I have spent much of the past week swinging on a pendulum over the BP oil spill and the plight of Tony Hayward, the CEO. Hayward is bearing the brunt of criticism for the oil spill in the Gulf of Mexico and I can’t decide if that is fair or not. One moment I swing towards the view that, as CEO, he must carry the can. Then I swing the other way and believe it is unfair to beat up on Hayward. He has only been in the job three years and had no personal responsibility for this disaster.
Of course Hayward hasn’t exactly helped matters with some ill chosen phrases. First he said that there was a lot more water in the Gulf than there was oil or dispersants. On another occasion he said there would be “very very modest” long term environmental impact from the spill. And most recently, in frustration he said he too was looking forward to getting his life back. But speaking such words to people whose way of life may be destroyed, is crass at best. It is not surprising that Hayward has apologised profusely.
But hang on –once again my pendulum is swinging the other way and I think, which one of us wouldn’t make the odd silly comment if we were under the pressures he is under? He has conducted dozens of interviews and briefings. Should we condemn him for a few ill chosen words that were taken out of context?
Tony Hayward is an oil man through and through. From his degree to his life-long career at BP he knows his industry backwards. He was made CEO to tighten up the company which had been running wayward and involved in too many safety scandals. He has only been at the helm for three years and it is easy to see this latest crisis as a legacy of the previous way of doing things rather than an indication of how he runs the company.
Possibly more than any other executive in the company, Tony Hayward knows that BP can financially withstand this crisis. He is the former group treasurer. He knows the balance sheet backwards. Even with the share price down 34 percent he was able to tell investors “it’s important to remember the company is working very well operationally” and that “relative to the company’s cash flow it’s manageable”.
But wait a moment — ‘cash flow manageable?’– in a crisis that is devastating large parts of the Gulf Coast? That doesn’t sound very relevant to those fishermen and local residents who are watching their livelihoods being fouled by the oil and who care little about manageable cash flows unless it relates to their compensation.
Even the decision on the BP dividend has me, well, divided. On the one hand, BP can afford to pay it, so why shouldn’t it? Millions of people rely on BP’s billions of pounds in dividend payments. It’s estimated £1 in every £7 of dividend payments comes from BP so it is important for pension funds, investment trusts and many who are retired.
But on the flip side is President Obama and the US Administration who have criticised the payments. “What I don’t want to hear is when they’re spending that kind of money on their shareholders…that they’re nickel and diming fishermen…in the Gulf.” It seems politically incorrect to pay investors while there is so much oil sloshing on the beaches.
I am now truly dizzy with all this pendulum swinging over BP. Thankfully I don’t think all this swinging will be doing much harm to Mr. Hayward. After the latest round of bashing he has commented. “I’m a Brit. Sticks and stones may break my bones but words will never hurt me.” That may be true but, oh dear, was it wise to say it? I feel the pendulum about to…
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Richard Quest is a CNN correspondent based in London, host of the weekday one-hour program “Quest Means Business”. For program highlights and more, go to www.cnn.com/qmb