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Japan’s Kobe Steel, which in October acknowledged quality control problems on products shipped to auto, aviation, railroad and nuclear power companies for at least a decade, relies on Burson-Marsteller for strategic communications counsel.
The WPP unit serves Kobe as subcontractor for its law firm, Paul Hastings LLP.
According to its contract, B-M’s purpose is to “assist the attorneys regarding the various PR implications of pending and/or anticipated legal proceedings and to assist in relation to such legal proceedings at the direction of counsel.”
B-M charges Hastings a guaranteed minimum retainer of $75K with that amount to be re-evaluated on Jan. 31.
Its scope of work includes message development, media relations, digital/social media management, content creation, stakeholder communications, ally mobilization, opinion research and writing/editing of materials.
Kobe Steel, in November, issued a report that concluded that it “erred by elevating the pursuit of short-term profit over the maintenance of scrupulous quality standards,” according to the Nov. 10 New York Times.
CEO Hiroya Kawasaki told a press conference there was a climate where employees didn’t speak up, and if they did, it wouldn’t have made a difference. “As long as the revenue was coming in, management wasn’t interested,” he said.
A second report on the Kobe scandal complied by outside experts is slated for release this month.
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