July 3, 2014

Press Largely Fails to Note Or Downplays That New VA Director Was Forced Out of P&G

The identity of President Obama’s nominee to head the scandal-plagued, bloated mess known as the Veterans Administration was known on Sunday.

Very few news outlets (the Fox news item just linked is an exception) noted that Obama’s pick was particularly odd because McDonald’s run as CEO at Procter & Gamble was not considered a success. He was essentially forced into retirement after four years at the helm in May 2013.

Fox’s story tells readers the following (bolds are mine throughout this post):

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McDonald, 61, is a native of Gary, Ind., who grew up in Chicago. He was at the helm of Proctor and Gamble — a Fortune 500 company with more than 120,000 employees — from July 2009 to July 2013. While there, he was known for trying to make steep cuts to the company’s large staff, but was also replaced last year for various reasons.

Under McDonald’s leadership, the company struggled to grow under increased competition and global economic challenges. Critics suggested he was having trouble getting the 150-year-old-plus company to fire on all cylinders.

Investors, including activist investor William Ackman, voiced frustration over the company’s slow revenue growth and stagnant market share gains. Ackman, who took a 1 percent stake in the company, pressed for the company to streamline operations and improve results.

In a letter announcing his retirement from P&G, McDonald wrote, “This has been a very difficult decision for me, but I’m convinced it is what is in the best interests of the company and you.”

“During the past year, much attention has been focused on me from several angles, which has been a distraction that is not in our best interests,” he wrote.

P&G’s eagerness to have McDonald exit is underscored by the fact that it had to talk the company’s previous CEO, A.G. Lafley, into coming out of retirement to get the company back on track.

I should also note that McDonald was at P&G for 33 years. So it’s not like they guy has a great breadth of experience in the business community. It’s reasonable to ask if McDonald isn’t just another person President Barack Obama can boss around instead of rely on, fitting a long-term pattern of weak hires.

It would appear that most of the press doesn’t want us to ask such impertinent questions.

At the New York Times, a 20-paragraph report on Monday by Michael D. Shear and Richard A. Oppel Jr. made no mention of how controversial his tenure was or how his departure was virtually forced upon him. But the pair of reporters found plenty of space to mention McDonald’s contributions to Republican Party candidates.

McDonald’s mediocre to poor performance as P&G CEO also was not mentioned in initial coverage at USA Today, NPR, the Politico, and the Los Angeles Times.

The Associated Press noted McDonald’s departure, but left readers with no reason to believe that he opted out instead of being forced out, and even saved that narrative for paragraphs 16-19 of 21, so they wouldn’t get most readers’ attention or wouldn’t be published at all at most subscribing outlets:

Investors, including activist investor William Ackman, voiced frustration over the company’s slow revenue growth and stagnant market share gains. Ackman, who took a 1 percent stake in the company, pressed for the company to streamline operations and improve results.

In a letter announcing his retirement from P&G, McDonald wrote, “This has been a very difficult decision for me, but I’m convinced it is what is in the best interests of the company and you.”

In a surprise move, McDonald was replaced by the man he had replaced, former P&G CEO A.G. Lafley.

Such a nominee in a Republican or conservative administration would not be so fortunate. The headline would read: “Failed CEO Tapped to Run Scandal-Plagued VA.”

The Lafley move a P&G was really a desperate move to get a ship which had been drifting back on course. Obama’s decision to hire McDonald might be desperate in a different way, i.e., an indication that either a stronger person wasn’t available, or a stronger person wasn’t sought.

To its credit, the Washington Post’s initial report and a follow-up yesterday did not gloss over McDonald’s problems at P&G. A CNBC video on Monday also did a fairly creditable job, indicating in a caption that McDonald “stepped down amid investors’ pressure.”

Still, the vast majority of Americans who follow the news probably believe that McDonald’s tenure at Procter somehow strongly qualifies him to run the VA. He may do a great job, but if he does, it will be in spite of and not because of his experience, background, and decidedly mixed track record.

Cross-posted at NewsBusters.org.

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