How Anaheim Chemical Firm Tried to Contain Public Relations Mushroom Cloud

The sort of problem every executive dreads began for Stepan Co. on a warm Thursday afternoon two weeks ago, when an equipment failure released a cloud of sulfur trioxide into the plant’s Anaheim neighborhood, causing vomiting, breathing problems and irritated eyes and throats among about 100 of the neighborhood’s residents.

Stepan executives waited about three days to tell residents that the gas is not thought to be permanently harmful. It thought the Fire Department had handled that chore, the company said.

But by the weekend it became clear that the company not only had a pollution problem--which closed the plant after the accident--but a public relations problem as well.

“We did not perceive (the problem) quickly,” said William W. Meier, a senior vice president for finance and administration at the company’s suburban Chicago headquarters. “This has been a learning experience for us.”

Although the company has been cited in the past by city and air quality officials for failing to report at least three previous chemical leaks, Stepan characterized the Feb. 4. incident as its first real public relations crisis.

Stepan, which makes chemicals for detergents and soaps, is a small company with sales last year of $289 million and fewer than 1,000 employees. Because it is small and does not cultivate a high-profile public image--Stepan doesn’t sell its products to the public--the company does not have an executive whose sole responsibility is public relations, unlike larger companies.

Instead the company trains middle managers to do both their own jobs and handle public relations, Meier said, while relying on the advice of an outside public relations firm.

The system’s performance got mixed reviews inside and outside the company.

The company didn’t react quickly enough to the worries of local residents that exposure to the gas might cause permanent harm, Meier said.

“It was a couple of days before we really became aware that a portion of the community felt it wasn’t informed,” he said. “We weren’t getting any calls, except for a few calls from the press.”

On Saturday the company held a public meeting, brought an expert on toxic chemicals and an interpreter to the largely Latino neighborhood. Stepan also promised to pay the bills for the 15 people who had been briefly hospitalized after the leak.

But that didn’t go over too well either with some of the 40 people in the audience, one of whom said the company didn’t care enough about the people in the neighborhood who inhaled the fumes. Another resident sued the company Tuesday.

Of such stuff are executives’ nightmares made. But a company can minimize its risks in a crisis with a few simple rules, local public relations companies said.

First, get the information out quick and--if faced with a choice of fudging unfavorable information a little or biting the bullet--bite the bullet.

“Maximum disclosure is the best technique, particularly when you’re dealing with the public’s health,” said J.R. Hipple of Salvati Montgomery Sakoda & Co., a Santa Ana-based advertising and public relations company. “Where a company gets in real trouble is when it tries to hide the truth.”

And make sure your executives have some training in public relations techniques, said Jeremy Anwyl, president of Irvine’s U.S. Promotions, one of the largest local public relations and ad companies.

“Most of the larger corporations are getting in tune with that,” he said. “It’s the smaller companies that get into trouble, where you may have an owner or executive who tends to make snap decisions.”

It’s not just manufacturing companies that have these kinds of problems, said Anwyl, whose company works mostly for auto dealers. While retailers don’t often cause pollution problems, they do sometimes get investigated for all sorts of questionable business practices. The same principle of full disclosure should apply, he said.

“The company’s usual attitude is to have the news hit on a day when the news is heavy on the theory that it won’t be noticed,” Anwyl said. “I think that’s a mistake.”

On balance, Stepan executive Meier said, the company is satisfied with its public relations performance regarding the leak, and there are no plans for big changes.

In the meantime, Stepan is seeking permission from the South Coast Air Quality Management District to resume production of sulfur dioxide and sulfur trioxide. The district, which denied permission last week, is scheduled to continue its review of the firm’s request today.