Safety Kleen Crisis Management Campaign
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Holmes Report
CEO

Safety Kleen Crisis Management Campaign

In March of 2000, Safety-Kleen Corporation, North America’s largest provider of hazardous and industrial waste services, announced the immediate suspension of three top officers and initiated an internal financial investigation.

Paul Holmes

 

In March of 2000, Safety-Kleen Corporation, North America’s largest provider of hazardous and industrial waste services, announced the immediate suspension of three top officers and initiated an internal financial investigation. As a result, the value of the company’s stock fell dramatically. Questions immediately flooded Safety-Kleen’s headquarters from employees worried about the future of their jobs, customers concerned about continued service, regulators asking about taxpayer liability at the company’s 300 facilities and shareholders wondering about the eventual recovery of their stock. The company’s Board of Directors subsequently determined that a filing of Chapter 11 bankruptcy protection would be necessary, given the uncertain financial outlook. Along with the suspension of the Safety-Kleen top leadership, managers in the company’s public affairs department also resigned. Therefore, Safety-Kleen turned to Burson-Marsteller to help guide the company through what has become the most challenging period in its history. Burson-Marsteller assumed responsibility for all of Safety-Kleen’s communications, public affairs and government relations activities. Safety-Kleen filed for Chapter 11 bankruptcy in early June using a communications campaign developed and implemented by a cross-functional Burson-Marsteller team. The filing encompassed 73 of the subsidiaries and billions in dollars in assets, making it one of the year’s largest bankruptcy filings.

OBJECTIVES:

Safety-Kleen is a service-oriented business that relies on its reputation of financial security, steadfast compliance with all laws and unquestionable ethics. The allegations of financial misdeeds by its executives, followed by the filing of bankruptcy protection, could destroy this reputation. Moreover, since it has thousands of representatives making service calls to customers every day, employee confidence is especially critical to Safety-Kleen’s business. The campaign sought to maintain, solidify and even enhance Safety-Kleen’s strong customer and employee loyalty during a difficult period by providing straightforward information concerning its financial challenges and corporate rebuilding.

AUDIENCE:

400,000 customers, 10,000 employees, 72,000 vendors, federal regulators in the United States and Canada, agency regulators in 48 U.S. states and eight Canadian provinces, and thousands of shareholders and other financial contacts.

RESEARCH:

Burson-Marsteller conducted several employee focus groups at the Corporate Headquarters and various field locations to determine morale issues following the dismissal of the top management team and the increase in rumors about bankruptcies, mass layoffs and other fears. The firm also conducted numerous customer interviews to better track the possible elevation of concerns about Safety-Kleen and its financial future. Burson-Marsteller also conducted an internal audit involving 200 field managers regarding the current communication structure within Safety-Kleen and hundreds of outlying branch operations throughout the United States, Canada and Mexico.

PLANNING:

Given that the threat of bankruptcy filing was immediate, and could be initiated at any time – voluntarily or involuntarily – Burson-Marsteller quickly worked to assemble a complete ready-to-go bankruptcy communication plan that could be implemented at a moment’s notice. While one on-site team continued to manage the continually escalating barrage of day-to-day issues regarding employee, government, media and customer relations, another team quietly – yet quickly – worked to assemble the bankruptcy communication program. Within a short time, the bankruptcy team assembled:

A complete bankruptcy primer for employees and their families located on a special off-line Internet site, that would be turned on at a moment’s notice;

Segmented communication pieces written specifically for certain audiences, like various individual customer groups, government officials, key vendors, healthcare and insurance providers and others;

A special toll-free telephone information line, with segmented messages for various audiences and mechanisms to capture callers’ names and numbers for prompt return phone calls; and 

A number of other communication pieces and policies for immediate use.

STRATEGY:

The simple strategy of Burson-Marsteller’s cross-practice team was to be the first to tell Safety-Kleen’s story – before employee rumors circulated, before media stories appeared and before competitors might begin calling the company’s customers – as quickly as possible, given the legal constraints of bankruptcies and public-company restrictions. Given the sheer size and diversity of these audiences – 400,000 customers, 10,000 employees in almost 400 locations in three countries, etc. – a variety of communication channels were to be used to get targeted information out quickly. For this reason, the Burson-Marsteller team worked closely with Safety-Kleen’s various legal counsel to develop information and materials as quickly as possible, in advance of any filing. Given the tight time constraints and the expected national notoriety that the filing would attract, all materials were approved and finalized quickly and readied for immediate use.

EXECUTION/TACTICS:

On June 9, Burson-Marsteller was notified that the bankruptcy filing would be made later that day. The team began its implementation phase:

3:30 p.m. An email was distributed to top executives and managers throughout the organization about an important conference call later that afternoon.

4:30 p.m. – 5:15 p.m. Conference call with 200 managers, conducted by Safety-Kleen’s President and Burson-Marsteller’s account leader, to discuss the forthcoming filing and describe the subsequent communications plan.

5:15 p.m. Confirmation by attorneys of the filing in Federal Bankruptcy Court, with case number.

5:30 p.m. Final language obtained and Safety-Kleen’s CEO authorized initiation of the communication plan.

5:30 p.m. – 6:30 p.m. Communication Plan Activated

All documents revised and made consistent with final language

Notification of NYSE and other markets

News release distributed to news wires across North America

Instruction packets and materials electronically distributed to all managers throughout the organization

Special toll-free telephone lines activated for customers, shareholders and vendors

Special toll-free lines established for employees with paycheck and expense check problems

Special employee Internet site activated, with links activated on standard company sites

Email advisement distributed to all employees, advising them of the filing and providing them with the telephone numbers and web addresses for further information

Individual letters to various key customer groups, vendors and suppliers, regulators, government officials, financial contacts, and other important audiences distributed via computerized fax

All completed by 6:30 p.m.

7:30 p.m. Packages of additional information, President’s video and other materials packaged and shipped to 350 company locations in North America for next-morning delivery.

8:30 p.m. Personalized letters completed and distributed to 161 Members of Congress

Throughout this evening, a separate media relations team conducted numerous interviews with media outlets in the United States, Canada and Mexico.

OBSTACLES:

Time was of the essence to ensure that Safety-Kleen’s customers and employees, particularly, fully understood the filing and maintained their trust and confidence in the company. Additionally, as with more complicated and complex legal proceedings, the specifics of the matter continued to change throughout the day. This put more emphasis on Burson-Marsteller’s coordination and close communication with Safety-Kleen and its various law firms.

EVALUATION/MEASUREMENT OF SUCCESS:
Safety-Kleen emerged from this ordeal with even stronger employee, customer and vendor loyalties, due to the appreciation of these audiences toward the company for distributing timely, accurate and candid information. Using methods developed during the bankruptcy – such as the managers’ network, the customer computerized-fax network, the new employee website and others – Safety-Kleen has dramatically increased its ongoing dialogue with these audiences that never existed before the bankruptcy. Two new Web sites, a monthly customer magazine, CEO and president “fireside chat” events throughout the organization have all been creating an enhanced base from which to build. As a result, Safety-Kleen has emerged from the crisis stronger than ever – with sales in some divisions up to 181 percent of goals, despite the summer’s turmoil – and is paving the way for new foundation with even stronger relationships.

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