U.S. corporate icons brace for Iraq war backlash
3/3/2003 12:53:27 PM
By Deborah Cohen
CHICAGO, March 3 (Reuters) - U.S. corporate icons such as Starbucks Corp., Coca-Cola Co. and McDonald's Corp. are bracing for trouble and stepping up security ahead of a likely war in Iraq that could stoke anti-American sentiment worldwide and unleash violence against businesses.
U.S. multinationals, which generate substantial revenues overseas, are boosting plant security, adding armed guards, increasing staff training and instituting background checks on potential employees, even rank-and-file workers like cashiers and drivers, security experts said.
"If you hate America, it's real easy to hate Coke or McDonald's," said Lawrence McNaughton, who heads CoreBrand, a Connecticut-based brand consulting firm. "The two primary criteria for determining risk," he said, would be "if you're in business in the Middle East and you're a cultural icon."
Security experts said the most vulnerable sector may be the fast-food industry, led by hamburger giant McDonald's Corp. (MCD) , whose 30,000 worldwide stores with their distinctive Golden Arches are one of the most recognized symbols of American culture. The company has a substantial presence in the Middle East.
YANKEE GO HOME
Increased hostility toward America has already led to a few attacks on businesses linked to the United States in the Middle East, boycotts of American products, and security alerts at U.S. corporate offices in the region.
Saudi Arabian youth have firebombed two McDonald's in the kingdom since November. The home-made bombs caused only material damage but intensified fears among Westerners, who have been the targets of several other attacks.
At least five American-style fast-food restaurants in Lebanon, including two Pizza Hut branches and a KFC chicken outlet, have been rocked by bomb attacks since May.
In Cairo, Egypt, a recent telephoned bomb threat to Citibank, part of Citigroup (C) , led to the evacuation of a large building off a central square where the offices of several foreign companies are located, including Microsoft Corp. (MSFT) and Hewlett-Packard Co. (HPQ)
Consumers in several Middle Eastern countries are shunning American goods, and Iran has banned media advertising for all U.S.-made goods.
The outcry against President George W. Bush's policy toward Iraq has extended to massive protests in Europe. In Britain, Greenpeace volunteers recently raided Esso gas stations and shut off electricity to send an anti-war message to Esso parent Exxon Mobil Corp. (XOM) .
None of the companies contacted by Reuters would discuss the details of their security plans, although several said they were taking steps to cope with a possible backlash.
"The Middle East is an important region for Starbucks and we are concerned about the tense political climate," said Audrey Lincoff, a spokeswoman for the Seattle-based operator of coffee shops.
Atlanta-based Coca-Cola has moved some of its regional management team to Greece from the Gulf state of Bahrain, a company official in the Middle East said on Sunday. While Coke declined to link the move to heightened tensions, anger at the United States is running high in Bahrain, where U.S. flags were burned at demonstrations on Friday.
Michael Cherkasky, chief executive of global security consulting firm Kroll Inc. (KROL) , said companies are spending substanital amounts of money on security, including "... putting in more cameras, narrowing the access, setting off the approachability of cars to buildings."
SECURITY CHALLENGE FOR FAST FOOD OPERATORS
For fast-food operators, which serve hundreds of customers daily at each store, security is even more difficult.
"A lot is being done (on security). They're...going out with more stringent procedures," said Richard McCormick, a vice president specializing in the food industry for Pinkerton, a security firm and unit of UK-based Securitas (SE:000016359) .
McDonald's, suffering from a downturn in its global business and reeling from its first-ever quarterly financial loss, has several hundred stores in Egypt, Israel, Oman, Saudi Arabia and the United Arab Emirates. It also operates stores in Pakistan.
McDonald's major overseas competitor, Yum Brands Inc. (YUM) , parent of the KFC chicken chain, also has a Middle East presence and plans to add 1,000 overseas stores in 2003.
McDonald's and other fast food companies stress that most of their overseas outlets are owned and operated by local franchisees who buy local food products. But consumers are often blind to the distinction.
In a bid to boost flagging sales, the Burger King franchise in Bahrain, a key U.S. ally, recently placed an advertisment in several newspapers explaining that all the ingredients it uses were purchased locally or from fellow Arab states.
In Kuwait, where U.S. marines have been targeted several times, leading regional fast-food company Americana -- which owns the franchise rights of U.S. restaurants such as Pizza Hut, Hardees and KFC -- took pains to point out that it is "100 percent Arab" in a multi-million dollar media campaign.
Fred |
