Posted by: cindystephenson | November 23, 2008

Looking at the current auto crisis through a stakeholder relations lens

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The issue:

With General Motors teetering on the brink on insolvency, their backers argue that a bankruptcy filing would essentially wipe out the entire U.S. auto industry.  GM’s 125,000 employees would lose their jobs, and it  would have a significant negative impact on retirees, dealers, and suppliers.  One in ten Americans is employed in a service related to the U.S. auto industry.

From a stakeholder relations perspective, what would you advise the big three auto makers?

Communicating to your supporters, opponents and those in the middle:

At the outset of any major issue, public opinion generally follows a bell curve with 20%  of the public supporting you, 20% opposing you, and 60% somewhere in the middle and neutral – they don’t know a lot about the issue, or care.  It’s important to consider who fits where and why they feel that way about you. it’s also important to consider how you address each group.

Public consultation expert Desmond Connor cautions against spending more than 20%  of your time and effort trying to directly change the minds of committed opponents. There’s little you can do to change their minds.  The group you are after are that group in the middle who at this point don’t care. Interest, inform and involve them. Then encourage them to deal with the opponents.

One other caution is not to ignore your supporters.   According to communications expert Bart Mindzenthy, organizations often ignore or take this group for granted, assuming that “once a supporter, always a supporter.” But you can’t assume stakeholders will always be onside, cautions Bart. They need ongoing reinforcement. The key is to keep them in the communications loop, and to develop a strategy which draws these people into working for you in a very active way.

To sum up, the bulk of your communications should focus on shifting that silent majority in the middle from “don’t know” to “like you a lot”, and your supporters can have a role in that.

Mobilizing support:

GM has posted to their corporate website and their US based FastLane blog, a section called GM Facts and Fiction. It includes:

  • a professionally produced four minute clip on The US Auto Industry and the Ripple Effect (260,000 views and 2,000 comments in the first six days),
  • facts to counter myths such as: GM is going to go bankrupt, GM doesn’t make cars that people want to buy, GM is going to merge with Chrysler, GM is not actively pursuing energy saving technologies, etc.
  • a section called “Mobilize Now” with specific messaging for employees, retirees, dealers, concerned Americans, and suppliers, urging them to contact US senators and representatives. It comes complete with phone numbers and suggested text for letters you may want to send, and
  • a section on “Learn More” about the auto industry crisis.

Their basic message is an emotional appeal on the far-reaching scope of the problem. They’re communicating with their supporters, and encouraging them to spread the word. It’s well done. But is it enough? I don’t think so, and here’s why.

It’s not a public relations problem:

Much of the commentary in the past few weeks has been highly critical of the auto industry, and there have been calls for a new business model. Industry executives said as much this week during their presentations to the US Senate banking, housing and urban affairs committee. This is a business issue – not a public relations problem.  When what a company SAYS and IS doing falls below what stakeholders think it NEEDS to do, there’s an expectations gap.  It doesn’t necessarily mean the stakeholders are right, although in this case the company has said as much.  It’s tempting for management to call on PR people to explain away the difference.  Although communications can help close that gap once changes have been made, it’s not be the first line of defence. They need to undertake a major corporate re-structuring.

Communications can play a key role in recovery:

During this time it’s also critically important to keep the lines of communication open and be accessible to employees and their families, retirees, the UAW, shareholders, dealers, suppliers, elected officials, and others who are interested and potentially impacted.

If GM ends up cutting back on its dealer network, closing assembly plants and retiring some of their brands, a solid communications plan will need to be in place, geared towards lowering expectations, and making a factual and reasonable case for their new business model.

More immediately, the big three auto CEOs must heed the advice of their communications counsel to avoid the kind of backlash they experienced this week after flying to Washington to plead for a bailout in their private jets. Clearly that didn’t help their case.

What do YOU think?

Photo credit: Erik M. Lunsford/St. Louis Post-Dispatch

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