Paul Holmes 22 Oct 2002 // 11:00PM GMT
Years of unfairly imported steel, coupled with a global recession, had caused more than 20 steel and steel related companies to file for Chapter 11. Strapped with the additional burden of crippling legacy costs including healthcare and retiree benefits, Bethlehem Steel, the venerated 100 year-old icon and symbol of the American Steel Industry, was in dire straits. Despite state-of-the-art manufacturing facilities and sweeping cost cutting initiatives, the company faced a serious liquidity crisis, which ultimately would result in filing for Chapter 11.
The MWW Group was brought in to develop the company’s communications plan for all audiences – with employees and retirees being of primary importance. In less than thirty days, the team needed to educate itself on the complexities and intricacies of the industry and the company, which included 13,000 employees and 130,000 retirees in multiple locations with 24-hour shifts. To make matters even more challenging, just days prior to the filing, the Board of Directors elected to make a management change. The new CEO Robert S. “Steve” Miller, Jr. had a dramatically different approach to the restructuring and a much more frank and direct communication style. This fundamentally altered the key messages and necessitated a complete re-write of the plan and its documents very quickly. At the same time, the new tone and tenor of the communications plan was a fundamental change from Bethlehem’s historic secretive culture, creating new challenges for the execution of the plan by the second tier of management.
· Secure employee support for new management and buy-in for difficult steps to come
· Reduce fear of Chapter 11 filing, educate employees about Chapter 11
· Lay the foundation for future efforts to mobilize employee and retiree base to support Company’s agenda in Washington D.C.
· Anticipate all scenarios, including union reaction, and prepare management for likely communications issues
· Communicate with employees and retirees through every channel – the media, at work, at home and on the web via spoken, written and video communications
· Provide easy-to-use materials to ensure “roll-down” of messages throughout the organization
· Create written turnkey materials as well as relevant Q&A
· Provide Chapter 11 terminology and easy to understand analogies
· Recruit members of the management committee to be ambassadors to individual audiences and leverage their relationships
· Highlight the turnaround expertise of new CEO, and free him from the “baggage” of the company’s past
· Use frank and honest style of new CEO to make a clean break from the old Bethlehem Steel
· Create the environment for smooth implementation for restructuring efforts, particularly those that involved the union
· Develop complete communications plan and all written materials, customized to employees and retirees
· Hold company wide staff meeting telephonically prior to news “hitting the streets”
· Prepare CEO video for use off-site
· Dispatch Company president and recent past CEO Duane Dunham on Company-wide tour to visit each site and hold employee meetings in each of the three manufacturing facilities on the day of filing.
· Create information center for restructuring news on the company’s Intranet as well on the web site. Mail all materials home to each employee and retiree
· Educate retiree benefits hotline employees with prepared Q&As for the frequently asked questions by retirees.
· Prepare detailed schedules and training for management committee members
· Create restructuring hotline and email for rumor mill management and employee questions
· Establish mechanism for ongoing employee communications – daily and weekly web, voicemail and hotline updates, monthly videos and frequent management visits/employee meetings
The ultimate gauge of the success of our program will be the end result of the restructuring. However, with the company only 60 days into their Chapter 11, it is too soon to tell what the results of their overall efforts will be. However, it is clear that the communications program has been effective.
By all accounts, the filing day communications plan went without a hitch. Specifically:
Managers consistently reported back that they were well prepared and had no questions they couldn’t answer.
A political, secretive culture by nature, employees were heard outside of their meetings expressing their confidence in the new management
The employee hotline received very few calls/questions, indicating thorough and effective information flow
Staffing reductions implemented in the weeks following the filing with no threats of walkouts or grandstanding in the media by Union representatives
The United Steelworkers of America are currently mobilized in Washington for trade relief and healthcare support, with leadership from Bethlehem retirees