01/06/2011 - 09:22

Analysis: no real change at FMG

01/06/2011 - 09:22


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A lot happened, but nothing changed at Fortescue Metals today - but isn't that the nature of public relations spin.

A lot happened, but nothing changed at Fortescue Metals today - but isn't that the nature of public relations spin.

According to the official company line, its founder and major shareholder, Andrew Forrest, will retire as chief executive on July 18, the eighth birthday of the FMG business.

As a news event that sounds significant. Forrest, after all, is one of Australia's richest men with a controversial track record of wins and losses.

But, dig a little deeper and what you find is that Forrest is simply moving one door up in the formal pecking order. Rather than being CEO he will now be chairman.

Switching deck chairs is one way of describing an event which isn't really an event at all because no matter what spin the PR people apply to Forrest's move he will remain in charge of FMG, and all around will do what they're told.

The man who will be closest to this changing of names on the office doors will be the incoming CEO, Nev Power. It's a fair bet that he will do nothing without first consulting Forrest.

There is, however, a more significant point to make about today's non-event at FMG which will attract headlines and commentary over the next 24-hour cycle of news - and that is the power of PR.

Once backroom advisers, the modern PR man sits alongside most chief executives and government ministers. There is probably not a decision made in a major company, or in government, which does not have some input from a PR consultant.

On the one hand this might not be a bad thing, at least the arguments in support of a decision are generally well constructed, even if they are also generally devised to inform as much as they are designed to deceive.

FMG's announcement on Forrest is a case study of misleading the reader. The first paragraph announces his retirement, and it's not until the fourth paragraph that the truth dawns.

Forrest has not left the company he founded. He is simply swapping hats and will remain the key man at the company, which leads back to that opening comment about nothing changing.

So, why is it that we have become captive to the short-term news cycle and PR spin.

The answer might be found in a U.S. survey of the rise-and-rise of the PR man over the past 30 years, a time when traditional media slipped painfully into the internet world, and jobs for journalists started to dry up.

Back in 1980 there were an estimated two PR staff for every working journalist. Today, the ratio is five-to-one, 5 PRs feeding their version of the truth to every journalist.

Two quick points need to be made. Those are U.S. figures, but it's reasonable to assume that we're following the trend and secondly, these are the thoughts of one of the increasingly rare journalistic survivors.

And, it is through the eyes of a survivor that the FMG non-announcement is being seen because even if the PR Mixmaster is set to high spin there is no escaping the fact that very little, apart from a change of job title actually happened.

This is not a criticism of Forrest. He has done a terrific job in first having a vision, then in creating a business which employs thousands of people, while also finding time to become a significant philanthropist.

It is a comment on the PR industry which seizes on any event as an opportunity to snatch a headline for the client, and it is a criticism of traditional media for not seeing through the spin.

Meanwhile, back at FMG there is the possibility that Forrest is making his move ahead of the final legal challenge against his conviction for misleading investors --- but, if that's the case why didn't the PR spinners say so?


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