The Edge

Richard Northedge takes on corporate finance

BP Plc boss acts while Obama talks

BP Plc (LON:BP) is a big business though not as big as the American economy.

But Tony Hayward runs the oil company hands-on when Barrack Obama merely acts like the chairman of his empire and the US president would do well to remember that when calling for the BP chief’s head.

The oil spillage from Deepwater Horizon has been called a public relations disaster. It is not: it is a real environmental disaster and for the shareholders who have lost £45bn, a financial disaster. If Obama succeeds in making BP a business pariah, it will be a corporate disaster too. But there are two public relations failures playing out alongside the real disasters.

One is BP’s, and Hayward’s in particular. However good he is at directing the efforts to curb the oil spill and curtail the consequences, he has presented his case badly. His open-shirted smiling style may work in some situations but this disaster requires gravitas and he is failing to show it. Some inappropriate statements have not improved his image. And despite the hostile comments from the president, senators, state governors, environmentalists and communities, he seems not to have tempered his message to his audience.

But the other PR failure is Barrack Obama’s. He is grandstanding and has chosen the British oil company as his easy target. Despite the president’s powers and resources, he is choosing to criticise BP rather than instruct the government to help solve the problem. That way the failure to find a solution remains with the oil company rather than the White House.

And the more the president is criticised at home for inaction, the more he blames BP. Contrast that with BP, which has accepted responsibly from the start – even for actions by other companies – and whose efforts are on plugging the leak and cleaning the coast rather than criticising others. The president merely turns up the rhetoric when the pressure gets tough, wanting to kick ass and demanding heads roll.

If anyone can solve the Gulf of Mexico problem it will be the oil company, not the US government, and Obama ought to realise that BP without Hayward would be less able to do that than it is with him. If there is another brilliant CEO in the wings ready to replace him, he is already working on the problem as well as his boss and two heads are better than one.

Obama has at least two more years in office – six if he does not alienate his people by failing to rise to problems like Deepwater. But it is more than feasible that Hayward will still be in his job when the president has lost his.

2 comments on “BP Plc boss acts while Obama talks”

  1. srepen says:

    BP is going down. Way down to bottom. Cutting corners (by BP) doesnt help enviornment, and finances (BPs and Pensioners)

  2. Kar says:

    The US president is responding to his constituency, emotionally affected by this tragedy, who expects Obama to appear more emotionally affected as well. Sadly, kicking someone’s backside won’t restore the Gulf to inhabitable condition. This was one of his administration’s worst errors, to fail to oversee a corporation that had proved itself unworthy of trust.

    Obama realizes the government does not have resources in place now to handle technical aspects of deepwater wells. For the present, only BP people are aware of what other shortcuts have been taken in the deepwater well operations. Where all the bodies are buried, you could say.

    And if BP continues true to their history, yes — they will keep and promote people who have helped bring about this disaster, while firing anyone too concerned with safety at the expense of profits.

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