Tuesday, June 08, 2010
When it comes to paying money for claims, there is almost no way for a company to win. Someone will always be dissatisfied and feel entitled to more. BP is experiencing this already in the Gulf. Certainly Gulf residents, fisherman and families of workers on the oil platform are entitled to hundreds of millions to compensate for the loss of life and livelihood, but no matter what BP pays, it will never be enough. Payments will be a source of bitterness for many and an enduring reputational black mark against the company. It is one more reason why with the eventual costs of lawsuits, penalties and fines that close attention to safety is ultimately a less expensive alternative. It appears now that BP's on-site managers were more concerned about over-running the budget for drilling the well and might have made some poor judgment calls. If that proves true, the company will regret cost-consciousness for decades to come. BP has entered the case books along with Exxon at Valdez and Union Carbide at Bhopal as an example of how to destroy a company's reputation.