Apple vs New York Times: Not Really but It Seemed Interesting

February 21, 2012

Anyone following Apple knows that the New York Times wrote a series of very critical articles about the Foxconn that makes iPads and iPods for Apples.  And to be fair, the facility makes produces for other electronics companies as well.  The focus of the article was on the working conditions and why electronics are no longer manufactured in the U.S.  Most people who read the articles would agree that the articles cast Apple in a negative light.  Moreover, a number of protests against Apple were appearing at this time as well.  You can see the earlier case about it at this site.

 

That brings us the supposed fight between Apple and the New York Times.  A number of online sources reported that Apple had snubbed the New York Times by not providing its reporters early access to its OS X 10.8 Mountain Lion operating system.  Here is a sample of the reports:

 

Apple Shuns The New York Times in OS X Mountain Lion Coverage Over Foxconn Reporting

Friday February 17, 2012 7:14 am PST by Eric Slivka

With yesterday’s announcements from Apple regarding its forthcoming OS X 10.8 Mountain Lion operating system, a number of media outlets had been provided with advance briefings and early copies of the software for the purposes of having reviews prepared and ready to go. When Apple published its press release and went live with OS X Mountain Lion information at 8:30 AM Eastern yesterday, the embargo was lifted and all of the pre-briefed publications immediately posted their stories on the topic.

 

February 21, 2012

Snubbing the Media — Strategy or Revenge? Apple’s Stiff-Arming Of the NY Times After Paper’s Foxconn Exposé Offers a PR Lesson In Access Journalism — Gadget Giant Leaves Gray Lady Out In the Cold By Breaking News Elsewhere

Times all-star contributing columnist David Pogue got through to Schiller, but no regular Times journalist could make a dent. The reason for all this disrepect, the Washington Post‘s Erik Wemple speculates, was the hard-hitting Foxconn series the Times’ ran last month. Foxconn assembles roughly 40% of the world’s electronic devices, including those sold by Dells, HP and Sony — but the Times‘ series singled out Apple in way that many, including CEO Cook, thought was misleading and unfair. Was the cold shoulder the Gray Lady got this week really payback for the series? Reporters and editors at the Times seem to think so, Fortune reports.

The implications from the reporter were that Apple was purposeful not providing the New York Times with same early access to information it was providing other journalists.  In essence, the view was Apple was punishing the New York Times for its negative story.  This is a serious charge.  Organizations have every right to decide who they send information to and who they do not.  This point should not be disputed.  However, denying access because of a negative story is a dangerous measure.  At its worst, such an action is an attempt at censorship.  The message is, “mess with us and you pay a price.”  Journalists need to be free to write whatever they feel is appropriate and accurate.  PR people should not corrupt the system by trying to leverage any form of influence over them.  Here is how report described the situation:

 

Was the cold shoulder the Gray Lady got this week really payback for the series?  Reporters and editors at the Times seem to think so. Wemple got two quotes, one off the record, one on:

“They are playing access journalism … I’ve heard it from people inside Apple: They said, look, you guys are going to get less access based on the iEconomy series.”

“We’re never happy with our access to Apple. We never have been. Apple is a difficult company to report on,” says Damon Darlin, the paper’s tech editor. When asked how big a deal is the Journal‘s exclusive with Cook, Darlin responds: “Talking to the CEO of one of the largest technology companies, the highest-valued company of the world? Yes, we would like to do that. They know that.”

However, most reports were amended because there is no proof purposeful action by Apple to freeze out the New York Times.  Apple had briefed reporters before the release but asked for an embargo on stories until a specific time.  Most people based the negative actions by Apple on the New York Times key technology reporter David Pogue’s story was “slow” in appearing after the embargo was lifted and used information from the news release, not the information found in the early briefings.  Later reports included other reporters saying they saw Pogue waiting for a briefing and Pogue stated he had access to the early information.  In the end, the story was a non-story but did allow reporters to vent their frustration with Apple’s generally unresponsive nature to “the media.”

Questions to Consider

1.  If a company was restricting access to a media source after a negative story, could you justify that action?  Why or why not?

2.  What ethical issues are raised in this case especially those about quick, online reports?

3.  What do the tone of the stories saying about Apple’s reputation and relationship with many online and legacy media reporters?

4.  What responsibility does David Pogue have for correcting the story that he had been snubbed by Apple?  How did you reach that conclusion?

5.  Why has Apple used a limited access policy toward the media?  Has it been an effective strategy?  Why or why not?

 

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Reconsidering Johnson & Johnson’s Tylenol Performance

February 7, 2012

While we must be careful about re-writing any history, Howard Zinn’s work reinforced that history is written by the winners and may mute the voices of the losers/marginalized.  The point is to keep an open but critical mind when considering new versions of history.  The self-published book, The Tylenol Mafia, questions the ethicality and accuracy of Johnson & Johnson’s response to the 1982 Tylenol tamperings.  The author, Scott Bartz, is a former Johnson & Johnson who spent three and half years researching the book.  You can find the bibliography for the book at his promotional web site.  Bartz’s central thesis is that the tampering was not executed at the retail level but occurred somewhere in the supply chain.  The claim moves the responsibility from an external actor to and internal actor.  Still few would hold Johnson & Johnson responsible for the actions of a rouge employee.  The importance of the claim is derived from the implications that Johnson & Johnson worked to cover up this possible link and had the support of the news media and the government.  Here is a sample of the implications PR people are drawing from this claim from Jack O’Dwyer:

“The Tylenol Mafia,” by Scott Bartz, an exposé of Johnson & Johnson’s manipulation of facts surrounding the murder of seven people in the Chicago area in 1982 via Extra Strength Tylenol, will create a big headache for J&J, the media that went along with this ruse, and authorities such as the FBI, local police and the courts that did flawed and even dishonest work.

O’Dwyer also believes those who praise the Tylenol case is an excellent example of crisis management, including many PR textbooks, the New York Times, and PRSA, are embarrassed by the findings of the book.  The argument is that they have bought into the hype and not the reality.  Part of O’Dwyer’s point is that Johnson & Johnson took five days to recall the product after the tampering was discovered.  The point being that five days is not exactly fast, a point other in public relations support.

The debate has begun in PR circles about the book and its implications.  Bob Grupp of the Institute for Public Relations called the book conspiracy theory.  Her is his line:   “If you care to read more about conspiracy theory, you can Google the topic or read Jack’s blog.”  This is an unusual case so I refer you to the various links to draw your own conclusions about Johnson & Johnson’s place in crisis management lore.

Questions to Consider

1.  Where do you stand on Johnson & Johnson’s crisis management praise for the Tylemol case and why?

2.  If credible, how does the “book” harm Johnson & Johnson’s reputation?

3.  Is there a point to be made that PR creates cases that are more mythic than reality?


Is Foxconn Baking Apple’s Reputation?

January 29, 2012

If you have an iPod, iPad, or iPhone, do you ever look at it and wonder about the people who assembled your electronic marvel?  Most people do not think about the supply chain, including labor, that goes into the products they use.  Yes, we do know about sweat shop and child labor and efforts to reduce this problem in the garment industry.  Yet every product has a supply chain behind it that may have problems associated with it.  Apple products, like most in the electronics industry, have “problems” with using conflict metals and minerals as well as labor issues.  This case will focus on the labor issues.

 

In February of 2011, Apple releases a report titled “Apple’s Supplier Responsibility 2011 Progress Report.”  It was the first effort by Apple to expose the labor problems it faces.  Among the problems were 137 employees being poisoned at its Wintek’s Suzhou factory in China by n-hexane, a cleaning agent used in the production of parts for Apple and Nokia. For Apple, the facility makes iPhone screens. The report also noted compliance problems with the 60 hour work week established by Apple.    However, the report does not offer much detail about what Apple is doing to address the problems.

 

The most disturbing part of the report might have been the problems at FoxConn Technology in Shenzhen.  During one five-month span, there were 15 suicides or attempted suicides.  The problem was so bad that the factory hung netting to catch workers trying to commit suicide by jumping from certain locations in the factory.

 

Foxconn remains a very active problem for Apple.  Major news outlets, including the New York Times, continue to report about the problems there.  After running two stories about Foxconn in January of 2012, Apple decided to reply to the New York Times.  The reply was a e-mail that CEO Tim Cook sent to employees.  It should be noted that Cook is the person at Apple who found the Foxconn facility.  The long e-mail is an attempt to boost employee morale.  The reports linking Apple to the tragic events at Foxconn can demoralize employees if they feel the company they work seems to care so little about people further up the supply chain.  Here is the text of the e-mail:

 

Team,

As a company and as individuals, we are defined by our values. Unfortunately some people are questioning Apple’s values today, and I’d like to address this with you directly. We care about every worker in our worldwide supply chain. Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don’t care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It’s not who we are.

For the many hundreds of you who are based at our suppliers’ manufacturing sites around the world, or spend long stretches working there away from your families, I know you are as outraged by this as I am. For the people who aren’t as close to the supply chain, you have a right to know the facts.

Every year we inspect more factories, raising the bar for our partners and going deeper into the supply chain. As we reported earlier this month, we’ve made a great deal of progress and improved conditions for hundreds of thousands of workers. We know of no one in our industry doing as much as we are, in as many places, touching as many people.

At the same time, no one has been more up front about the challenges we face. We are attacking problems aggressively with the help of the world’s foremost authorities on safety, the environment, and fair labor. It would be easy to look for problems in fewer places and report prettier results, but those would not be the actions of a leader.

Earlier this month we opened our supply chain for independent evaluations by the Fair Labor Association. Apple was in a unique position to lead the industry by taking this step, and we did it without hesitation. This will lead to more frequent and more transparent reporting on our supply chain, which we welcome. These are the kinds of actions our customers expect from Apple, and we will take more of them in the future.

We are focused on educating workers about their rights, so they are empowered to speak up when they see unsafe conditions or unfair treatment. As you know, more than a million people have been trained by our program.

We will continue to dig deeper, and we will undoubtedly find more issues. What we will not do — and never have done — is stand still or turn a blind eye to problems in our supply chain. On this you have my word. You can follow our progress at apple.com/supplierresponsibility.

To those within Apple who are tackling these issues every day, you have our thanks and admiration. Your work is significant and it is changing people’s lives. We are all proud to work alongside you.

Tim

Below are some reactions posted to a news story about the e-mail:

The only reason Cook and the Board care now is because of Public outcry… But it won’t hurt sales… People want the cheapest price they can get no matter what the costs. Hypocrites.

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0 replies · active 17 hours ago

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Coldwaters Rundeep · 22 hours ago

Who is making sure Apple is following it’s own policies? Corruption in this neck of the woods is to great to leave it up to the parent corporation and needs an outside agency that is arm length with Apple.

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Tony · 19 hours ago

To which I would reply to Mr. Cook, bullshit. Apple doesn’t even care about people at corporate let alone the factories. Granted its a different level of caring but people are not treated with respect at Apple at. Very personal experience allows to me to share this. My experience with Apple in Cupertinomis that most people there can’t wait to get a job elsewhere. Get Apple on the resume and move on as quickly as possible. It’s a shit environment.

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Industrial Hitlers · 20 hours ago

Apple CEO Tim Cook, just like Better-Off-Dead Liar and Stinky Hippie Steve Jobs, is an Industrial Hitler issuing self-serving propaganda while murdering slave labor.

People who eat up his obvious PR spin are complicit. That includes Obama, Congress, and every Apple employee and customer.

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Will · 23 hours ago

Apple is to blame b/c it has been squeezing supplier profit margins which requires them to cut corners on safety. It’s that simple. Apple should use some of its record profits and provide it’s suppliers with some money to improve safety at its factories.

The concern over Foxconn is real for Apple. In late January, a self-described Apple started a petition at Change.Org.  Here is the e-mail requesting support for the petition:

According to the New York Times, workers at a factory in Shenzhen, China, owned by Foxconn (a company that manufactures iPhones, iPads and other devices for Apple) regularly work sixteen-hour, seven-day work weeks.

They stand until their legs swell and they can’t walk, and they perform repetitive motions on the production line for so long that some permanently lose the use of their hands. To cut costs, managers make workers use cheap chemicals that cause neurological damage. There has been a rash of suicides at the Foxconn plant, and 300 workers recently threatened to jump off the roof over a safety and pay dispute.

In short, as one former Apple executive told the New York Times, “Most people would be really disturbed if they saw where their iPhone comes from.”

Mark Shields, a self-described member of the “cult of Mac,” started a petition on Change.org demanding Apple exert its influence on its suppliers to improve working conditions for the factory workers that make iPhones, iPads and other Apple products. Click here to sign Mark’s petition right now.

Apple knows it can play an important role in ensuring safe and fair working conditions for the workers at its suppliers, like Foxconn. In 2005, the company released a supplier code of conduct, and it performs hundreds of audits each year in China and around the world to confirm its suppliers are meeting the code’s expectations.

But that’s where Apple’s commitment falters: the number of supplier violations has held steady year to year and Apple hasn’t consistently publicly stated which suppliers have problems or dropped offending suppliers.

The bottom line, Apple executives admit, is that they’re not being forced to change.

One current executive told the New York Times that there’s a trade-off: “You can either manufacture in comfortable, worker-friendly factories,” he said, or you can “make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China.”

That means public pressure is the only thing that can force Apple to ensure its suppliers treat workers humanely. If enough people sign Mark’s petition — and tell Apple they care more about human beings than they do about how fast the company can produce the next generation iPhone — the company could be convinced to make real change for the workers at Foxconn and other factories.

 Click here to sign Mark’s petition demanding Apple change the way it does business.

Thanks for being a change-maker,

– Amanda and the Change.org team

People are beginning to question Apple’s commitment to responsible behavior.  The company is making billions while the suffering of many workers is well documented.  Foxconn is a massive facility.  Foxconn employees over 230,000 workers.  Most workers make about $17 a day and one quarter live on site in company barracks.  The kitchen at Foxcoon serves 3 tons of pork and 13 tons of rice per day.  We have not seen anything like Foxconn in the U.S. since the early days of the industrial revolution when “company towns” were in vogue.  In a company town, employees lived in housing owned by the company and shopped at stores owned by the company.  In fact, some employees were paid in company scrip rather than actual money.  No need to actual money when everything a worker made was being paid to the company.  Scrip eliminated the need to have cash on hand and was common in the coal industry

Questions to Consider

1.  Is Foxconn a crisis for Apple at this point?  Justify your answer.

2.  How does this case illustrate the connection between issues management and crisis management?

3.  What is Apple’s responsibility for the workers at Foxconn who are part of their supply chain?

4.  Does Apple’s strong, favorable reputation help to insulate them from the problems at Foxconn?  Why or why not?

5.  How would rate the ethics of Apple’s initial report disclosing their supply chain problems and why would you assign it that rating?

6.  How would you evaluate the effectiveness of the CEO’s defense of Apple?  What criteria did you apply to reach your conclusions?

7.  What else would you recommend Apple do to address the situation and why would those recommendations help?


JetBlue’s Deja Vu: Sort of But not Exactly

October 31, 2011

In 2007, JetBlue received intense media coverage (traditional and social) for stranding passengers on the tarmac, in a snow storm at the JFK airport in new York City for up to 14 hours on St. Valentine’s Day.  It became known as the “St. Valentine’s Day Massacre” for JetBlue.  JetBlue became an icon for crisis communication as its CEO, David Neeleman, began a series of media interviews to apologized for the situation and announce JetBlue’s “Customer Bills of Rights.”  The Bill of Rights set up a compensation program for flight delays including being stuck on the tarmac.  Neeleman even appeared in YouTube video to offer the apology.  Though people were horrified that passengers could be stuck on a plane for 14 hours in the snow for a supposedly three hour flight, JetBlue was generally praised for its response.  In part, the crisis was viewed as an extreme event that was unlikely to be repeated.  The snow storm was unusually bad and the planes just happened to leave the gate at an inopportune time.  This would not happen again, probably.

JetBlue seemed to experience déjà vu in October of 2011.  On Saturday, October 29, JetBlue Flight 504 departed Fort Lauderdale, FL for Newark, NJ.  An unusual October snow storm moved into the northeast causing flight problems for Newark and other nearby airports.  Due to the weather, Flight 504 was re-routed to Hartford, Connecticut (Bradley International Airport).  It is not unusual to re-route a plane because of weather.  Neither the airline nor the passengers like re-routing.  Passengers are not where they should be neither are the planes and crews.  The airline has to sort out how to get the passengers, planes, and crews to where they should be.  In short, re-routing is unpleasant for all involved.  But the problems with Flight 504 were just beginning. 

Flight 504 arrived at Bradley International at 1:07 pm.  The passengers left the flight at 9:00pm.  That was over seven hours on a tarmac waiting to de-plane.  JetBlue management was having a form of déjà vu.  They had a freak snow storm and people stuck on the tarmac.  The situation was not exactly the same as in 2007.  In 2007, the planes had left the gate with the hopes of taking off from the airport.  The planes could not takeoff nor could they return to the gate.  The circumstances that lead to the plane being on the tarmac were different but the had the same general outcome:  passengers stuck on the tarmac, due to snow, for a long period of time.  Moreover, there were the same issues of the plane running out of water and food while bathrooms broke down as well.  Here is a short description for a Washington Post Story about the experience:

“The toilets were backed up. When you flushed, nothing would happen,” said Andrew Carter, a reporter for the Sun Sentinel of Florida, who was traveling to cover the Miami Dolphins game against the New York Giants. His plane took off from Fort Lauderdale for Newark Liberty International Airport at around 9 a.m. After being diverted to Hartford, the plane sat on the tarmac between around 1:30 p.m. and 9 p.m., he said.

The situation was complicated further by passengers with medical conditions.  In fact, the news reports indicated that the reason the situation was resolved was the need for medical attention. 

Here is short chronology of the situation based upon a news report:

“At the three-hour mark they told us by law they had to let us off the plane. They were waiting for a tug to take us to a gate. We heard that same message at the four-hour mark, and continuing until state troopers boarded the plane for a medical emergency,” said Robert, a passenger who did not want to give his last name.

A paraplegic on the flight had a medical issue, and about seven hours after the plane landed.  It was at that point that police and firefighters came onboard to render medical assistance.  

“Still on the plane. We haven’t moved. Now EWR closed. Getting ugly in here. People yelling wanting to get off,” Andrew Carter said via Twitter just before 6 p.m.

One passenger noted at the end of the above news report:  “I’ll never fly JetBlue again, and I’ll never fly through Connecticut again”

CNN reported the following as JetBlue’s response: 

JetBlue apologized for the situation and blamed it on a “confluence of events,” including intermittent power outages which complicated matters.

“We worked with the airport to secure services, but our flights were six of the 23 reported diversions into Hartford, including international flights (picture big jets carrying hundreds of people), the airline said on its website. “Getting all the flights deplaned at the same time in a small airport is not unlike trying to get an elephant into a smart car; it’s not an easy fit.”

Passengers deplaned around 9 p.m., according to JetBlue.

Here is more of the JetBlue statement:

 “JetBlue is doing everything possible to ensure our customers affected by today’s unusual combination of weather and infrastructure issues are being well cared for. We apologize for the experience.”

Unfortunately, no official statement appeared on the JetBlue web site within 24 hours of the crisis.  Most of the news stories noted a representative for the Bradley International Airport was not available for comment.  Hence, the airport was silent immediately after the crisis.

The social media was filled with stories, including some video from the plane, and commentary about Flight 504.  Here are some comments from the Washington Post web site about the story:

As long as people continue to willingly do business with corporations who care not a damn about them — due in the main to Congress’s refusal to hold those corporations responsible… for anything — then people have only themselves to blame for how they are treated. Want customer service at the airlines to improve? Simple: STOP. BUYING. TICKETS.

What is it about airlines that renders them so incapable of dealing with what should be a relatively simple problem? If the plane isn’t ready to go, allow passengers to disembark. It’s incredible that this scenario keeps repeating itself, and the airlines almost never offer any reasonable explanation once the ordeal is ended. It’s as if they’re just clueless.

Here are comments for the Huffington Post about Flight 504:

I thought it was good reportage to get all the facts before publishing a story? The 3 hr. rule was violated, by whom? Jet Blue who seems to be getting the brunt of the bad press. Or the Connecticu­t airport authoritie­s?

This happens every year. You’d think after all this time they’d learn how to deal with something like snow.

Update

JetBlue has gone social in its response, similar to the 2007 crisis.  A statement about the crisis appears on the JetBlue blog, BlueTales.  Here is the posting:

October 30, 2011

Dreaming Of A White Halloween? Information Regarding This Weekend’s Storm

Some people dream of a white Christmas; apparently Mother Nature was dreaming of a white Halloween this weekend. Winter reared its ugly head earlier than usual yesterday, causing a major crease in air travel.

On top of the obvious operational hiccups to flying airplanes in bad weather – wind, rain, hail, snow and ice – an additional unfortunate mix of circumstances caused a messy day operationally and has made the recovery for us and other airlines operating along the East Coast more challenging.

During the storm, multiple instrument failures occurred at JFK and Newark, affecting all carriers. This equipment is needed for flights to land when visibility is low; while it was out of service, both airports stopped accepting arrivals and eventually, a number of flights had to divert elsewhere to get more fuel.

Six of our flights diverted to Hartford. We worked with the airport to secure services, but our flights were six of the 23 reported diversions into Hartford, including international flights (picture big jets carrying hundreds of people). Getting all the flights deplaned at the same time in a small airport is not unlike trying to get an elephant into a smart car; it’s not an easy fit. As if things weren’t challenging enough, the airport experienced intermittent power outages, which made refueling and jetbridge deplaning difficult (not to mention the roads there were bad, which put a wrench in getting buses to the airport to alternatively get everyone where they needed to go). Temporary loss of de-icing capability added yet another challenge to being able to get planes out in Hartford.

Diversions in general, especially weather-related, are something that we plan for regularly. If heavy winds or a blizard are coming in, we look at our major cities and secondary cities in advance, sending the area’s airports a list 24-48 hours out asking what their capabilities are for handling diversions. We look at things like: does the airport have TSA on hand, buses, staffing, customs agents, etc. so we have it ahead of time. Flights are planned with alternates in mind and fueled accordingly.

Most diversions during weather are what we call “fuel and go” events. They happen specifically so we can get enough gas to navigate around the weather that’s built up in a certain area. Sometimes, the diversion is simply to wait out the storm.  In the case of Hartford, unfortunately, a power outage and failure of back up power resulted in the fuel supply being disrupted and the fueling of all airline diversions was halted.  The capability to refuel aircraft was restored later, after which we planned our four extra sections for today (3 to JFK, 1 to EWR) and approximately 500 of the roughly 700 customers who were diverted there are booked on them today.

A special thank you goes out to John, our General Manager Hartford and his team for working through the night and into today to recover the operation there. Another thank you goes out to JFK who sent additional crewmembers and leadership to Hartford to assist in preparing our aircraft and processing customers for today’s extra flights. And a big thank you goes out to our customers for their patience during this weekend’s challenges.

We apologize to those impacted by this confluence of events, as it remains our responsibly to not simply provide safe and secure travel, but a comfortable experience as well.

We’re offering customers traveling to/from the New York area today fee waivers to change or cancel their flights. Check jetblue.com for the full details and be sure to check the status of your flight before heading to the airport.

The web site link has operational information to help passengers cope with the disruption.  This includes waiving the change/cancel fees for those affected by the storm. 

JetBlue also has a video on their web site and linked to YouTube.  The video is an apology from Rob Maruster, Jet Blue’s chief operating officer.  Here are some of the reactions to his video:

 

  • Fire Him Now. No Bonus No Excuses Dock His Pay!!
    • Lame
    • You Lie!!!!!!!!!!!!!!!!!!!!!!!!!
  • I’m reading some of these comments so far and everybody is quick to pass judgement. What the media not telling you is that the airport had power outages very frequently and the reason for all those planes was because Boston airport turned away a lot of international and dosmetic diverting flights not because there system was down or they reach capacity but because Libyian fighters was more important. I’m not trying to push the blame one way or another because someone will take the fall for this
  • Rob- Were you the VP of Airports the last time this happened in 2007? Barger was the COO and it was the Founder who took the fall for your incompetence. It looks like you two haven’t learned a thing, in fact it has gotten worse. Jetblue’s customers and crew members deserve ALOT better. It is time to clean house and bring in more competent management!!!!!
  • You need to do better than this. This is not the first time this has happened. The excuses have worn thin.
  • Mr Maruster’s body language speaks far louder than his words, and he is just going through the motions to give us the impression he and his ilk will correct this problem post haste. This man know full well that lessons learned from multiple events going back to February 2007 have been set aside, all for the sake to save a few more bucks and most likely increase his executive bonus. He should be tossed for his deliberate actions to ignore what is already well documented at Forest Hills.
  • And a third chance after the next storm and a fourth chance after the storm after that. And so on.. and so on… Your pilot’s recodring to air trafiic control was played and he said his own company would not help. Bad, real bad.

Question to Consider:

1.  Do you think JetBlue’s initial response will be effective?  Why or why not?

2.  Is it ethical for the Bradley International Airport not to comment early in the crisis? Why or why not?

3.  If you worked for Bradley International Airport, what would you recommend as their crisis response and why would you offer that particular advice?

4.  What role does the 2007 event play in this crisis?

5.  What do the online comments tell you about stakeholder reactions?

6.  How could JetBlue use the comments to help them evaluate and to shape follow-up crisis messages?

7.  What role does social media play in escalating this crisis?  How can it help to de-escalate it?

8.  Based on the video comments, how would you judge reactions to the video apology?

9.  What are the advantages of JetBlue using social media in their crisis response?  The disadvantages?


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?


Crisis Insurance for Reputations: Ironically from AIG

October 12, 2011

AIG are three letters associated with the financial crisis of 2008 and the US government bailout of corporations.  AIG received billions in bailout money from the US government after it lost nearly $100 billion dollars in 2008.  In fact the US Treasury still owns a majority of AIG’s common stock.  The price of that stock is still down 95% from its pre-crisis high.  AIG rebranded AIU in Chartis in 2009.  The rebranding was seen as an effort to separate Chartis, a branch of AIG that was profitable in 2008, from AIG thus sparing it the reputational damage created by AIG’s controversial bailout.  Here is how Chartis presents itself on its web site:

Finding New Ways to Lead

We have established ourselves as a world leader in insurance by helping our partners and customers realize their own plans for the future. Our fundamental strength lies in the 40,000 employees who serve more than 70 million clients around the world.

Every day, our people deliver commercial and personal insurance offerings through hundreds of innovative products and services. By counting on us to meet their unique insurance needs, our clients are able to pursue a secure course toward their goals.

Partnering With Our Customers Along Their Way

You can be sure that you have a dedicated partner in Chartis, one who will take on your challenges as its own. By meeting straightforward needs as well as solving complex issues, we make your confidence our number one priority. Whether the need is as fundamental as insuring a home, or as nuanced as covering environmental exposures, we’re committed to delivering what matters most to you.

Commercial Insurance

Every day, our people bring a critical measure of confidence to the plans and projects of businesses like yours. We provide commercial insurance products and services to the full spectrum of enterprises all around the world—from large, multinational, and mid-sized companies to small businesses, entrepreneurs, and non-profit organizations.

Our offerings span traditional insurance categories such as property and casualty, and extend to new areas like political risk and crisis coverage. We also offer a breadth of products designed to meet the special requirements of particular industries.

As your needs evolve, so do our offerings: We maintain an ongoing dialogue with our diverse client base in order to identify emerging risks and respond with innovative underwriting solutions. To learn more about how Chartis can help you with your commercial insurance needs, please visit www.chartisinsurance.com.

Personal Insurance

Chartis has a long history of offering personal insurance solutions to meet the particular needs of individuals, families and students worldwide. Our products and services are tailored to meet the needs of consumers around the world.

Chartis is flexible and grows alongside you and your family. We consistently create dependable new offerings that address changes in your current lifestyle as well as your plans for the future. Our personal insurance solutions encompass a wide array of products, which can be tailored to meet your current and emerging needs.

To learn more about how Chartis can help you with your personal insurance needs for all ages, life stages and lifestyles, please visit www.chartisinsurance.com.

There is no mention of its roots in AIG.  Rebranding to protect reputations is based upon distance and Chartis keeps a wide distance from AIG.

This week, Chartis began offering customers a new insurance product known as ReputationGuard.  ReputationGuard is one of many crisis-related insurance products offered by Chartis.  The novel aspect of the new product was the recognition of the need to protect reputations during a crisis.  Here is how Chartis explains ReputationGuard:

Press Release Source: Chartis On Tuesday October 11, 2011, 9:04 am EDT

NEW YORK–(BUSINESS WIRE)– The Chartis insurers today introduced ReputationGuard, an insurance policy that provides innovative coverage to help policyholders cope with reputational threats. Developed by Chartis’ Executive Liability division, ReputationGuard delivers the benefit of both access to world-class reputation and crisis communications professionals as well as coverage for costs associated with avoiding or minimizing the potential impact of negative publicity. The result is cutting-edge coverage against publicity that puts reputation and brand image at stake.

A recent survey of public and private board members shows that 69% of them now rank reputation risk as their primary concern.1 Another recent survey found that 79% of business decision makers believe they are only 12 months from a potential crisis.2

ReputationGuard gives policyholders access to a select panel of the internationally recognized and award winning communications firms of Burson-Marsteller and Porter Novelli. These firms are committed to providing strategic guidance and implementation support on critical communications issues on global, national and local scales.

Threats to reputation and brand image are more common and wide reaching today than ever before—and can impact a company’s bottom line. Events such as executive scandals, questions about product safety, data breaches, litigation and other negative publicity can become front page news and quickly impact reputation or brands. ReputationGuard combines the global reach of Chartis and its partners to increase an organization’s preparedness and access to key resources to stem the flow of damaging publicity in order to help protect its most valuable asset – its reputation.

“In today’s world, one person’s negative opinion can quickly become adverse publicity on a global scale,” said Tracie Grella, President of Chartis’ Professional Liability unit. “Public perception of the response to an event can have a lasting impact on an organization’s reputation. ReputationGuard is a unique solution to this exposure.”

Policyholders will gain access to a panel of world-renowned public relations experts and their affiliates:

Burson-Marsteller: Burson-Marsteller is a leading global public relations and communications firm operating across 96 countries. Companies engage Burson-Marsteller when the stakes are highest, during a crisis or at times of fundamental change or transition. It provides companies in crisis with strategic counsel and program development across the spectrum of public relations, public affairs, digital media, advertising and other communications services. For more than half a century, Burson-Marsteller has been selected time and again as a trusted partner to some of the world’s largest companies.

Porter Novelli: A global public relations leader, Porter Novelli has been providing issues and crisis counsel for nearly 40 years, serving clients from 90 locations around the world. Last year the agency introduced its Real-time Reputation specialty, which recognized that a world in which social media can damage hard-won reputations in just minutes requires a fundamentally different way to practice crisis communications. Porter Novelli’s Real-time Reputation Specialty is an end-to-end offering that includes everything from preemptive communications to programs that help restore corporate reputation after an incident. Its team of specialists in brand, corporate communications and social media work with senior corporate and public affairs communicators to plan for adverse events and move rapidly – within minutes – to manage these events both online and off, employing both conventional and digital means to mitigate possible damage to corporate reputation.

Analysts feel the product will be attractive to small and medium sized companies that lack in-house crisis communication capabilities. 

Burson-Marsteller is actually a link back to AIG.  Burson-Marsteller was hired by AIG to help it combat the reputational damage it was suffering from the bailout.  Critics did note that AIG used money from the US government to pay for consulting help designed to address problems from taking that same money from the government.  It was interesting that some news reports used the ReputationGuard announcement to link AIG to Chartis.  In a way, the announcement became a potential reputational threat for Chartis. 

Questions to Consider:

1.  What are the ethical implications of rebranding to escape past problems?  Is there an element of deception in this strategy that should raise ethical concerns?

2.  How much of a threat to Chartis is the revived connection between it and AIG?  Justify your evaluation of the threat?

3.  How does ReputationGuard help to validate much of the crisis communication research about crisis and reputation such as SCCT?

4.  Why was the bailout such a crisis for AIG?

5.  How does being part of ReputationGuard help of hurt the reputations of Burson-Marsteller and Porter Novelli?

6.  If you worked for a company, how would you justify either purchasing or not purchasing ReputationGuard?  In your answer consider the limits to ReputationGuard as a crisis management device.


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