weeks ago. The letter then reads, "The

US capital markets are open. This is important and significant. A sign

that our great nation will not be intimidated." But the markets plunged

anyway. That day, $600 billion in market cap was erased.

In that first day of trading following four days of silence, the longest

market blackout in history, the DJIA lost 7% of its value, down 679

points to close at 8,920.70. The NASDAQ lost 6.85%, or 116.09 points, to

close at 1,579.28. Both closes, after volume more than double normal

levels, were the lowest since 1998.

A textbook phrase was repeated often: the markets hate uncertainty. That

uncertainty was so physically close to the NYSE, that traders and

investors arrived to work wearing now-familiar white masks to filter the

smoke still choking the area.

But in the media, financial leaders applauded market performances. US

Treasury Secretary Paul O'Neill gave a symbolic thumbs-up to the first

day of trading. Keying off of the only record-breaking high number of

the day, volume, he said, "Not only did we trade, we traded more shares

than ever before." Earlier, in a speech at the opening ceremony, O'Neill

told traders to "act like Americans" and not engage in panic


The US government had instituted a rare, between-sessions half-point cut

in interest rates. It had also encouraged patriotism-motivated stock

buying during the blackout. But a headline on summed up

many people's impressions of that first day: "Stocks sag despite Fed's


But perhaps even the most ardent flag-waving PR plan couldn't cut

through the blackening power of that World Trade Center soot. As

economist Carl Weinburg told the BBC, "We have no precedent against

which to gauge the psychology of what will happen."

To counter that uncertainty, the exchanges may have to change their

comms functions from merely descriptive to compassionate and optimistic.

Failing that, the government may have to change its strategy from

flags-as-dollars to dollars-as-dollars.

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