PR - Crisis and Management

Tuesday, February 28, 2006

Ronald McDonald: Slave Owner?

Slavery under the golder arches? It was discovered in January that fast food giant, McDonald's buys its tomatoes through at least one convicted slaver. This has become a crisis PR fiasco because McDonalds has been avoiding dealing with severe human rights abuses that may be hidden within its supply chain.

The Coalition of Immokalee Workers (CIW) is a community group from Southern Florida representing thousands of farmworkers which in the past 9 years has uncovered, investigated and helped to prosecute six separate slavery cases. Last November, CIW asked McDonald's to partner with them in confronting the violence and subpoverty wages of modern-day farm labor. McDonald's made a smart public relations decision when they decided to join forces with CIW and start working to end the extreme injustice in farm labor. It appeared to consumers that McDonald's was being socially aware and working towards improving the standards of farm labor.

So everything seemed to be going well but a PR crisis was brewing behind the scenes. In 1999, farm labor contractor Abel Cuello was sentenced to only 33 months in prison for enslaving 27 people in trailers on his property. Cuello was employeed by Ag-Mart farms at the time which just happens to be the company where McDonalds buys it tomatoes. Although it would occur to any practical person that McDonald's should stop purchasing tomatoes from a convicted slaver, they didn't. According to Florida state law, a farm contractor can return to the fields just 5 years after being convicted, and thats just what Cuello did.

McDonald's continued to buy their tomatoes from Ag-Mart even after Cuello was convicted. Also, last year Ag-Mart received notice of 457 pesticide violations from North Carolina and Florida agricultural officials . The investigation included the pesticides causing severe birth defects in three babies born to its farmworkers. Despite that McDonalds continues to buy tomatoes through Ag-Mart. Even the notoriously anti-labor Wal-Mart has reacted by terminating its tomato purchases from Ag-Mart.

The main public relations portion of this case revolves around McDona'ds civil duty to use its market power, as a fast food giant, to work against injustices such as those found in farm labor. According to Alternet.com, farmworkers must pick two tons of tomatoes, literally 4,000 pounds , to earn just $50 in a day. They regularly work 10- to 12-hour days with no overtime pay, no right to organize, no sick days and no benefits whatsoever.

Instead of not buying from Ag-Mart, McDonalds now supports an initiative controlled by growers called Socially Accountable Farm Employers, deceptively abbreviated "SAFE".

Wednesday, February 22, 2006

Wait...McDonald's isn't healthy for you?


Much to the surprise and dismay of french fry lovers around the world, McDonalds has announced in 2001, that their french fries aren't healthy for you. Wow...what a shock. In repsone to the filing of a class-action lawsuit by angry vegetarians, McDonald's confirmed that its French fries are prepared with beef extract, a disclosure the company said is not new.

Since 1990, McDonalds has been telling consumer that their fries are cooked in pure vegetable oil,. However, company spokesman Walt Riker said that McDonald's never said its fries were "appropriate for vegetarians and always told customers that their flavor comes partly from beef".

A class action suit has been filed for ''emotional distress'' caused to vegetarians, some of them vegetarian for religious reasons, who thought McDonald's fries were in line with their strong feelings about not eating meat.
The list of French-fry ingredients that McDonald's offers at its franchises and on its Web site includes potatoes, partially hydrogenated soybean oil and ''natural flavor.'' The list does not mention that the ''natural flavor'' comes from beef.

Harish Bharti, the Seattle lawyer who filed the suit against McDonald's Tuesday, said the confirmation that the company uses beef extract to flavor its fries validates his case. Bharti argues that a reasonable person who heard that McDonald's fries are prepared in ''100 percent vegetable oil'' and read the list of ingredients would assume the food is suitable for vegetarians. When asked why the company simply did not write ''beef extract'' on its list of ingredients, he replied, ''It's a good question. We're sensitive to all our customers' needs and concerns. We try to be as forthcoming and user-friendly as possible. We'll review it. We'll take a look at it.''

Bharti said McDonald's contention that the information was available to people if they had only asked is insulting. "Not only did they deceive these people,'' he said. ''Now they are claiming that all these people were deceived because they were stupid. This adds insult to injury.''

Although this incident happened 5 years ago, McDonalds is in the news again for decieving consumers. Debra Moffat, a mother of four in her mid-forties is suing the fast-food chain for failing to disclose that their french fires contain gluten. Moffat is gluten intolerant, a condition called celiac disease that affects one out of every 133 Americans. Moffat is not the first person to sue a fast food chain for not warning about gluten in their fries. Two other people in California and Florida are also suing McDonald's for similar reasons. A local judge is expected to decide next week whether to accept the case as a class-action suit, which would allow hundreds or perhaps thousands of people to join the lawsuit as plaintiffs. No spokesperson for McDonald's was available for comments late Monday.

Tuesday, February 21, 2006

Price gouging after Katrina


Hurricane Katrina was the nation's costliesr natural disater in history. It will be months, or even years , before the cost of Hurricane Katrina is fully known, estimates agree losses will far exceed $100 billion. While the total costs of the tradegy aren't known, recent reports have found that the government might be paying more than needed.

After the hurricane, there were hundreds of thousands of Katrina evacuees living in temporary shelters and/or trailer parks set up by FEMA and other relief organizations in the first months after the disaster hit. Other evacuees were put up in hotels all around the country. Recent reports show there may have been fraudulent behavior on the behalf of several hotels which became a second home to evacuees.

The Federal Emergency Management Agency paid hotels around the country to house evacuees. FEMA paid anywhere from $375-$438 a night in cities such as New York City and Chicago, only to later find that those were not the going rates for the hotel rooms. All in all, FEMA rented 773 rooms for more than $150 a night at a total cost of $147, 935. Congressional committee testimony that luxury hotels billed the federal government up to $438 a night for evacuees raised the prospect of a potential price-gouging investigation.

Official from the hotels involved claim that the rates were accurate because the hotels were high season and they didn't know how long the evacuees would be staying. Several hotels didn't return calls seeking comments on the issue. In terms of public relations, this story is negative PR for all of the hotels involved because they will be viewed as taking advantage of an emergency situation involving innocent victims.

Monday, February 20, 2006

Priceline - name your price and you'll "pay"


Nothing is more frustrating than dealing with a customer service hotline. Just ask concert pianist Ronnie Segev. Last summer he was charged $953 by Priceline for a plane ticket he claims he didn't buy. He said that he would be willing to pay only $500 but when his search for the tickets came back, the only tickets avaliable were over $900. He claims that he didn't purchases them but http://www.priceline.com/ claim that he did. When Segev called the company up and asked for his money back and they refused, he called and asked again. And then again. And again. And again. Segev called 215 times to be exact because he was unable to reach an actual operator. After the 215th time, Priceline reported Segev to the NYPD for 215 counts of harassment.

The company even went so far as to claim in court that they had to switch to an automated customer-service system in response to Segev's 215 calls. A judge did later dismiss the charges, but the public relations damage was done. Segev had already spent 40 hours in holding cell and is now ready to sue Priceline. Segev still hasn't gotten his money back, though he has just filed suit against Priceline for malicious prosecution.

In terms of crisis public relations, Gothamist.com had this to say about the incident, "Priceline needs to get their priorities in order though, as this is just the kind of story a company like that should be perfectly happy to pay to shut up. Because if they don't, you get consumers like us who are now pretty sure we're not going to be using Priceline again anytime soon..."

Thursday, February 16, 2006

Cheney reacts to shooting incident

In the days following the release of the Dick Cheney shooting incident, much criticism has been voiced on how the adminstration and Cheney's camp handled the situation. Cheney is under intense political pressure to discuss the accident which has become a public relations nightmare and a political liability for the White House.

Cheney has taken full blame for shooting his hunting companion, saying "I'm the guy who pulled the trigger and shot my friend", but has been defiantely unapologetic about not publicly disclosing the accident until the next day.

Cheney is standing behind his position that releasing the story to the Corpus Christi Caller Times before realsing it to major media outlets was the right move. Cheney said in a public statement, "I had a bit of the feeling that the press corps was upset because to some extent, it was them - they didn't like the idea that we called the Corpus Christi Caller-Times instead of the New York Times...but it strikes me that the Corpus Christi Caller Times is just as valuable a news outlet as the New York Times is, especially for covering a major story in South Texas".

In terms of when the story was released, Cheney says he was that concerned that if the story broke Saturday night that information would have been inaccurate. Cheney said White House press secreatary Scott McClellan and communications strategist Bartlett urged him to get the story out quickly, but he ultimately made the decision on how to handle the media.


Scott McClellan

Tuesday, February 14, 2006

Vice President shoots hunting companion

The last time a Vice President was involved in a shooting was when Aaron Burr fatally shot Alexander Hamilton in 1804. They both shot someone while they were sitting Vice-Presidents. Fortunately for Mr. Harry Whittington, whom Mr. Cheney accidently peppered with shot during a hunting trip, being shot by the vice-president ended better for him than it did for Alexander Hamilton, who was shot by Mr. Burr during a duel.

Vice President Dick Cheney has made headlines lately after what can only be called a public relations disaster for the avid hunter who regularly shoots. The US Vice-President shot and wounded Harry Whittington, a 78-year-old millionaire lawyer from Austin, at a ranch in South Texas. In terms of how Cheney's camp handled the incident, Lea Anne McBride, Mr Cheney’s spokeswoman, said that he “was pleased to see that he’s doing fine and in good spirits” after Saturday’s accident. While this statement was overall well put together as far as crisis public relations goes, the Vice-President’s office did not disclose details of the incident for nearly 24 hours. This lack of public relations tact has me wondering, "What were they thinking?" The vice president of the United States shoots a man, accidentally, and White House officials wait a whole day and don't tell the press? Did they think it wouldn't get out? No one would care? It would remain secret as a matter of national security? Granted Whittington is currently in stable condition at Corpus Christi Hosptial, but Cheney should have immediately disclosed the accident. After the main media got wind of the incident, they had a field day! This is what the New York Times had to say:

"The White House sought with little success on Monday to quell an uproar over why it took the better part of a day to disclose that Vice President Dick Cheney had accidentally wounded a fellow hunter in Texas on Saturday and why even President Bush initially got an incomplete report on the shooting...Scott McClellan, the White House press secretary, was battered at his daily news briefing by journalists demanding answers to why Mr. Cheney had not been faster to make public what happened and why he had chosen a local newspaper in Texas as his vehicle for doing so. The pressure came in part from questions about whether Mr. Cheney, who is already known for his inclination to keep his business, professional and political dealings behind closed doors, might have been trying to play down the incident, a suggestion rejected by those who were with Mr. Cheney over the weekend" (NYT.com).

All in all, this crisis has just begun. Democrats, gun control activists and critics of the Bush administration are using this incident to further their own causes while leaving Cheney in a public relations nightmare which won't soon end.

What is Crisis PR?

Public relations has many definitions. Rex Harlow, a pioneer public relations educator who founded what would become the Public Relations Society of America (PRSA) defines public relations as a "distinctive management function which helps establish and maintain mutual lines of communication, understanding, acceptance, and cooperation between an organization and its publics; involves the management of problems or issues; helps management keep informed on and responsive to public opinion; defines and emphasizes the responsibility of management to serve the public interest; helps management keep abreast of and effectively utilize change, serving as an early warning system to help anticipate trends; and uses research and sound ethical communication techniques as its principal tools".

Crisis public relations deals with high profile events such as accidents, terrorist attacks, disease pandemic, and natural disasters. Major crises such as these can dwarf even the best conflict positioning and risk management strategies. Some general rules of how to communicate during a crisis include:
  • Put the public first
  • Take responsibility for solving the problem
  • Be honest. Don't obscure facts and try to mislead the public
  • Never say "No comment" because most people feel that means that the organization is guilty of wrongdoing
  • Designate a single spokesperson
  • Set up a central information center
  • Provide a constant flow of information because when information is withheld, the cover-up becomes the story
  • Be familiar with media needs and deadlines
  • Be accessible
  • Monitor news coverage and telephone inquiries
  • Communicate with key publics

An estimated 90% or organizational crises are caused by internal operational problems rather than by unexpected natural disasters. Research is important in crisis public relations because it can often uncover trouble spots and public concerns before they become first page news.