Reputations count

National | Damage control for a tire company; quality control for the Labor Department's summer jobs; and finding the right financial planner

Issue: "Power struggle," May 26, 2001

Too little, too late?
In a bid to salvage its reputation, Bridgestone/Firestone, Inc., has launched an ambitious advertising campaign called "Making It Right." Ads so far have featured CEO John Lampe assuring the public that the company is emphasizing quality control and consumer safety, and racecar drivers Mario and Michael Andretti talking about tire maintenance. The campaign comes a year after Firestone tires on some Ford Explorers were shown to shed their tread and catapult out of control. The Nashville, Tenn.-based tire-maker initially denied responsibility, but the National Highway Traffic Safety Administration uncovered manufacturing defects at some Firestone plants and linked the brand to 88 deaths. Bridgestone/Firestone recalled 6.5 million units; sales of Firestone tires plunged 40 percent; and the company in 2000 had a net loss of $510 million. Ralph Oliva, director of the Institute for the Study of Business Markets at Penn State's Smeal College of Business, said "the public has owned the Firestone brand for a long time," so "if the company properly manages its campaign, it should recover." He may be right. Even Johnson & Johnson recovered quickly from brand-image implosion when in 1982 poison-laced Tylenol capsules began killing consumers who swallowed them. But it was sabotage, not shoddy manufacturing, that tainted Tylenol, and the company immediately recalled every bottle in circulation. Given Firestone's official foot-dragging, American consumers may not be as quick to forgive and forget. Good grades = jobs
Most government job programs have earned a bad reputation by passing out do-little jobs to anyone with a politically well-connected sponsor. The U.S. Department of Labor this month launched an employment program that hopes to do better by providing summer work only to those with good grades and good attendance. Twenty-two centers working with poor teens in San Diego, Los Angeles, Tucson, Boston, Baltimore, Detroit, and other cities will share $20 million in DOL grants for "Youth Opportunity Programs." The grants will also help fund career assessment and counseling, mentoring, summer math and science classes, tutoring, and college preparation programs. Financial planning game plan
The bull market of the 1990s, along with technology like online trading and Web-based financial modeling, helped many consumers feel comfortable about planning their financial futures without professional advice. But recent market volatility has sent more small investors in search of financial planners. That trend merits a warning, according to SmartMoney.com: Some who call themselves "financial planners" have earned a bad reputation for being more interested in their own plans than those of their clients. The title "financial planner" is not regulated by the Securities and Exchange Commission, so shingles bearing the term can belong to everyone from legitimate advisors to insurance salesmen. How to tell the difference?

  • Look for the letters "CFP," or Certified Financial Planner, a designator that indicates professional licensure and continuing education requirements.
  • Ask for the planner's "ADV" form, a government-reporting document that describes the planner's firm, clients, securities, compensation methods, and background.
  • Get referrals from professional organizations such as the National Association of Personal Financial Advisors (napfa.org) and the Financial Planning Association (fpanet.org). Some experts say it's best to stick with fee-based planners instead of those who work on commission. "There are many people who say they do comprehensive planning, but in the end they're trying to sell you a product," explained Eric Donner, president of Retirement Distribution Strategies, a New Jersey-based financial planning firm. Commission-based planners face the temptation to switch a client's investments in order to earn more money themselves, while planners who charge an up-front or hourly fee are free to choose any investment products that seem to fit a client's needs.

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Lynn Vincent
Lynn Vincent

Lynn is a senior writer for WORLD Magazine and the best-selling author of 10 non-fiction books.


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