Introducing the Chief Appeasement Officer

You won’t find the “chief appeasement officer” on any company’s organizational chart. But it’s a new position – or at least mindset – spreading like wildfire these days through corporate management.The CAO’s guiding philosophy can be summed up as follows: A business should make concessions to its detractors – even disparage its own product, if necessary – in an attempt to neutralize outside criticism even if such concessions will, ultimately, undermine shareholder interests.No doubt it was BP’s CAO who devised its $100 million-a-year public relations campaign characterizing oil as a “necessary evil” and recasting its corporate identity from “British Petroleum” to “Beyond Petroleum” – an awkward sleight-of-hand designed to disguise the fact that BP is – an oil company.Though the move did earn BP a spot last week on Global100.org’s list of the “Most Sustainable Corporations in the World” – for whatever that’s worth – jumping on the anti-oil bandwagon may not prove highly “sustainable” to BP’s long-term interests.McDonald’s CAO apparently is in step with the latest trends in class action litigation – namely that french fries are the new tobacco.Instead of defending its product and arguing that personal responsibility is key to a healthy lifestyle, McDonald’s admitted in ongoing litigation that any processing its foods undergo serves to make them “more harmful” than unprocessed foods.That scientifically baseless admission is just the latest repudiation by McDonald’s of its own fare.In 2002, McDonald’s announced that the oil it cooked french fries in was unhealthy and that it was switching oils. More than two years later, the oil change has yet to be made as there were problems with the substitute oil and activists are ripping Mc-Donald’s for not fulfilling its promise.The cooking oil fiasco may come home to roost now that a federal appellate court breathed new life last week into a class-action lawsuit against McDonald’s alleging its food made the plaintiffs fat and caused health problems.McDonald’s revenue and earnings may have risen sharply for 2004, but exactly what are the long-term prospects of a company willing to denigrate its products as a health hazard?Customers and employees aren’t safe from the CAO either.Ford CEO William Ford Jr., in his quixotic quest to befriend environmentalists, supports a 50-cent per gallon gas tax. The current tax is 18.4 cents.Ford says the gas tax would make fuel economy “a purchase motivation for the customer” and “anything that can align the individual customer’s purchase decisions with society’s [read ‘environmentalist’s’] goals are the way to go.”Mr. Ford’s wish was fulfilled, in a way, as gas prices did soar last year – causing Ford to cut production by 8 percent for the first quarter in 2005. Since pickup trucks and SUVs account for more than 50 percent of the U.S. light-vehicle market, Mr. Ford’s support for higher gas prices should give Ford workers some real cause for concern.And what about Mr. Ford’s customers who would pay more at the pump when filling up the Ford pickup trucks and SUVs they already own? “Let them eat higher prices” is something you might expect from an out-of-touch heir-to-the-throne, but not from a customer-conscious corporate manager.Merck CEO Raymond Gilmartin yanked the popular arthritis drug Vioxx from the market – thereby incurring a market capitalization loss of about $40 billion, not to mention possible insolvency caused by a flood of lawsuits – in order to maintain its image as one of America’s leaders in the appeasement strategy known as “corporate social responsibility” (CSR).Though Merck could have re-labeled Vioxx with new warnings, Mr. Gilmartin panicked in favor of placating critics, prompting the National Post (Canada) to ponder, “The question is not what CSR can do for Merck now, but what CSR did to Merck.”And let’s not forget chicken seller KFC’s recent negotiations with animal rights activists about the treatment of chickens destined for deep fryers. How could there possibly be room for compromise between a fast-food company that sells chicken and a radical group that promotes a vegan diet?Appeasement may be a widespread strategy among corporate management – but that doesn’t make it sound.Mr. Milloy publishes CSRwatch.com and is an adjunct scholar at the Competitive Enterprise Institute.

Introducing the Chief Appeasement Officer

Introducing the Chief Appeasement Officer

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