The Clydesdale Controversy

Anheiser-Busch, Budweiser's parent and a 156-year institution in St. Louis, has rejected an unsolicited takeover bid from InBev, a global beverage giant headquartered in Belgium. While many factors are at stake in this month-long controversy, the InBev case is a reminder of the community relations challenges companies face when treading on unfamiliar soil, particularly when the acquirer is a foreign company. Many St. Louis residents expressed confusion and sadness at the prospect of A-B turning itself over to foreign hands. Opponents of the takeover launched a website to stop the deal in its tracks. InBev cut an obligatory video to show its commitment to the St. Louis community, but so far it isn't enough. As U.S. Senator Claire McCaskill told InBev's CEO, Missouri citizens are left wanting more.

InBev is not the first foreign company to face such resistance. Washington went wild over the prospect of Dubai Ports World managing certain operations at eight U.S. Ports. Lenovo saw local resistance to its acquisition of an IBM personal computer manufacturing plant in North Carolina. The list goes on.

Whether a company is establishing a presence in a new state or country, a well-planned grassroots "ground game" is in order. A strategic information campaign that minimizes confusion, accounts for local sentiment, and eases the uncertainty of local residents and media can help a company achieve its objectives.

Washington is getting anxious, Part I

Wall Street has entered the crosshairs of congressional leaders who are nervous about voters paying $4 per gallon of gas in an election year. Congress held hearings this week on the impact of oil contract trades on gas prices and we can expect more intricately-staged hearings at which financial institutions testify before a bank of TV cameras and impatient lawmakers. Congress recently ran oil company executives through the same gauntlet.

Wall Street executives aren't the only ones who should take this example to heart. Local town hall gatherings, shareholder meetings, or regulatory hearings all impact public opinion. Companies must recognize the inherent perils and opportunities that come with appearing before such gatherings. We regularly advise clients who testify before Congress or other regulatory bodies at the local, state, and national level. Every scenario requires its own strategy, but there are a few actions companies can consider taking before such events to influence public opinion.

For instance, companies can employ an advertising or public relations campaign prior to the event to soften their critics' arguments. Further, a pre-emptive, significant announcement prior to the hearing can alter the tenor of media coverage and public commentary, put your critics on the defensive, and give your sympathizers at the hearing more to work with.

Most importantly, those who appear before such hearings should appreciate the many nuances, opportunities, and pitfalls that accompany highly-publicized events. Womble Carlyle has trained clients to navigate interviews with national news networks and to conduct "Q & A" meetings with hostile members of the public. Those who appear poised and in command of the facts generally succeed. Those who appear flustered, impatient, or indifferent to the concerns of the public generally do not.

When the writing is on the wall...

…you are best serve to read it. That is what Wal Mart did when it announced in May it was enacting toy safety standards that exceed existing requirements. That is the definition of getting ahead in the race for public opinion. Like the rest of us, Wal Mart bet that government would stiffen toy safety standards after troubling media reports of unsafe toys manufactured in China flooding the U.S. market. Indeed, state governments were already pursuing a patchwork of regulatory schemes that were quite different from one another. Rather than drift with the tides of politics and public opinion, Wal Mart took the wheel and is now at the helm of industry best practices. Aggressive steps like this can put a company on offense with a single, well-executed strategy.

Wal Mart hasn’t always acted so nimbly. When state governments (like my home state of Maryland) attempted to mandate employee health care requirements on Wal Mart and Wal Mart alone, the retail giant hardly budged. A nationwide, agile network of anti-Wal-Mart activists who backed the proposal successfully portrayed the company as a corporate giant indifferent to the needs of its employees. Only a 2005 court ruling that invalidated the health care proposal could save Wal Mart in that instance. Judging from their response to the toy safety crisis, Wal Mart now recognizes the value of a pro-active and aggressive response to emerging crises.

Changing Times for America's Newspapers

If you needed more proof that newspapers are searching for their place in an online world, here a few recent announcements that should convince you.

First, more than 100 employees of The Washington Post accepted buyouts in May, including legends like David Broder, a national political correspondent and columnist, and Tony Kornheiser, a longtime fixture on the sports desk. Announcements like this are increasingly common in today’s newsrooms, as papers suffer from declining circulation and dwindling advertising revenue.

The newspaper industry suffered its lowest level of advertising revenue in 50 years last year, according to a March announcement from the Newspaper Association of America. Further, newspaper circulation declined 3.5% from last year, according to the Audit Bureau of Circulations. The Tribune company, which owns papers such as The Chicago Tribune, The Los Angeles Times, and The (Baltimore) Sun, plans to cut 500 pages of news each week from its papers.

Despite the public’s transition to new sources of news, newspapers should generally remain a part of any company’s communications strategy. Much of the news we gather from the web, television, or talk radio originates in our morning newspaper. Walk in to your local TV station any given morning and you’ll see editors and reporters hunched over their local paper deciding which stories to cover that day. This complex relationship between print and electronic news cycles is one companies must appreciate if they are to communicate with the public effectively.