Nightmare for Dreamliner Part 2: Japan

January 16, 2013

Dreamliner

As noted in a previous post, it does take time to work out technical problems. As aviation analyst Brendan Sobie stated: “There are always teething problems with new aircraft and airlines often are reluctant to be the launch customer of any new airplanes. We saw it with other airplane types, like the A380 but the issues with the A380 were different.” But the situation has been getting worse for Boeing and its Dreamliner with each passing day. On January 16, 2013, pilots smelled something burning and executed an emergency landing of a Boeing 787 in Japan. One person suffered minor injuries while using an exit ramp. The two Japanese airlines that use the Dreamliner both voluntarily pulled the planes from service for further investigation. Below are the announcements from All Nippon Airways (ANA) and Japan Airlines.

[Apology] Operation of ANA692
ANA 692 from Yamaguchi Ube to Haneda, Boeing 787, made an emergency landing at Takamatsu Airport at 8:47 (JST) on Wednesday, 16 January due to technical problem. All 137 passengers and crew were evacuated safely from the aircraft. The event was registered as a serious incident by Ministry of Land, Infrastructure, Transport and Tourism (MLIT). ANA will cooperate fully with the Japan Transport Safety Board, relevant authorities and Boeing to investigate the cause of the incident. All ANA flights operated by Boeing 787 have been cancelled and ANA’s fleet of 787 aircraft will remain grounded further notice.
We sincerely apologize to people concerned for the inconvenience and concern caused by this incident.
Please check your flight status here.
January 16, 2013
All Nippon Airways Co., Ltd.
Inquiries
Please contact ANA International Reservation and Information Center in your respective area.

Apology and Notice: Regarding JAL´s Operations of the 787-8 Aircraft
In response to an incident involving a 787-8 aircraft operated by another airline on January 16, 2013, JAL decided to cancel the operations of our fleet of 787-8 departing Japan the same day and January 17, 2013 to ensure complete safety. Operations of JAL´s 787-8 aircraft from January 18, 2013 will be decided after further assessment of the situation with the investigations.
We sincerely apologize to all customers and related-parties for the inconvenience and concerns caused.
Safety is of utmost importance to Japan Airlines and we ensure that every departing aircraft meets all safety standards before flight operations. Please be assured on your future travel with us.
For the operational status of affected flights, please refer to the following website for the latest updates.
January 16, 2013
Japan Airlines

Boeing’s response was “Boeing is aware of the diversion of a 787 operated by ANA to Takamatsu in western Japan. We will be working with our customer and the appropriate regulatory agencies.”
Below are other statements Japan Airlines has made as a result of problems with the Dreamliner:

Apology and Notice: Cancellation of Flight JL007 on January 7, 2013
On January 7, 2013 (local time), after JL008 arrived at Boston Logan International Airport from Tokyo (Narita) and after all passengers and crew members had disembarked the aircraft, smoke was detected in the aft section of the aircraft’s cabin. The fire department was called and a fire found to be from the auxiliary power unit battery located in the aft electronics bay (outside of the cabin) was extinguished. The outbound flight JL007 scheduled to depart that day was consequently cancelled. The cause of the incident is currently being investigated and additionally, subsequent to the event, Japan Airlines initiated and completed inspections on all other Boeing 787 aircraft in its fleet the following morning and found no irregularities.
We sincerely apologize for the concern and inconvenience caused to our valuable customers.
Safety is of utmost importance to Japan Airlines and we will continue striving to ensure safe operations of each and every flight, and on all our aircraft types including the 787 Dreamliner. Please be assured on your future travel with us.

January 10, 2013
Japan Airlines

Apology and Notice: Delay of Flight JL007 on January 8, 2013
On January 8, 2013 (local time), flight JL007 was preparing for take-off after departing Boston Logan International Airport bound for Tokyo (Narita), when a fuel system trouble required the aircraft to return to the gate. Necessary maintenance was performed on the aircraft and after ensuring that flight operations were safe, JL007 was cleared for departure and departed Boston 3 hours and 46 minutes later than scheduled at 3.46p.m. (East Coast Time). The flight arrived at Tokyo (Narita) on January 9, at 7.31 p.m. (Japan Standard Time). The cause of the fuel system trouble is currently being investigated.
We sincerely apologize for the concern and inconvenience caused to our valuable customers as a result of this mechanical issue.
Safety is of utmost importance to Japan Airlines, and we will continue striving to ensure safe operations of each and every flight and with all aircraft types including the 787 Dreamliner. Please be assured on your future travel with us.

January 10, 2013
Japan Airlines

Apology and Notice:
January 13, 2013: Aircraft Undergoing Maintenance Encounters Fuel System Trouble
On January 13, 2013, a Boeing 787-8 aircraft that had a fuel system trouble in Boston Logan International Airport on January 8, 2013, was at Narita Airport undergoing maintenance as part of inspections for that case when a different fuel system trouble occurred. This aircraft is not scheduled to be in service today and there are no effects on other flight schedules. The cause of the two cases is currently being investigated.
We sincerely apologize to our customers and all related parties for the inconvenience and concerns cause.
Safety is of utmost importance to Japan Airlines and we will ensure that every departing aircraft including the Boeing 787-8, meets all safety standards before flight operations. Please be assured on your future travel with us.

January 13, 2013
Japan Airlines

Questions to Consider

1. How have the recent events in Japan changed the situation for Boeing? What theories can be used to explain that change?
2. How would you rate the effectiveness of the response by ANA? What is the basis for your evaluation?
3. How would you rate the effectiveness of the response by Japan Airlines? What is the basis for your evaluation?
4. How would you rate the effectiveness of the response by Boeing? What is the basis for your evaluation?
5. How might the exists of multiple events for Japan Airlines created new demands for their crisis response?
6. Is there still any value in using experts saying problems are common with new planes in the risk communication for this case? Why or why not?


Cantaloupe III: Blame and Punishment

October 20, 2011

Cantaloupe III:  Finding Blame

As of October 18, 2011, the listeria outbreak in 26 states had been linked to 25 deaths and 123 people being infected.  Of course the number of infected is probably much higher because food-borne illnesses are unusually underreported because people think it might just be the flu.  The fallout from the investigation is starting to become clearer.  As anticipated in an earlier blog, the cantaloupe industry is feeling the effects of the outbreak not just Jense Farms the source of the outbreak.  Consumers have begun to fear cantaloupe and are avoiding eating it.  Growers in the Rocky Ford area of Colorado have seen the clearest sense of guilt by association.  Jensen Farms used the name Rocky Ford for its cantaloupes even though the farm is 90 miles from the area.  People here Rocky Ford and think dangerous melons.  And the crisis could linger, as one news story reported:  “Eric Hanagan, a farmer in the Rocky Ford region, fears cantaloupe sales will drop next year and plans to plant about 50 percent less, replacing it with a lower-income crop like corn. Still, he said he wasn’t angry at Jensen Farms.”  

Farmers in California and Arizona are feeling the effects of dropping sales as stores pull cantaloupe regardless of its origin.  Stores simply believe customers are too afraid to buy the fruit.  Here is one description of the situation facing California growers:

“On an October day in the midst of harvest season, two farmworkers sat idly in their home in a Central California town that touts itself as ‘the cantaloupe center of the world.’

Instead of picking the melons and supervising a work crew, Dora and David Elias of Mendota were unemployed—laid off along with hundreds of others as the cantaloupe listeria outbreak traced to Colorado rippled across the nation.

The pangs were particularly felt here in the top cantaloupe-producing state. Sales of California cantaloupes plummeted, even though their fruit was perfectly safe to eat. Farmers abandoned fields. Farmworkers lost jobs.

‘We can’t sell the fruit,’ said Rodney Van Bebber, sales manager for Mendota-based Pappas Produce Company. ‘Retail stores are taking cantaloupes off the shelves, and growers are disking in their fruit because people are afraid to eat them.’”

The news has not improved for Jensen Farms either.  The initial report from the Food and Drug Administration points to sanitation issues at the farm.  When people here there was lack sanitation, they will begin to place greater blame for the crisis on the people operating Jensen Farms even though there are not specific violations of regulations.  Here is the FDA preliminary statement that appeared online and in news stories:

FDA Publishes Report on Factors Potentially Contributing to the Contamination of Fresh, Whole Cantaloupe Implicated in the Multi-State Listeria monocytogenes Foodborne Illness Outbreak

On October 19, 2011, FDA released a document which provides an overview of factors that potentially contributed to the contamination of fresh, whole cantaloupe with the pathogen Listeria monocytogenes, which was implicated in a 2011 multi-state outbreak of listeriosis. In early September 2011, the Food and Drug Administration (FDA), in conjunction with the Centers for Disease Control and Prevention (CDC) and state health departments, began to investigate a multi-state outbreak of listeriosis. Early in the investigation, cantaloupes from Jensen Farms in the southwest region of Colorado were implicated in the outbreak. 

On September 10, 2011, FDA, along with Colorado state officials, conducted an inspection at Jensen Farms during which FDA collected multiple samples, including whole cantaloupes and environmental (non-product) samples from within the facility, for laboratory culturing to identify the presence of Listeria monocytogenes. Of the 39 environmental samples collected from within the facility, 13 were confirmed positive for Listeria monocytogenes with pulsed-field gel electrophoresis (PFGE) pattern combinations that were indistinguishable from three of the four outbreak strains collected from affected patients. Cantaloupe collected from the firm’s cold storage during the inspection was also confirmed positive for Listeria monocytogenes with PFGE pattern combinations that were indistinguishable from two of the four outbreak strains.

As a result of the isolation of outbreak strains of Listeria monocytogenes in the environment of the packing facility and whole cantaloupes collected from cold storage, and the fact that this is the first documented listeriosis outbreak associated with fresh, whole cantaloupe in the United States, FDA initiated an environmental assessment in conjunction with Colorado state and local officials. FDA, state, and local officials conducted the environmental assessment at Jensen Farms on September 22-23, 2011. The environmental assessment was conducted to gather more information to assist FDA in identifying the factors that potentially contributed to the introduction, growth, or spread of the Listeria monocytogenes strains that contaminated the cantaloupe. 

FDA identified the following factors as those that most likely contributed to the introduction, spread, and growth of Listeria monocytogenes in the cantaloupes:

Introduction:

  • There could have been low level sporadic Listeria monocytogenes in the field where the cantaloupe were grown, which could have been introduced into the packing facility
  • A truck used to haul culled cantaloupe to a cattle operation was parked adjacent to the packing facility and could have introduced contamination into the facility

Spread:

  • The packing facility’s design allowed water to pool on the floor near equipment and employee walkways;
  • The packing facility floor was constructed in a manner that made it difficult to clean
  • The packing equipment was not easily cleaned and sanitized; washing and drying equipment used for cantaloupe packing was previously used for postharvest handling of another raw agricultural commodity.

Growth:

  • There was no pre-cooling step to remove field heat from the cantaloupes before cold storage. As the cantaloupes cooled there may have been condensation that promoted the growth of Listeria monocytogenes.

FDA’s findings regarding this particular outbreak highlight the importance for firms to employ good agricultural and management practices in their packing facilities as well as in growing fields. FDA recommends that firms employ good agricultural and management practices recommended for the growing, harvesting, washing, sorting, packing, storage and transporting of fruits and vegetables sold to consumers in an unprocessed or minimally processed raw form. 

FDA has issued a warning letter to Jensen Farms based on environmental and cantaloupe samples collected during the inspection. FDA’s investigation at Jensen Farms is still considered an open investigation.

Jensen Farms’ Recall

Jensen Farms voluntarily recalled1 its whole cantaloupes on Sept. 14 in response to the multi-state outbreak of listeriosis. Cantaloupes from other farms have not been linked to this outbreak.

FDA has successfully audited the majority of Jensen Farms’ direct and secondary accounts. The recalled cantaloupes were produced from the end of July to September 10, 2011. Given that the Jensen Farms’ recall has been in effect for more than a month and that the shelf life of a cantaloupe is approximately two weeks, it is expected that all of the recalled whole Jensen Farms cantaloupes have been removed from the marketplace.

FDA has verified that the following states received recalled cantaloupes directly from Jensen Farms: Arizona, Arkansas, Colorado, Idaho, Illinois, Indiana, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Wisconsin and Wyoming. There is no indication of foreign distribution. 

Consumer Safety Information

Listeria can grow at refrigerator temperatures, about 40 Fahrenheit (4 Celsius). The longer ready-to-eat refrigerated foods are stored in the refrigerator, the more opportunity Listeria has to grow.

It is very important that consumers clean their refrigerators and other food preparation surfaces. Consumers should follow these simple steps:

  • Wash hands with warm water and soap for at least 20 seconds before and after handling food.
  • Wash the inside walls and shelves of the refrigerator, cutting boards and countertops; then sanitize them with a solution of one tablespoon of chlorine bleach to one gallon of hot water; dry with a clean cloth or paper towel that has not been previously used.
  • Wipe up spills in the refrigerator immediately and clean the refrigerator regularly.
  • Always wash hands with warm water and soap following the cleaning and sanitization process.                           

FDA advises consumers not to eat the recalled cantaloupes and to throw them away. Do not try to wash the harmful bacteria off the cantaloupe as contamination may be both on the inside and outside of the cantaloupe. Cutting, slicing and dicing may also transfer harmful bacteria from the fruit’s surface to the fruit’s flesh.

Listeriosis is rare but can be fatal, especially in certain high-risk groups. These groups include older adults, people with compromised immune systems and unborn babies and newborns. In pregnant women, listeriosis can cause miscarriage, stillbirth, and serious illness or death in newborn babies, though the mother herself rarely becomes seriously ill. A person with listeriosis usually has fever and muscle aches. Persons who think they might have become ill should consult their doctor.

For more information on the epidemiologic investigation, please refer to CDC’s Investigation on the Multi-State Listeriosis Outbreak2.

Questions to Consider

1.  What might the unaffected producers do to protect themselves from the crisis and why might those actions be helpful?

2.  Why should the FDA report intensify the crisis for Jensen Farms?

3.  Is it fair for stores to remove cantaloupe from their shelves?  How can they justify such actions?

4.  What role does the number of deaths and infections do to keep the crisis alive?

5.  What actions should Jensen Farms be taking at this point to address the crisis?  How would those actions be related to risk communication? 

6.  How should the crisis effect the discussion of food safety in the US?


Wal-Mart China “Pork Scandal”: When Pork is not “Green”

October 16, 2011

Employees of a Wal-Mart in Chongqing, China were accused of mislabeling pork as organic.  The pork was not organic and should have been considered “green.”  Two employees were arrested, another 25 detained, and seven confined to their homes.  A total of 13 Wal-Mart stores were temporarily closed in the area.  Wal-Mart opened stores in Chongqing in 2006 (Wal-Mart has been in China since 1996) and has been 21 times in that area for selling uninspected or expired food and false advertising.  As one analysts observed:  “Wal-Mart has a record of other incidents related to its credibility in China and not in Chongqing alone.  The latest incidents added even more pressure on Wal- Mart and drive consumers to its competitors.”

Wal-Mart has been fined 3.65 million yuan for ($574,000) for the mislabeling.  That is five times the value of the mislabeled pork that was sold.  This may seem like an extreme reaction for mislabeling pork as organic.  However, this crisis is set against the backdrop of some very serious food scandals in China including banned additives in pork, dyed buns, hormone injected watermelons that exploded, and the melamine-tainted dairy products in 2008 that killed six children.  Wal-Mart is not responsible for any of those problems but the number and severity of the tainted food concerns has raised food safety as a “hot” issue in China.  Western firms have come under very close scrutiny over food issues due to this increased government vigilance.  Some claim even closer scrutiny that Chinese firms:

“Foreign supermarkets get targeted more for this,” said Paul French, founder of Shanghai-based market research company Access Asia. “I am sure Chinese supermarkets do it too but they have a level of protection at the moment from the government that does not want too many scandals among local food-related companies after the bad formula, tainted milk and endless scandals.”

The Chinese consumer market is massive.  Wal-Mart wants to be a part of that market to increase its profits.  However, Wal-Mart faces strong competition from other competitors including China’s Sun Art, China Resources Enterprise, Tesco (UK brand), Metro (German brand), and Carrefour (French brand).  Wal-Mart is second in Chinese market share but Carrefour is close behind.  Mis-steps such as the pork scandal could allow Carrefour and others to overtake Wal-Mart in China.

Here is Wal-Mart’s initial statement on the situation:

SHENZHEN, China—Walmart China issued a statement regarding recent store closures in China. The company was ordered to close several stores in Chongqing because of the mislabeling of pork products. The Chongqing Administration of Industry and Commerce says Walmart mislabeled regular pork as “green,” or organic, pork.

The statement follows:

“We were officially directed earlier today by the Chongqing Administration of Industry and Commerce (AIC) to temporarily close some of our stores in Chongqing for a period of 15 days.

We believe the closure has come about as a result of a recent investigation in some of our stores in Chongqing due to the “green pork” incident by which the rights of consumers were infringed.

We have fully cooperated with the investigation and focused upon the fastest implementation of corrections suggested by the local AIC. Some Walmart associates have been detained by the Chongqing Public Security Bureau (PSB). Walmart China is cooperating fully with the PSB and doing everything possible to conclude the investigation.

A taskforce from Walmart China headquarters was sent to Chongqing to work closely with the respective stores and the local officials of the AIC immediately after notification of the investigation several days ago. They are leading the Walmart commitment to ensuring our stores in Chongqing follow Walmart’s strict inspection and management policies and taking all necessary steps to ensure this does not recur. Walmart is committed to protecting the rights of consumers and will spare no efforts in this regard.

The closure of the stores in Chongqing for the next 15 days will allow us time to focus on implementing corrective actions.

Walmart is an important part of the Chongqing community, and we care deeply about the well being of the community with over 3000 of our own associates living and working in Chongqing. We are deeply sorry for the inconvenience this may cause our customers and are even more determined to meet the service expectations they have of us.”

Questions to Consider

1.  Based upon SCCT, what type of crisis is Wal-Mart facing in China?  What evidence lead you to that conclusion?

2.  Based upon SCCT, evaluate Wal-Mart’s initial crisis response.  Did it fit with the prescriptions from SCCT?  Why or why not?

3.  Does it matter that Western brands get closer scrutiny about food safety in China that local brands?

4.  What impact will Wal-Mart’s past violations have on the current crisis and why?

5.  What other advice would you give Wal-Mart about responding to this crisis and why?

6.  What makes this situation a crisis for Wal-Mart?  For consumers in China?

7.  What role might risk communication play in this situation?


Cantaloupe Crisis to Linger: Incubation and Litigation

September 29, 2011

It would seem quick to follow up on the cantaloupe post from yesterday but there are still some additional points to consider and information continues to roll in about the crisis.  It is odd for listeria to be found in a fruit, in fact it is the first ever listeria outbreak associated with cantaloupe.  Listeria is associated with processed meat, cheese, and milk.  Listeria can take up to two months to incubate.  That means more cases, and possible deaths, can keep appearing for weeks.  Each new case has the potential to extend the crisis and traditional and social media keep reporting on the events.

Jensen Farms remains at the center of the crisis as their cantaloupe are the cause of the outbreak.  However, there are gaps in the information about where the infected cantaloupe had been shipped.  Consider the following news item:

“Neither the government nor Jensen Farms has supplied a list of retailers who may have sold the fruit. Officials say consumers should ask retailers about the origins of their cantaloupe. If they still aren’t sure, they should get rid of it.

Jensen Farms of Holly, Colo. says it shipped cantaloupes to 25 states, though the FDA has said it may be more, and illnesses have been discovered in several states that were not on the shipping list. A spokeswoman for Jensen Farms said the company’s product is often sold and resold, so they do not always know where it went.

The recalled cantaloupes may be labeled ‘Colorado Grown,’ ‘’Distributed by Frontera Produce,’ ‘’Jensenfarms.com’ or ‘Sweet Rocky Fords.’ Not all of the recalled cantaloupes are labeled with a sticker, the FDA said. The company said it shipped out more than 300,000 cases of cantaloupes that contained five to 15 melons, meaning the recall involved 1.5 million to 4.5 million pieces of fruit.”

Officials are still working to track down the cause of the outbreak.  As one news story noted:

“Government investigators are continuing to search for the root cause of the outbreak, examining the possibility of animal or water contamination as well as the farm’s harvesting practices.”

Doubt will linger about the product’s safety until the root cause can be found.  Until a cause is found, no corrective actions can be taken that will reassure customers that the same event will not be repeated. 

Uncertainty is a part of crises but no identified cause coupled with no clear list of retailers generates great uncertainty for customers.  This uncertainty is captured the following comment from the CDC:

“If it’s not Jensen Farms, it’s OK to eat,” said Thomas Frieden, director of the CDC. “But if you can’t confirm it’s not Jensen Farms, then it’s best to throw it out.”

The uncertainty creates problems for all cantaloupe growers.  People become fearful of the product and avoid all cantaloupe.  Such was the situation in 1991 when Texas cantaloupe was associated with a salmonella outbreak.  California cantaloupe growers experienced a drop in sales too as customers just new “cantaloupe” was dangerous and was not differentiating between Texas and California cantaloupe.  In 1992, the Cantaloupe Advisory Board in California reduced its promotional spending believing a low profile would help people to forgive the health scare from 1991.  Other Colorado growers are concerned about the effects on their sales:

Local farmers are worried about cantaloupe sales after a Colorado farm says listeria has been found in some of its fruit. The new developments have prompted a recall of the fruit from Jensen Farms in melon-rich area of Rocky Ford.

Thursday’s recall most likely means a slow down in sales for local farmers, too. And, with melon season heating up for some on the Western Slope, it couldn’t have come at a worse time.

“It can be devastating if it’s in some of your major items,” Farmer Robert Helmer said of a produce recall.

Another factor that helps crises to linger are lawsuits.  Lawsuits can bring media attention and do involve financial costs.  More families are initiating lawsuits against Jensen Farms.  Here is sample of the media coverage from one lawsuit

Herbert Stevens of Littleton, Colo., bought half of a Jensen Farms cantaloupe wrapped in plastic at a local grocery store on Aug. 10 and the 84-year-old developed tremors on Aug. 22.

“On the 24th, he got really weak and was in a sitting position and couldn’t get up,” his daughter, Jeni Exley, told ABCNews.com.

Stevens’ wife called 911 and he was taken to a hospital, where doctors discovered he had a fever of 102.7. By the end of the weekend, he had been diagnosed with listeriosis.

Antibiotics destroyed the listeria in Stevens’ body, but he remains weak and it’s unclear when — if ever — he’ll be able to leave the long-term care facility where he’s been living for the past week.

“He is making some progress but still relies on a walker to walk and assistance with activities of daily living,” Exley said.

Prior to contracting the bacteria, Stevens was able to walk without assistance and was in good health. He often took trips abroad with his family, most recently to Sweden.

Right now, however, “He sleeps for most of the day,” said Exley. “This has played havoc with his whole body.”

 

The stories do generate sympathy for the victims given the deadly nature and effects of listeria.

Finally, the Food and Drug Adminstration said the situation is further evidence of teh need for the  Food Safety Modernization Act.

 

Questions to Consider

1.  What else could Jensen Farms do to improve on its crisis communication effort?

2.  How does this case illustrate the constraints that can limit an organization’s ability to respond effectively to a crisis?

3.  What can other producers do to limit the collateral damage from this crisis?

4.  Why does the CDC play such a pivotal role in these types of food borne illness crises?

5.  Jensen’s is considered a family farm.  Why might that be an asset in this crisis?

6.  Does Jensen Farms need to do more to address the lack of information about retailers?  Why or why not?

7.  Is this an appropriate time to push the Food Safety Modernazation Act?  Why or why not?

 


Qantas’s Airbus back in the Air, with its CEO

November 27, 2010

On Nov. 4th 2010, Qantas grounded its fleet of Airbus A330 airplanes due an engine failure.  On Nov. 27, 2010 the Qantas A330s returned to the air on a flight from Sydney to Singapore.  Oddly the problem plane was still in Singapore as part of the ongoing investigation into the event.  On board the plane was Qantas CEO Alan Joyce.  He was flying to prove Qantas had complete faith in the modifications to the Rolls Royce engines that were at the center of the problem and the reason the A330s were grounded by Qantas and few other airlines using the A330s.  In an email, Joyce had told frequent fliers (a key customer segment) that Qantas “will not fly any individual aircraft unless we are completely sure that it is safe to do so”  (http://www.businessweek.com/news/2010-11-26/qantas-ceo-s-a380-flight-caps-textbook-handling.html).  For this particular A330 that was Nov. 27th.  One other A330 was returned to service but four more will still being renovated.  Joyce announced, “We are 100 percent comfortable with it. If we weren’t, we wouldn’t be restarting the operations today.” http://news.yahoo.com/s/ap/20101127/ap_on_bi_ge/superjumbo_woes;_ylt=Aof8l3j1nubYCse3JNPPlpCROrgF;_ylu=X3oDMTJpbTZiYXRrBGFzc2V0A2FwLzIwMTAxMTI3L3N1cGVyanVtYm9fd29lcwRjcG9zAzYEcG9zAzYEc2VjA3luX3RvcF9zdG9yaWVzBHNsawNxYW50YXNhMzgwcmU-

Here is how Qantas explained the return:

“The decision to restore A380 services follows an intensive Trent 900 engine inspection program carried out in close consultation with Rolls-Royce and Airbus. Together with the engine and aircraft manufacturers and the Civil Aviation Safety Authority (CASA), Qantas is now satisfied that it can begin reintroducing A380s to its international network progressively.

Initially, Qantas will operate a single A380 on routes between Australia and the United Kingdom. As more A380s return to service, Qantas will assess when and how best to deploy them” (http://www.qantas.com.au/regions/dyn/au/publicaffairs/details?ArticleID=2010/nov10/5045).

Rolls Royce is managing a part of the crisis.  Stakeholders are concerned about the ability of Rolls Royce to deliver safe and effective airplane engines.  Here are sample crisis messages from Rolls Royce

Nov. 8:

“Rolls-Royce has made progress in understanding the cause of the engine failure on the Trent 900 powered A380 Qantas flight QF32 on 4 November 2010. It is now clear this incident is specific to the Trent 900 engine.

As a result, a series of checks and inspections has been agreed with Airbus, with operators of the Trent 900 powered A380 and with the airworthiness authorities. These are being progressively completed which is allowing a resumption of operation of aircraft in full compliance with all safety standards. We are working in close cooperation with Airbus, our customers and the authorities, and as always safety remains our highest priority.

We can be certain that the separate Trent 1000 event which occurred in August 2010 on a test bed in Derby is unconnected. This incident happened during a development programme with an engine operating outside normal parameters. We understand the cause and a solution has been implemented.

The Trent 900 incident is the first of its kind to occur on a large civil Rolls-Royce engine since 1994. Since then Rolls-Royce has accumulated 142 million hours of flight on Trent and RB211 engines.

We will provide a further update with our interim management statement on 12 November 2010” (http://www.rolls-royce.com/civil/news/2010/101108_trent_900_statement.jsp0.

Nov. 12: 

“Immediately following this incident a regime of engine checks was introduced on the Trent 900s to understand the cause and to ensure safe operation. These have been conducted in parallel with a rigorous examination of all available evidence, including data from the damaged engine and its monitoring system, analysis of recovered material and interrogation of the fleet history.

These investigations have led Rolls-Royce to draw two key conclusions. First, as previously announced, the issue is specific to the Trent 900. Second, the failure was confined to a specific component in the turbine area of the engine. This caused an oil fire, which led to the release of the intermediate pressure turbine disc.

Rolls-Royce continues to work closely with the investigating authorities.

Our process of inspection will continue and will be supplemented by the replacement of the relevant module according to an agreed programme.

These measures, undertaken in collaboration with Airbus, our Trent 900 customers and the regulators have regrettably led to some reduction in aircraft availability. This programme will enable our customers progressively to bring the whole fleet back into service.  

Safety continues to be Rolls-Royce’s highest priority” (http://www.rolls-royce.com/investors/news/2010/121110_interim_mgt_statement.jsp).

The Rolls Royce engine is at the center of the crisis.  Qantas has said it will seek compensation from Rolls Royce for the losses it suffered from grounding the six A330s.  In fact, Qantas has yet to say it will use the A330s on its longest flights, Los Angeles to Sydney.  Those flights require a large amount of fuel.  In turn, the heavy fuel load requires very strong take off thrust.  Qantas is worried that the extra stress from the higher thrust might pose a risk of engine problems. 

Questions to Consider

1.  What crisis response strategies did Rolls Royce use?  How would you rate their effectiveness and why?

2.  What stakeholder expectations did Rolls Royce violate and why was it a problem?

3.  Of the two companies, did either one seem more effective at crisis management than the other?  Justify your answer.

4.  Of what value was having the Qantas CEO on the first flight?  Would you have recommended the actions?  Why or why not. 

5.  To what degree does Qantas not using the A330s on Los Angeles flights cast continuing doubt on Rolls Royce?  What problem does that pose for Rolls Royce?

6.  What might Rolls Royce do to demonstrate confidence in their product?

7.  How does this situation create the need for risk communication by Qantas and Rolls Royce?


Sigg has BPA: Reputation in Peril

October 28, 2009

Sigg Switzerland sells variety of drinking bottles in both sport and children’s models. Most are aluminum with an epoxy liner. Many people buy drinking bottles as alternatives to bottled water for environmental and health concerns. Bottle water is wasteful because of the plastic and is no safer than tap water, in most places. Moreover, there is a concern that chemicals, especially BPA (bisphenol-A) can leach from the plastic into the water. Sigg sales had increases of 250% between 2006 and 2007 was concern over BPA increased. Chemical companies still dispute the dangers of BPA but that is another issue. As early as 2008, there were questions about BPA in the epoxy liners of Sigg bottles. In September of 2009, the company officially acknowledged older liners did contain BPA but denied the BPA could leach into water. This “seemed” to be reversal by Sigg from earlier denials about BPA. However, Sigg maintains the denials were about leaching and that the bottles were always safe. Many in the online community have vocally disagreed http://www.zrecommends.com/detail/siggs-bpa-confession-you-arent-going-to-like-it-any-more-than-we-do/

Here is part of the explanation of the BPA issue offered by Sigg:

“1) What is Bisphenol A (BPA) and how is it generally used? Bisphenol A (BPA) is a chemical building block that is used primarily to make polycarbonate plastics and epoxy resins. Cured epoxy resins are inert materials and have been used as protective liners in metal containers for more than 40 years to maintain the quality of foods and beverages. They have achieved wide acceptance for use as protective coatings because of their combination of toughness, adhesion, formability and chemical resistance. BPA is still used today in the cans of your favorite Cola for example. 2) Did SIGG use BPA in its bottles? Yes. Prior to August 2008, SIGG utilized a water-based epoxy liner that contained a trace amount of BPA. These bottles were thoroughly and regularly tested in the U.S. and Switzerland and all tests revealed absolutely no migration or leaching of BPA or any other substance from the former protective liner. Click here to view tests. 3) Are you still using the water-based, epoxy resin liner in any of your bottles? No. We no longer use this liner at all. Today and since August 2008, we make all of our SIGG bottles with a powder-based, co-polyester liner that we call the EcoCare liner. BPA is not one of the ingredients in the formula of this liner. 4) Are older SIGG bottles that contain BPA safe? Yes. U.S. and worldwide regulatory bodies continue to deem the component safe and independent research has shown that these bottles do not leach. We stand behind the quality and safety of all our SIGG bottles including those with our former liner. 5) How do I know which liner is in my SIGG bottle? If you purchased your SIGG before August 2008, you very likely have the water-based, epoxy resin liner. Consumers can determine their liner type with a quick visual inspection. The EcoCare liner has a dull, pale yellow appearance while the former liner has a shiny copper bronze appearance. Click here for photos.” http://mysigg.com/bulletin/faq.html

The power of online communication is a part of this story. Customers reacted negatively to Sigg’s initial response. They sent e-mails to Sigg, wrote blogs, and sent Tweets on the issue. The customer reflect the perceptual nature of risk. The BPA may not leach from the epoxy but many customers bought Sigg bottles because they wanted to avoid any contact with BPA for themselves or their children using the products. If BPA is there, people can perceive it as a threat and as undesirable.

Eventually the CEO of Sigg issues this “apology”:

“Dear SIGG Customer, (STAMFORD CT) – Last month, I wrote a letter to try and provide you with as much factual and historical information as I could in regards to the evolution of the SIGG bottle liner. I also suggested that people could email me if they had any questions and comments. After reading and responding to hundreds of emails and viewing nearly as many blog & Twitter posts, I realize that my first letter may have missed the mark. What I should have said simply and loudly to all of our loyal SIGG fans is: I am sorry that we did not make our communications on the original SIGG liner more clear from the very beginning. I have learned much over the past 2 weeks. I learned that many of you purchased SIGG bottles – not just because they were free from leaching and safe – but because you believed that SIGGs contained no BPA. I learned that, although SIGG never marketed the former liner as “BPA Free” we should have done a better job of both clearly communicating about our liner as well as policing others who may have misunderstood the SIGG message. For over 100 years, SIGG has earned a reputation for quality products and service – and we do not take that for granted. From the day we made our announcement last month, we made a commitment consistent with SIGG values that we would offer anyone who is concerned about BPA an opportunity to swap their old SIGGs for new SIGGs with the new EcoCare liner. Today, I am announcing that this voluntary Exchange Program will be in place until October 31, 2009 to ensure that our customers have ample time to send their former liner bottles back to us should they choose to do so. Once again, I truly apologize for the lack of clarity in our previous communications. All of us at SIGG hope that we will have an opportunity to regain your confidence and trust. Sincerely, Steve Wasik CEO, SIGG Switzerland” http://www.non-toxickids.net/2009/09/finally-apology-from-sigg-ceo-steve.html#

Sigg has now taken some remedial action to allay fears over BPA in its older products. Again, note how the response recognizes online communication:

“Subject: Our Response to the BPA Issue Date: October 1, 2009 Back in April 2008, the popular blog Tree Hugger ran a story, “Are SIGG Aluminum Bottles BPA Free?” The story ended with: “Conclusion: We are not sure if the lining of SIGG bottles is made with BPA or not, but we like the results of the testing, which is what really matters.” The testing of course showed that SIGG bottles did not leach any chemicals, which we too thought, “is what really matters.” Based on the mail we received this past month, some people disagreed. At the same time, we learned that some people in North America purchased SIGG bottles – not just because they were Swiss-made, beautifully designed and free from leaching – but because they thought SIGGs contained no BPA. We learned that we could have done a better job of more clearly communicating about our liners. We are very sorry for any confusion. To ensure that our North American customers remain completely satisfied with SIGG, we have offered those concerned with our old liner an opportunity to swap their old SIGGs for new SIGGs with the new EcoCare liner. This voluntary exchange program began in August and will run for nearly 3 months expiring on Oct 31, 2009. For more details please see: http://mysigg.com/bulletin/exchange_program.html” http://mysigg.com/bulletin/SIGG_BPA.html

Decades ago, Kenneth Boulding speculated that reputations (he called them images) were fairly stable. He tough smashing a reputation was like smashing an atom—only a direct shot would cause turee harm while glancing shots would simply bounce away. So is the Sigg BPA revelation one of Boulding’s atom smashing reputation strikes? Only time will tell.

Questions to Consider

1. What did the Sigg CEO apologize for and how effective is the response? Be sure to justify your rating of the apology’s effectiveness.

2. Does it matter to the communication efforts if the fear over BPA in the epoxy is irrational? Why or why not?

3. How might insights from risk communication be useful in this situation?

4. What does the CEO’s apology say about Sigg’s online monitoring of its reputation?

5. Why is the composition of the customer base (their values and lifestyles) so critical in this case?

6. How did the online environment help to drive this case? How did Sigg use it in their response?

7. Start from the first blog questioning, what communication recommendations for the BPA in Sigg bottles would you  offer to the CEO?


Tough Time for “Chicken”

September 22, 2009

Case 1:  Chik’n.  Quorn Foods makes a product known as chik’n.  If you have not heard of Quorn Foods or chik’n you probably will soon.  Chik’n is fake chicken that is high in protein.  That protein comes from Fusarium venenatum, a fungus discovered in a field in Buckinghamshire, England back in the 1960s.  Now the problem is not chicken that is fungus though that sounds odd and a bit disgusting.  The problem is that over 1,000 people have reportedly had  allergic reactions to chik’n.  Here is a statement from Quom Foods:

“’Quorn has been in the U.S. market since 2002 and has been enjoyed by millions of Americans. We have developed our labeling with the Food and Drug Administration, and it is accurate and fair.’” http://www.latimes.com/business/la-fi-chicken18-2009sep18,0,5753295.story?track=rss

A lawsuit has been filed against Quorn by The Center For Science in the Public Interest, a watchdog group for food.  Quorn maintains the lawsuit if frivolous. 

Here is how Quorn describes its product:

“All Quorn™ products contain mycoprotein. Mycoprotein (“myco” is Greek for “fungi”) is a nutritious member of the fungi family, as are mushrooms, truffles, and morels. The fungus used in all Quorn™ products is Fusarium Venenatum. There are lots of great things about mycoprotein which very few people know, so here are just a few:

– Mycoprotein is a fungus which contains high-quality protein, enabling us to offer an alternative, purely vegetarian source of protein to meat. It is high quality because it has all 9 essential amino acids.

– Mycoprotein is naturally low in fat.

– Mycoprotein also contains very few calories, so we can bring you foods which deliver on taste but which don’t max out on the calorie content.

– Mycoprotein also contains essential dietary fiber, which as we all know, helps to maintain a healthy digestive system.

– Mycoprotein contains zero cholesterol.

– Mycoprotein is completely meat-free and soy-free.” http://www.quorn.us/cmpage.aspx?pageid=488

Case 2:  KFC grilled chicken.  The Physicians Committee for Responsible Medicine is sing KFC under a California law for failure to warn customers of a carcinogen (cancer causing agent) in its new grilled chicken.  You may remember Physicians Committee for Responsible Medicine from an earlier case.  They are an anti-meat groups that has a few physicians in it.  The chemical is PhIP. 

Here is some information from the Physicians Committee for Responsible Medicine” Physicians Co’s web site:

“PhIP and other HCAs do not exist naturally in chicken; they form when animal muscle is cooked to high temperatures. The National Toxicology Program administered by the National Institutes of Health has identified PhIP as carcinogenic, as have the state of California and the International Agency for Research on Cancer.

But KFC is not the only restaurant serving carcinogen-containing grilled chicken. Last year, PCRM filed suit against McDonald’s, Chick-fil-A, Chili’s, T.G.I. Friday’s, Outback Steakhouse, Burger King, and Applebee’s for knowingly exposing customers to PhIP without warning them of its risks. The suit was brought under California’s Proposition 65, which states that consumers must be warned about products that contain known carcinogens.

The lawsuit is based on tests that found PhIP in 100 grilled chicken samples from the seven restaurant chains. The findings, compiled from independent laboratory tests commissioned by PCRM scientists, were published in the September 2008 issue of Nutrition and Cancer.

Burger King was the first of the restaurants to settle the lawsuit. As part of its agreement with PCRM, Burger King has posted warning signs in its California restaurants to alert customers that its grilled chicken products contain PhIP.” http://www.pcrm.org/newsletter/jun09/carcinogen.html

Questions to Consider

  1.  How might Quorn defend its chik’n?
  2. How might KFC respond to the reports of PhIP in its new chicken?
  3. What are the pros and cons of following Burger King’s lead of posting a warning?
  4. How are both cases examples of risk communication?
  5. Can neither risk be defend as accepted?  Why or why not?
  6. How ethical are the actions of The Center For Science in the Public Interest and Quorn?
  7. How ethical are the actions of PCRM and KFC?

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