The big three automakers are in a terrible predicament. They can’t sell cars. Their bloated union contracts have forced billions of $$$ of hardship costs on the companies. And, their failure to innovate ahead of the curve has made each come close to complete failure. Most of the malfunction that exists can be pinpointed on poor management decisions, lack of execution, inability to connect R&D all the way through to sales and other business related issues.
Yet, I find it quite ironic that the current fate of the Big-Three now largely depends upon how savvy each can become operating within a public relations fish bowl. Legislators, investors, consumers, the media and everyone else are all focusing in on every superficial move that each company CEO (and senior management) makes. When the three CEOs showed utter stupidity by each flying their own corporate jet to the first Congressional hearing and then not having any coherent plan as to how the bailout money would be spent, Congress sent them packing. Each looked like the kid who was thrown out of class for goofing off and still isn’t being allowed back in because of bad behavior.
But, it got worse. Much worse. None of the three corporate leaders made any sort of contrite statement during this same trip to Congress. Instead, they blamed their woes singularly on the current financial crisis. This public relations blunder made Congress (and everyone else watching) feel that these three amigos were living in a fantasy world. It also came across as quite arrogant and unbelievable.
Those superficial, yet quite consequential public relations gaffes almost killed all three of these companies. At the very least, they made all of us ridicule the American automotive manufacturers that much more. And, most importantly, made us feel zero sympathy at a time when each absolutely needed to be building up as much public support as possible.
You see, much like what happened before the initial Wall Street bail out, each member of Congress is still very concerned with how his/her constituents will feel about any vote to bail out these fallen titans of business. Yes, to some degree, the economics of the situation will play a key role in their decisions (i.e. how will two million added lost jobs hurt our economy? and even with the new infusion of cash, can these companies really regain any competitiveness?). But, I believe that as public perceptions change, so will the agendas of their legislators. And, that will impact so many decisions to questions that still haven’t been thought through or acted on yet. A few include: How much of a bailout will they receive? For how long will it last? How will they be monitored once the money is provided? What rules and punishments are attached to this taxpayer hand out? Who will be steering the ship once the money is received? What happens when the next CEO makes a stupid PR move?
It’s nice to see that senior management has begun to learn from their earlier PR mistakes (although, there really was no choice.) Each drove hybrids all the way to Capitol Hill. They also admitted that mistakes were made throughout the last few years which led to the current fiasco. And, they came armed with plans on how the proposed bail out money will be spent. I know there will be more PR blunders over the next weeks and months. It’s just an inevitable reality for these companies that aren’t used to being watched 24/7 and never really cared about their own public personas to this degree. But, I hope for their sake that each is scrutinizing every decision and move from a “what will the public think?” standpoint. Or, I do believe that the negative impact of poor public relations could serve to finally take these companies down.