Wowzers.
You can read the AP story here if you already haven't read it.
BP stock nose dived 15 percent today (long before this story hit the wire... it will be interesting to see what happens tomorrow).
I was watching Fast Money tonight and they had a guest on who made the brash call that he believes BP will cease to exist in the near future.
I have to say, I wouldn't be surprised. BP shares are down around 60 percent since 2007. I love a depressed stock, but even I won't touch BP in it's current state.
This (man-made) natural disaster is quickly mounting into a PR disaster of truly epic proportions - with the President essentially promising to kick some ass, the oil spill estimates constantly growing, the disaster plan clearly nothing more than a creative writing task to satisfy regulators, talk about changing laws just so they can prosecute BP as harshly as possible and politicians (in response to citizens) calling for blood - I just don't see how BP gets itself out of this mess now.
You run down the checklist of typical actions to take and none of them will have a containing effect in my opinion:
- fire the CEO? fine, but the oil will keep spilling.
- Commit 100 billion (available as of tomorrow) from BP's coffers to clean up the mess and repair the damage? I suppose you could, but your stock price would crash even harder.
- Have the CEO live at ground zero? To be honest, it's not worth the risk to his life at this point (which I think he'd be doing if he gets anywhere near the general populous).
So what is there left to do?
Despite the seemingly hopelessness of this situation, I don't believe things are ever hopeless. There's the old saying that it's never to late to turn things around.
I'd encourage you to read this mock address someone wrote that is what they think Tony Hayward should give (CEO of BP). You can read it here.
I think at this point, the only thing left for BP to do is something radical. Beyond all of the above (and the suggestions I made in a previous post)... at this point I think they have to create within BP a social responsibility division that audits corporate activities and reports on any malfeasance. The division, while paid for by BP, would have to at the same time be an independent body.
Essentially, for lack of a better analogy, the equivalent of a parole officer who would monitor BP and report quarterly that BP has not broken any laws or behaved in an unethical manner. A division that would supersede the lawyers and even the CEO himself.
This type of over-the-top commitment to transparency and corporate responsibility might just save them from the worst case scenario.
That said, I don't expect any of these suggestions will take place.
Why?
Because the people on whose watch this took place have bigger problems. Right now a lot of them know they will face an investigation with the possibility of criminal charges - that's what's keeping them up at night at this point (I would guess).
My prediction: They will cap the oil spill in late August, the CEO will be fired, a new CEO will come in and systematically hand over anyone tied to this to the government. The new CEO will throw himself on the sword of public opinion and ask for time to restructure and develop plans to guide BP in the future. The world will breath a sigh of relief... until the next crisis hits (who knows what that will be) and everyone will forget about BP.
Although, I wouldn't be surprised to see a collation of international government forces combine to place BP in government receivership, essentially nationalize (globalizing?) BP under government powers.
It would be a great PR move for governments (who are almost as hated by the public as company's like BP). It would be seen as evidence that 'elected governments' still have the ability to take matters in to their own hands when free market entities run amuck.
In an ironic twist, they would be seen as the rescuers that tamed 'the beast' - which BP had hoped would be how it would be seen in capping the oil spill.
You can read the AP story here if you already haven't read it.
BP stock nose dived 15 percent today (long before this story hit the wire... it will be interesting to see what happens tomorrow).
I was watching Fast Money tonight and they had a guest on who made the brash call that he believes BP will cease to exist in the near future.
I have to say, I wouldn't be surprised. BP shares are down around 60 percent since 2007. I love a depressed stock, but even I won't touch BP in it's current state.
This (man-made) natural disaster is quickly mounting into a PR disaster of truly epic proportions - with the President essentially promising to kick some ass, the oil spill estimates constantly growing, the disaster plan clearly nothing more than a creative writing task to satisfy regulators, talk about changing laws just so they can prosecute BP as harshly as possible and politicians (in response to citizens) calling for blood - I just don't see how BP gets itself out of this mess now.
You run down the checklist of typical actions to take and none of them will have a containing effect in my opinion:
- fire the CEO? fine, but the oil will keep spilling.
- Commit 100 billion (available as of tomorrow) from BP's coffers to clean up the mess and repair the damage? I suppose you could, but your stock price would crash even harder.
- Have the CEO live at ground zero? To be honest, it's not worth the risk to his life at this point (which I think he'd be doing if he gets anywhere near the general populous).
So what is there left to do?
Despite the seemingly hopelessness of this situation, I don't believe things are ever hopeless. There's the old saying that it's never to late to turn things around.
I'd encourage you to read this mock address someone wrote that is what they think Tony Hayward should give (CEO of BP). You can read it here.
I think at this point, the only thing left for BP to do is something radical. Beyond all of the above (and the suggestions I made in a previous post)... at this point I think they have to create within BP a social responsibility division that audits corporate activities and reports on any malfeasance. The division, while paid for by BP, would have to at the same time be an independent body.
Essentially, for lack of a better analogy, the equivalent of a parole officer who would monitor BP and report quarterly that BP has not broken any laws or behaved in an unethical manner. A division that would supersede the lawyers and even the CEO himself.
This type of over-the-top commitment to transparency and corporate responsibility might just save them from the worst case scenario.
That said, I don't expect any of these suggestions will take place.
Why?
Because the people on whose watch this took place have bigger problems. Right now a lot of them know they will face an investigation with the possibility of criminal charges - that's what's keeping them up at night at this point (I would guess).
My prediction: They will cap the oil spill in late August, the CEO will be fired, a new CEO will come in and systematically hand over anyone tied to this to the government. The new CEO will throw himself on the sword of public opinion and ask for time to restructure and develop plans to guide BP in the future. The world will breath a sigh of relief... until the next crisis hits (who knows what that will be) and everyone will forget about BP.
Although, I wouldn't be surprised to see a collation of international government forces combine to place BP in government receivership, essentially nationalize (globalizing?) BP under government powers.
It would be a great PR move for governments (who are almost as hated by the public as company's like BP). It would be seen as evidence that 'elected governments' still have the ability to take matters in to their own hands when free market entities run amuck.
In an ironic twist, they would be seen as the rescuers that tamed 'the beast' - which BP had hoped would be how it would be seen in capping the oil spill.
Comments
Post a Comment