Crisis Control : Ashland Chairman’s Conduct on Oil Spill Wins Public Support

Ashland Oil Co. Chairman John R. Hall’s admission that his company made mistakes in erecting the diesel fuel tank that burst last Saturday may make company attorneys wince, but his frankness is playing well in the public arena.

“Concern, contrition, openness, serving up the chief executive, being willing to pay for the damages within limits and supporting an outside investigation. Wow! Ring up the bell,” said former American Motors Corp. Chairman Gerald Meyers.

Admirable as it may be, however, acknowledging that Ashland lacked a construction permit and didn’t thoroughly test the tank may leave a cloud over the company, said Meyers, who teaches crisis management to business students at Carnegie-Mellon University.

“You can do all those things right, but you haven’t fixed the problem” that led to the crisis, he said from Detroit Thursday in a telephone interview.

“By the time it’s all over, we’re going to find there was a definite pre-crisis phase,” he said.

“The questions that have to be answered are did you know” in advance, Meyers said. “If you knew, when did you know? What did you do about it? There’s a whole lot in there that raises the specter that it’s beginning to have the fragrance of a cover-up.”

For now, however, Hall appears to be winning the confidence of government officials and the public.

“John was painfully honest, and I hope it doesn’t cost them,” said Bruce Lazier, oil industry analyst for Prescott, Ball & Turben in New York. “The only real negative is why give up an admission that you screwed up? But I think Hall’s admission is right.”

“It is John’s personal style and management’s style to be very candid,” said Ashland spokesman Dan Lacy.

Ashland attorneys “may have winced” out of fear that Hall’s comments will haunt him in the lawsuits that have already been filed, Lacy said.

“He’s got to win in the court of law as well as the court of public opinion,” Meyers said.

Honesty during a crisis is in vogue in management these days, Meyers said. The new attitude follows the public relations disasters after the Three Mile Island nuclear accident, the Johns Manville asbestos case, the Dalkon Shield case and Union Carbide’s Bhopal chemical spill in India, he said.

“It’s a new world of crisis management. Ashland is to be congratulated in how well they’re executing it,” Meyers said.

Hall conducted a news conference in Pittsburgh Tuesday and has been interviewed in person by a number of reporters. He also apologized publicly for the accident.