"No amount of PR can hide the fact that this company has lost an estimated $2.4 billion, or $3.47 a share, in its third quarter," said Caruba, "and neither is it a secret that CEO Angelo Mozilo was, according to the Wall Street Journal, 'selling company stock like a house afire' as the sub-prime mortgage market headed south."
What public relations can do, however, said Caruba, "would be to help the company get its house in order by drafting a formal standard of ethical behavior and guiding the company's management environment toward competitive, but appropriate, lending behavior. Actions always speak louder than words. Communicating those actions will be part of the PR function."
"It would help to put a muzzle on Mr. Mozilo, Countrywide's CEO," said Caruba, "because he is known for having voiced some unpleasant criticism of his competitors when addressing analysts. It seems obvious that Countrywide needs a new spokesperson and Mr. Mozilo needs to consider retirement."
The Burson-Marsteller team has an enormous job ahead of it, said Caruba. The New York Times reports it has announced the lay-off of 12,000 Countrywide employees as Countrywide's stock value plunged from $45 to $20.
Caruba said, "These PR professionals are going to be more like physicians trying to save a patient than magicians putting out a lot of smoke and mirrors. Their first job will be to revive the morale of the remaining employees, and it looks like they are treating them like children, issuing silly wristbands with the phrase 'Protect Our House.' A lot of straight talk and assurances of continuity would go much further than juvenile stuff like wristbands."
"It's one thing to be competitive, and another to come off looking and sounding like Blackwater mercenaries gearing up for battle," said Caruba, referring to the private security force engaged in Iraq and elsewhere. "Consumers need to know why they should trust Countrywide. Employees need to know former operating practices will no longer be acceptable."
"There's a widespread notion that public relations can make any bad situation good again," said Caruba. "That's just not true. A company's reputation has to be earned through good, ethical service. No amount of PR can make that happen. That's a management objective."
The Caruba Organization is headquartered in South Orange, NJ. It maintains an internet site at www.caruba.com. It has offered public relations and editorial services since the mid-1970s.
