The Perils and Potential Rewards Of Crisis Managing for Firestone
                    September 8, 2000

                    By KATHRYN KRANHOLD and ERIN WHITE
                    Staff Reporters of THE WALL STREET JOURNAL

                    The nadir of a corporate crisis may be when the crisis-management
                    counselor walks away in frustration.

                                         Although neither side will publicly discuss why
                                         Omnicom Group Inc.'s Fleishman-Hillard quit the
                                         Bridgestone/Firestone account this past
                                         Sunday, those familiar with the situation say the
                                         giant public-relations firm grew disturbed with
                    Firestone's refusal to communicate the breadth and seriousness of its

                    Now Firestone is looking for a new crisis manager, and at least one firm
                    the tire maker has approached declined the job. Bob Druckenmiller, chief
                    executive of Porter Novelli, also owned by Omnicom, says his company
                    talked with Firestone over Labor Day weekend about possibly taking on
                    the account but ultimately declined. "The feeling was that we couldn't
                    get in there and be helpful under the circumstances," says Mr.

                    Still, a number of other firms are interested in succeeding Fleishman.
                    Part of the attraction: According to one crisis manager, the Firestone
                    account could easily generate $1 million of fees a month.

                    For an incoming agency, the situation could be a no-lose proposition --
                    just as the debacle quickly became a no-win proposition for Fleishman,
                    some industry insiders say. If the new agency is able to polish
                    Firestone's tarnished image, it will be perceived as savvy, even heroic. If
                    its efforts fall short, there won't be much fallout because Firestone is
                    already in such serious trouble.

                    Fleishman, according to people familiar with the situation, was unaware
                    that a tire problem loomed that would put Firestone, a unit of Japan's
                    Bridgestone Corp., in crisis mode only two weeks after the agency was
                    hired. Firestone's announcement that it was recalling 6.5 million tires
                    effectively put the company under siege.

                    As the crisis unfolded, Fleishman executives concluded they were
                    receiving incomplete and questionable information from Firestone
                    executives in the U.S. This made it difficult to give good advice or to
                    effectively represent the company, say individuals familiar with the

                    Christine Karbowiak, Firestone's vice president of public affairs, says "to
                    the best of our ability, we provided information." She says the
                    "integrity" of the information provided to Fleishman executives "has
                    never been an issue."

                    In any case, Firestone didn't follow most of Fleishman's advice, relying
                    instead on the cautious counsel of its lawyers, individuals familiar with
                    the matter say. The agency, for example, is said to have urged
                    Firestone to move forward with a proactive plan of action to restore
                    consumer confidence. This included issuing an immediate apology for
                    the faulty tires and quickly recalling and replacing those tires.

                    Instead, Firestone was either slow to respond or waffled, according to
                    individuals familiar with the situation. Ms. Karbowiak says "everyone's
                    advice is considered and acted upon as appropriate."

                    Last Friday, after the National Highway Traffic Safety Administration
                    issued a consumer advisory saying an additional 1.4 million tires should
                    be inspected, Bridgestone/Firestone issued a statement saying few of
                    those tires were still on the road. Nonetheless, it offered to replace
                    those tires if owners were concerned about them.

                    Then, the very next day, Bridgestone/Firestone issued a statement
                    from Masatoshi Ono, its chairman and chief executive, retracting the
                    Friday offer. Instead, Mr. Ono equivocated, saying: "If the tires are
                    subject to our Bridgestone/Firestone warranty program, the tires will be
                    adjusted and processed accordingly."

                    Ms. Karbowiak says the second statement was a clarification. Although
                    the company wasn't offering to outright replace customers' tires not
                    under warranty, she says, Firestone has had a store policy that
                    customers can return tires and receive a discount if they replace them
                    with Firestone tires. The discount is based upon how used the tire is. If
                    a customer has used up 50% of the tire, the customer will receive 50%
                    off the price of a replacement Firestone tire.

                    But a frustrated Fleishman resigned the next day. (Fleishman provides
                    public-relations advice to Dow Jones & Co., which publishes The Wall
                    Street Journal and

                    In fact, Fleishman was the second agency to part ways with Firestone.
                    Burson-Marsteller, the world's biggest public-relations agency, worked
                    for both Ford Motor Co. and Firestone in the months before the tire
                    recall was announced. Individuals familiar with the situation say Burson
                    learned about the tire problem and the possibility of a recall not long
                    before it became public. The firm feared a conflict in PR strategy
                    between its two clients in what would become one of the biggest
                    product recalls since Perrier cleared store shelves of its bottled mineral
                    water in 1990.

                    Burson alerted Firestone that it was also working with Ford, and the
                    two companies decided to part ways, agency people familiar with the
                    matter say. Firestone's Ms. Karbowiak said Burson stopped doing
                    strategy work for Firestone in late May but continued to help the agency
                    until shortly before it hired Fleishman in mid-July.

                    Burson continues to work with Ford, which is parent Young & Rubicam's
                    biggest client, but it isn't providing the auto maker with advice on the
                    tire recall. Ford is handling the crisis internally using its own staff,
                    industry executives say.

                    Firestone's Ms. Karbowiak declined to discuss the public-relations firms
                    that the company has contacted or is considering hiring to replace

                    But the tire maker or its representatives have already contacted
                    Ketchum, another Omnicom unit. David Drobis, Ketchum's chairman,
                    says the firm is considering taking on Firestone, and is planning to meet
                    with the company within a week.

                    Robbie Vorhaus, chief executive of the New York firm Vorhaus & Co.,
                    says he was also approached this week by a Firestone "intermediary."
                    "We told them what Vorhaus is known for -- helping companies tell the
                    truth," says Mr. Vorhaus. "If they want help in telling it, we'd be happy
                    to help them."

                    In addition, Shandwick International's Rowan & Blewitt, which worked
                    with Exxon Corp. following the 1989 Exxon Valdez oil spill, has been
                    contacted by a Firestone intermediary, says a person familiar with the
                    situation. The firm, a unit of Interpublic Group of Cos., declines to say
                    whether it is pursuing the account.

                    Other firms that could be candidates for the job include Edelman Public
                    Relations Worldwide, and GCI Group, a unit of Grey Global Group. Larry
                    Kamer, who heads the crisis practice at GCI Group, says he would
                    welcome the business, noting that parent Grey has long been a major
                    ad agency for Firestone. Mr. Kamer declined to comment on whether his
                    firm has been contacted.

                    Most observers say that Fleishman made the right call in resigning and
                    doubt the decision will affect its crisis-management business -- or scare
                    away future clients. "They had to resign the business. It would do more
                    damage to their reputation than anything else out there," says Allen
                    Adamson, a managing partner at the brand consulting firm Landor
                    Associates, a unit of Young & Rubicam.

                    Indeed, Fleishman's actions have put a spotlight on the
                    crisis-management industry, one of the hottest areas of corporate
                    consulting. Some date the industry back to the 1960s, when companies
                    encountered civil-rights and environmental challenges to products like
                    the pesticide DDT.

                    Back then, Burson-Marsteller, for one, conducted seminars with plant
                    managers on how to deal with protests or explosions for its
                    manufacturing client Owens Corning, says Harold Burson, the founder
                    and chairman of Burson-Marsteller. The firm counseled Dow Corning on
                    how to deal with groups protesting its manufacture of deadly chemicals
                    during the Vietnam War. And it advised Johnson & Johnson during the
                    poisoned Tylenol episode, a major early success for crisis management.

                    More than 60 firms nationwide now counsel corporations involved in
                    product recalls, labor disputes and environmental disasters, among
                    other issues. In 1999, public-relations revenue grew about 30% from
                    the prior year to nearly $3 billion, according to the Council of Public
                    Relations Firms, a trade group. Crisis management accounted for
                    slightly less than 4% of the total, or roughly $100 million.

                    In the last five years, the biggest advertising and marketing
                    corporations, including Omnicom and Interpublic, have bought leading
                    public-relations agencies that boast crisis-management units. Omnicom
                    bought Fleishman-Hillard, now the largest public-relations firm in the
                    U.S., in 1997. And a year later, Interpublic acquired Shandwick
                    International, which owns the crisis firm Rowan & Blewitt.

                    Restoring Public Trust

                    Professional crisis-managers recommend these steps when a company
                    is under stage:


                         Recognize that speed is crucial. "If you don't have an answer or
                         a solution to the problem, you better be able to tell your
                         audiences that you're working on one," says Rich Blewitt,
                         president of Rowan & Blewitt.

                         Place customers' interests above your own. A company must
                         "seem to want to come to the aid of the people in the crisis first,
                         and their own corporate interests last," says Larry Kramer,
                         managing director at GCI Group.

                         Take a long-term view. As the massive Tylenol recall showed,
                         sacrificing a product's image in the short-term can demonstrate
                         responsibility in the long haul.


                         Hide what you know. Being one step behind when evidence of
                         wrongdoing surfaces not only damages your credibility, but also
                         hinders your ability to control the spin, says Victor Kamber, CEO
                         of The Kambler Group.

                         Get tied down in the day-to-day details of running the
                         company; make the crisis No. 1 priority. "You've got to have a
                         bunch of people who drop everything and just deal with this,"
                         says Mark Braverman, principal, CMG Associates Inc.

                         Forget that public perception is more important than reality.
                         Even if you've done nothing wrong but consumers think you have,
                         their view is what matters, says Steven Fink, president of Lexicon
                         Communications Corp.