"Corporate America's Journalism Problem" -- Slate Magazine

[FailingEnterpriseAdmin]

This article is from Slate Magazine today. I'm curious as to what kind of relations Enterprise has with the press. I think they're sort of on the GM side of things, given that they went after our previous discussion board provider.

They're not publicly traded, so they don't have to announce quarterly financials. Maybe they're hoping the press focuses on the St. Louis area charitable works, and not on FailingEnterprise.com.

Admin

Corporate America's Journalism Problem
Wal-Mart makes peace with the media. GM goes to war with it.
By Daniel Gross
Updated Friday, April 8, 2005, at 1:00 PM PT

This week two giant companies took extraordinary efforts to gin up more favorable press coverage. GM, the largest automaker, said it would yank its advertising from the Los Angeles Times—the largest paper in the nation's largest car market—because it was unhappy with the Times'coverage. And Wal-Mart, which generally treats the press like a dead fish, invited reporters to its Bentonville, Ark., bunker for a media day.
Both efforts to manage press coverage—GM's stick and Wal-Mart's carrot—seem clumsy and betray a cluelessness on the part of management about the problems in their own businesses. It's true that neither Wal-Mart nor GM is getting particularly good press these days. But a more compliant media wouldn't much improve their situations.

Businesspeople simultaneously live in fear of the media and yet exude confidence that they can control it. Midlevel and senior executives tend to have contact with reporters from trade publications, which generally offer positive coverage. Most CEOs don't know journalists or associate with them. And since they lack personal connections and experience in the media, the bosses assume that journalism works the same way that other parts of their business do. In other parts of the business, if you give people a glimpse of the benefits to be gained from access, they'll get with the program. If that fails, you can use your market power to browbeat the same people—suppliers, investment banks, and employees—into following orders.

GM has massive leverage over the people that do business with it. When one of its suppliers fails to produce the desired results, GM can yank business worth millions or billions of dollars.

That's what it thinks it is doing with the Los Angeles Times.GM objected in part to this week's column by Pulitzer Prize-winning car writer Dan Neil, which called the Pontiac G6 a flop and called for the ouster of GM CEO Rick Wagoner. It's hard to see what was so out of bounds about the column. Apart from his harsh comments about the quality of the G6, which I'm not competent to judge (take it away, Gearbox), Neil's comment that "GM is a morass of a business case" is a simple restatement of conventional wisdom. And the information Neil used to dump on GM wasn't dug up by a muckraking journalist; it was provided voluntarily by GM or by credit rating agencies and industry data sources. GM's stock is trading at levels it hasn't seen since the early 1990s not because Neil and other journalists are getting medieval on the company, but because investors who read balance sheets, 10-Ks, and the reports from Autodata believe management hasn't come up with a coherent strategy to address the lethal cocktail of high legacy costs and declining market share.

GM was angry because Neil and the media know its business too well. Wal-Mart appears to think the problem is that the media just doesn't know its business well enough. If reporters understood that Wal-Mart executives are human beings who see their role in life as providing cheap goods to working people, they would agree that "Wal-Mart is good for America," as CEO Lee Scott put it.

Scott is missing the point. Access to Wal-Mart may make the journalistic heart grow fonder. But enterprising journalists don't need official sponsorship to break stories or write critical ones. The press knows Wal-Mart top executives are human beings, if occasionally flawed ones.And they also know that Wal-Mart provides low prices to its customers. But Wal-Mart's problem isn't exclusively, or even largely, bad coverage. It's that it's got a troubled business. On Thursday, for example, Wal-Mart announced its earnings would disappoint. When you have a base of $250 billion in sales, it's tough to grow rapidly, especially if your core customers are people whose incomes haven't been rising much and are hit disproportionately by the spike in gas prices. Wal-Mart's stock is slipping into the 40s. As with GM, professional and institutional investors rely more on dry SEC filings than on polemics in the New York Review of Books.

For embattled executives, it's easy and convenient to think that the media—not their business model or management—is the problem. Morgan Stanley CEO Philip Purcell, fighting off an attempted coup, told the Financial Times today that the challenges will go away if the media stop quoting the dissidents.

Perhaps GM's and Wal-Mart's brass may have been led astray by politics. Setting yourself up as an embattled victim of a biased media can sometimes work for powerful politicians (see perhaps, DeLay, Tom). But while voters care about media bias, consumers don't. American shoppers don't make a decision about a $20,000 car or make an extra trip to Wal-Mart just to spite the media elite.



Related in Slate

Mickey Kaus revels in the GM-Los Angeles Times spat here. Moneybox has written plenty about the troubles at GM and at Wal-Mart.



Daniel Gross (www.danielgross.net) writes Slate's "Moneybox" column. You can e-mail him at document.write("")<a href="mailto:moneybox@slate.com...39;</a>');.

[Jeahho]

Whew! I know this is irrelevant to the topic at hand, but it is funny to see an Internet magazine owned by Microsoft commenting on anyone's relation with the press, and public perception of any company.

[ExLossControl]

On a local level, nobody is allowed to talk to the press. All local personnel were to refer all media inquiries (ALL- positive and negative) to Christy Conrad at Corporate. No other comment whatsoever.

I assume that the PR team at Corporate would then huddle up, write an approved statement, and release it to the inquiring body, or give it to the appropriate local executive for handling. Nobody under Area Manager got to talk to the media unless it was positive coverage.

Even when there is positive press, it must be approved- we had a newspaper who profiled a BM in their business section- it was one of those "faces about town" deals where an owner or manager got profiled once a week- picture and questionnaire format article. The BM had to send the questionnaire in to corporate to have the answers done for him, and wasn't allowed to talk to the reporter except to "add local flavor and promote ERAC as a good corporate citizen."

ERAC is very insular with the media. Everything gets vetted through Conrad and the PR team. I imagine they'd like to control the police blotters too- but those are public record and can't be abridged, so when a car is involved in a crash and it gets tracked back to ERAC, it gets published.

Yes, I believe they try to control the media- if they didn't, the old board wouldn't have been shut down, and they wouldn't be monitoring this one (as we know they do).

Hi, Christy!

[iriswalt]

when i worked there we were never allowed to speak to anybody. everyone had to go to st louey