Archive for April, 2009
April 30, 2009 at 2:46 pm · Filed under Issues Management
In Israel a formal apology was offered to the Ambassador of Mexico. Deputy Health Minister Yakov Litzman suggested the swine flu be renamed Mexico flu as pigs are not kosher. Says National Public Radio in the USA:
Mexico’s ambassador to Israel formally protested Litzman’s statement. Israel’s Foreign Ministry later apologized, saying Litzman was “just kidding.”
Meanwhile in Egypt some 30,000 to 40,000 pigs will be culled - even though there appears no link between the animal and today’s outbreaks.
Swine Flu was so named as the humble pig was likely the breeding ground of today’s influenza (most accurately known as H1N1). The strain combines elements of swine flu, avian flu and human influenza. Within the pig the cocktail came to life and began spreading from human-to-human.
For reassurance, there is no danger with pork. In fact the misnomer of Swine Flu is causing significant damage to the farming industry. The Australian Pork Council is working to keep the public reassured, according to ABC Rural - “Eating pork is safe, says industry”:
“We need to watch what’s happening, but there’s no risk whatsoever from pigs or pig products in Australia.”
These reassurances are not helping as numerous countries place bans on the import of pork and pig products from nations with reported cases of swine flu. This is leading to a sharp drop in the price of grain - a feedstock for pigs.
For now the name - Swine Flu - is having the unintended consequence of scaring consumers and importers off pork.
The challenge now for producers, industry associations, government and the media to continue providing accurate information in a calm manner. Public hysteria is easily raised through sensational reporting. Each form of communication - from traditional media to social media - can help assuage fears and correct misperceptions. Yet to breakthrough the cluttered airwaves pork producers need some visual-friendly imagery and smart spokespeople to achieve results.
Why not try:
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Eye-grabbing graphics?
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A voice on Twitter and Facebook?
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An up-to-date web site with consumer information?
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Leaflets in stores on smart and safe pork handling?
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Savvy chefs armed with materials ready to speak to television morning shows?
It’s now an obligation to keep consumers informed on the facts and to separate the fiction. Or us little piggies will never go to market…
April 28, 2009 at 8:34 am · Filed under Globalisation
The financial markets caught the swine flu yesterday.
The outbreak in Mexico has spread to America, Canada and New Zealand. Australian authorities are trying to contact 300 people who shared an Air New Zealand flight to Australia (via New Zealand) with infected passengers.
Financial markets - already unstable - sold down heavily in transport and aviation stocks. China has placed a ban on all pork products from the USA and Mexico (despite the fact cooked pork products contain no traces of flu). American authorities have placed an alert recommending against travel to Mexico.
To date the “global pandemic” hasn’t taken an enormous toll (in actual numbers, versus the gargantuan toll one death takes on a family). Yet the biggest casualty may prove economic. They say those most at risk in flu season are the frail. Global financial markets couldn’t be weaker. Add to that calls to slap in place some protectionist measures and you may find swine flu taking a disproportionate bite out of the economy.
It is my fervent hope the flu is contained before taking a high toll in lives. It is my great hope, also, that swine flu doesn’t further infect the already sick financial markets. The patient may not survive a relapse.
April 27, 2009 at 9:20 am · Filed under America, Globalisation
The US auto industry has yet to recover - and this week manufacturer Chrysler is expected to announce Chapter 11 bankruptcy. General Motors isn’t far behind. Both companies benefited from substantial government loans. Only Ford Motor Company continued its drive without assistance.
Ford is not out of the woods. Last week the company announced a quarterly loss of US$1.4 billion. Despite the loss it is a better result than anticipated - and exceeds the previous quarter loss of US$24.8 billion.
GM and Chrysler have taken government money to supplement their own losses. The taxpayer loans have kept the factories open and paid for daily expenses. While Ford has been losing money, it’s earlier actions and savings mean it’s in the best shape to continue - without assistance.
At first I thought Ford’s refusal to accept government money would put it at a disadvantage. Why stand stoic when the handouts are thick and fast? Yet today Matthew Dolan of “The Wall Street Journal” tells that acceptance would have diluted the Ford family shareownings and jeapordised CEO Alan Mulally’s turnaround efforts. Ford remains the only US manufacturer not reliant on government handouts.
And in case US consumers didn’t realise this, Ford’s now using it to their competitive advantage by targeting Chrysler and GM customers. Who wants to buy a car from a bankrupt company? What if the dealer goes under? What does that mean for service - or resale value? Ford has ads saying its dealers are looking “forward to serving you for many years to come.”
Ford’s decision to turn away subsidies may prove to be its wisest decision in years. Just ask all the former GM and Chrysler customers now driving Fords.
April 24, 2009 at 9:47 am · Filed under Media Industry, Public Relations
Public relations practitioners are the “behind the scenes” men and women who assist companies in good times and bad. They help companies get noticed and achieve balance reporting. We can train people to sit in front of television cameras and remain “on message” about an issue or a product. But it’s rare we’re the source of the story.
Today “The Australian” features a front page story on the media management of a high profile legal case. In this case the public relations firm and its client are the story - the print edition features investigative-style photographs of two PR people leaving court.
The article does not question the role of the public relations person - the reporter notes that it’s standard practice for a legal firm and/or company to have a PR firm available to assist journalists. What is under review is the practice of issuing media releases and “backgrounders” to journalists while a motion is being heard in court.
What the article does show is a shift in media opinion against the company and its agency. When the public relations firm becomes the story then the story is always going to be bad news.
April 23, 2009 at 1:31 pm · Filed under America
On Wednesday in suburban Virginia the Chief Financial Officer of Freddie Mac, David Kellerman, committed suicide. He is survived by his wife and five year old daughter along with family, friends and colleagues. My deepest condolences are extended to his wife and child.
Today The New York Times reports how Kellerman’s death is emblamatic of the stress facing financial industry workers today. Kellerman worked tirelessly trying to right the wrongs of the US housing industry. Freddie Mac (and sister company Fannie Mae) are juggernauts in the US mortgage industry. Together they own more than 50% of all mortgages in America. Their willingness to buy mortgages provides banks much-needed liquidity - so more homeowners can be extended credit.
In earlier posts I reported the incredible complexities facing regulators, politicians and financial industry workers as they try to stabilise the global economy. We are not out of the woods yet. Instead it’s getting darker and more perilous and there’s no certainty in sight.
What I failed to appreciate was the enormous strain placed on the men and women “in the trenches” of the financial battlefield. People who work night and day then rush home to change outfits and start again. People who have been demonised in the press and editorial cartoons. People who are now entrusted with saving our economy. People like David Kellerman.
For every one of you I want to give my heart-felt thanks. For every hour spent away from family trying to resolve business issues large and small - thank you. For working to solve complex issues caused by others and maybe even yourself - thank you. And for putting up with the constant harangues, derogatory remarks and insults - I am sorry.
Financial workers we need you today like we needed firefighters and policemen and women after 9/11. There is chaos in the markets and we need your steady nerves, experience and knowledge. Thank you.
Finally I would like to thank David Kellerman for working so hard. I am sorry that strain took such a terrible toll.
April 22, 2009 at 1:03 pm · Filed under America, Media Industry
News stories like this don’t come along every day. Journalists worldwide are bound to cover all the gory details. Philip Markoff will sell hundreds of thousands of newspapers.
What’s so remarkable about Mr Markoff? Here’s a list:
- Handsome and young 23 year old white male;
- Wealthy and privileged - resides in Connecticut;
- Well educated university graduate attending medical school in Boston;
- Romantically involved with a beach-side wedding planned for this summer; and
- Murderer, rapist and robber to pay gambling debts - who met his victims using Craigslist!
Today Markoff is in jail without bail (read details at Associated Press).
In 1986 Robert Chambers killed a woman in New York’s Central Park. He became known as the “Preppy Killer” given his good looks, privileged upbringing and education. Yet back in 1986 we were just getting faxes (honestly) and no one had heard of email. Al Gore hadn’t invented the Internet yet.
So here’s my bold prediction. Markoff will be the stuff of water-cooler conversations and conjecture for months to come. He’ll have hate sites and fan sites and be a top ranked topic on Twitter. His fiancee will recover to sell her story to a tabloid - or if she has a good agent, to People Magazine. We’ll see his apartment, favourite casino, car and dorm room.
And while the victims will be mourned and laid to rest, Markoff will achieve infamy for years to come.
April 22, 2009 at 10:17 am · Filed under America, Globalisation, Australia
Governments around the world are grappling with the banking system. The entire inter-connected ball of string has been close to unravelling several times. It’s only been perserverance, luck and wads of money that have kept it together. In five years time we’ll be reading books entitled, “Financial Armageddon: How the World Economy Almost Collapsed”. That’s assuming worse things don’t happen. Then we’ll be reading survivalist newsletters bought by barter at the communal water well.
Yesterday Bank of America announced a US$4.2 billion profit - and sent the global stock markets crashing. It wasn’t the size of the result - a few billion dollars is still substantial, even though dwarfed by the trillions in bail-out funds. What panicked global financial markets was the composition of the profit. The vast majority was made in global markets through trading in interest and currency products, equities and commodities. This one-time gain even compensated for a new class of concern - bad credit card debts. Bank of America lost nearly US$2 billion in its credit card business. But that makes perfect sense - if your home has been foreclosed and your car repossessed, what’s to keep you making payments on the Visa? (Read the results in The Australian.)
Kevin Rudd, Prime Minister of Australia, published his vision of the clean-up of the global economy prior to last month’s G20 meeting. (That’s the one in London where the protester was killed died.) In it he refers repeatedly to “toxic assets” and the urgent need to flush these from the banking system. Toxic assets. That sounds awfully nasty. Years ago US Republicans were calling for a ban on “partial birth abortions” (also known as late term abortions).
Politicians have a nasty habit of coining terms that become immediately indefensible for the opposition. Who wouldn’t want to get rid of toxic assets? Who could support partial birth abortions?
Yet pick apart the vitriol and look at the root cause. Toxic assets are nothing more than loans made by bankers using bad lending criteria. Sometimes the bankers were prodded on by legislation demanding equal access to credit. Most times the bankers were driven by the fees and surcharges made when lending - and their insatiable drive for profits.
So toxic assets are mistakes by banks. And now politicians want carte-blanche to get in and buy them out. Without punishing the lenders. By having taxpayers pay for the mistakes of salaried bank managers.
At a recent rally in Washington DC one man waved a placard - “Honk if you’re paying my mortgage”. He didn’t look infected by his toxic asset. Instead every horn-blowing taxpayer was covered in toxic spill-out from the banks of America.
April 16, 2009 at 12:38 pm · Filed under America, Issues Management
US Federal Reserve Chairman Ben Bernanke took the role saying he didn’t want to create a cult of personality. Former chairman Alan Greenspan was so well-known and influential that USA presidential contender John McCain, in the race for the White House in 2000, said if Greenspan died in office he’d put sunglasses on him and prop him up in his chair. Bernanke wanted to do things differently and develop the profile of the institution, not the man.
Times have forced a change.
The world faces the greatest economic challenge since the Great Depression. Poor management will cause further collapses and leave the global economy stagnant for years. The rapid fall-out and global spread of the recession have taken all by surprise. Coordinated, rapid action is mandatory to stave off a downward spiral.
Yet the issues are complex and the solutions hard to understand. Greenspan once famously said, “if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.” President Barack Obama has his entire reputation riding on the perceived efficacy of his actions. Trillions have been spent trying to stabilise financial systems and auto manufacturers. It needs to work - and it needs to be perceived to work.
Yesterday Bernanke gave a speech in Atlanta at Morehouse College. Here he devolved into a primer on the economy and explained the basic fundamentals. After he sat with students and took questions. The speech and the discussion were broadcast on national television.
The lesson for corporate communications is clear. Financial matters are a challenge for most consumers to understand. “Dumbing down” is not always an option - while it may be simple to explain a term deposit in a 30 second advertisement, you can’t squeeze plans for global economic rescue into so short a space. So instead Bernanke is trying to “smarten up” the populace. He’s taking every opportunity to explain to the American people what is happening and how the Reserve Bank’s actions are helping.
Today “The Australian” covers this and more under the title “Bernanke’s PR Rewrites Fed Script.”
April 6, 2009 at 4:21 pm · Filed under Globalisation, Workplace
The French are…different. When there’s a dispute at work it’s quite acceptable to kidnap the boss. This month the head of Sony France was held captive - as was a colleague - as staff were upset over benefits. There’s a pleasant photo in “The Economist” of him sitting in his a meeting room in shirt and tie dining on take-away. Apparently he was treated humanely. They gave him Internet connection so he could update his Facebook status (”Je demande liberte!”).
Apres La Revolution: Sony employees locked Sony France execs Serge Foucher and Roland Bentz in a meeting room for a night because they were upset about getting fired and not getting the same relocation package as other workers. After the CEO agreed to continue negotiations, the workers set him free. (Source: CrunchGear)
It appears “le kidnapping” is a popular technique “en France”. It’s seen as a useful way to demonstrate disappointment in management’s actions. It’s hard to imagine, though, what the first “All Staff Meeting” is like after the boss is let free…?
April 2, 2009 at 12:41 pm · Filed under America, Globalisation
Like everyone else, we’ve started economising at home. We swapped to a lower-cost grocery store and sold the second car. We’ve always used left-overs - now there are fewer of them because we’re trying to cook only what we need. I’ve given up the cup of coffee bought downstairs every morning. And I swapped bus routes because the new one is $8.00 cheaper a week.
These are minor changes compared to the sacrifices made during The Great Depression. “The New York Times” includes a series of interviews with people who survived those tought times. I thought we were doing it tough until I read this great article:
“In the winter the chickens would come up under the house and sit in the basement, so if we wanted a chicken we’d raise a plank up and reach down and get the chicken.” Thomas Moon, 87
Read the article - I heartily recommend it.
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