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June 14, 2010, Vol 1, No. 8
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Managing Outcomes is published by Tony Jaques, Director of Issue Outcomes Pty Ltd, for people who work in issue and crisis management and strive for planned, positive outcomes. Please feel free to share with colleagues who may be interested, or suggest they subscribe to this newsletter at www.issueoutcomes.com.au |
Shrek teaches a glass maker about transparency
When cadmium was found in drinking glasses sold to promote the new Shrek movie, the two companies most directly involved demonstrated the starkest possible contrast in issue response.
Food giant McDonald's, which commissioned the glasses, immediately went public and announced a recall. However, the company which made the offending items seemingly tried to hide the details behind a smokescreen of denial and obfuscation.
Early in June McDonald's learned that paint used to decorate the Shrek souvenir glasses contained cadmium within the legal limit but slightly above stricter health guidelines developed by U.S. Consumer Product Safety Commission. Coming just two weeks after a high profile recall of Chinese-made Mylie Cyrus-branded jewellery with high cadmium levels, McDonald's announced a recall of 13.4 million Shrek-themed glasses distributed in the United States and Canada, and offered a refund on more than seven million already sold. |
McDonald's said in a statement the glassware was evaluated by an independent third-party laboratory and was found to be in compliance with all applicable federal and state requirements. "However, in light of the CPSC's evolving assessment of standards for cadmium in consumer products, McDonald's determined in an abundance of caution that a voluntary recall of the 'Shrek Forever After' glasses is appropriate." Their website spelled out the detail of the problem and explained to consumers how to get a refund.
It was a textbook issue management strategy of “tell the truth and tell it quick,” but the same could not be said of the supplier of the glasses, Arc International North America, a subsidiary of the giant French glass products maker Arc, best known as the maker of Pyrex cookware.
An early Reuters report said: “A spokesman for Arc declined to comment on whether the glasses were made in the United States or abroad,” although McDonald's recall website openly stated that the glasses were indeed manufactured in the United States. According to a later AP report, Ron Biagi, Arc's VP of North American Sales said the company was “surprised and confused” when it got word of the recall. "It could have been any glass company,” Biagi said. “We all do the same thing using materials from the same suppliers." He added: “Our feeling is these glasses are safe." |
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In a separate AP report, Tom Reed, VP of Human Resources at Arc International’s plant in Millville, New Jersey, said the company received a copy of McDonald’s memo on the recall, but had heard nothing else. The report went on: “Reed would not say where the paint was made or whether it’s used in Arc’s other products.”
The "surprised and confused" glass maker issued a formal press statement via PR newswire in the name of Fred Dohn, CEO Americas for Arc International, who unhelpfully stated: "All the products, whether decorated or undecorated, that Arc International is delivering on the markets meet the highest standards of quality and safety. Arc International is a professional manufacturer that stands behind all its products. We therefore see this as an internal decision by McDonald's and will be investigating the matter once we receive more information." This remarkably uninformative statement was not posted on the corporate website of Arc International in Paris.
When it comes to reputation, McDonald's has a great deal at stake, with its brand alone worth over $32 billion, the world’s sixth most valuable brand. But Arc is no shrimp either, with global sales in excess of one billion euros. However, when it comes to issue management, the French glass company still has a lot to learn about transparency. |
A Parting ThoughtSome companies change their ways when they see the light. Others have to wait until they feel the heat
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