For a company that is so sorely in need of anything that could even briefly boost its public image, you would not know that by looking at BP. In a world where perception is reality, BP's public relations gaffes following the Deepwater Horizon rig explosion on April have been nothing short of stunning. BP's handling of the spill cleanup has bordered on the incompetent and the company's public persona borders on, or maybe even surpasses, arrogant.
These are adjectives that a company who has lost more than $30 billion in market value and seen its shares tumble 26% in the past month can ill afford to have tied to it. That is the rub with being a public company. The court of public opinion can pass viscous verdicts to punish a company's stock. There are plenty of recent examples of PR blunders from marquee companies that BP (BP) could have and should have learned from.
A couple of years ago, Apple severely mishandled news relating to the health of CEO and founder Steve Jobs. Apple (AAPL) was bound and determined to maintain a cryptic stance regarding Jobs's health and the company should have known that a lack of transparency on that topic would result in undue pain for shareholders, which it did.
Goldman Sachs (GS) is another example of bungled PR that led to plenty of pain for shareholders. Like BP, Goldman can easily be characterized as arrogant and let's be honest, disdain for the banking sector is about on par with that of the oil industry. Over the past few years, it is hard to find many stocks that beat Apple and Goldman when it comes to return for shareholders and if this pair can be bludgeoned in the court of public opinion, no company is immune. This is a fact that never should have escaped BP.
Well, it has and BP now appears to be about as warm and fuzzy as a Brillo pad. Eleven deaths because of the rig explosion should have motivated BP to take a more delicate approach to its image following the spill. The company could have shouldered the blame and moved to expeditiously clean up the spill. Rather, BP went to Capitol Hill and played the blame game. Worse yet, the company has probably fudged a little bit regarding how much oil is spewing into the Gulf.
Even the weekends do not provide any respite from BP's public relations nightmare. This weekend alone has seen the company say its containment efforts are capturing less oil than was being captured just three days ago. On Saturday, the Obama Administration said if progress is not made soon, it may be forced to remove BP from the cleanup efforts. Unfortunately, the government is in a Catch-22 here because the Interior Department has acknowledged that only private industry (read: BP) has the know-how for the cleanup job.
BP has also refused an order from the Environmental Protection Agency to use a less-harsh chemical dispersant to break up the oil that is floating in the Gulf. So even the little things that BP could to gradually restore its image are missed opportunities because of arrogance. A lot of little things add up to one big fiasco and perhaps one little share price for BP.