Death on Our Shores
Gross, Daniel, Newsweek
Byline: Daniel Gross
As a foreign company, BP may suffer harsher treatment at the hands of consumers and lawmakers.
In the ordinary course of events, big firms--even the most authentically American ones--like to present themselves as citizens of the world. And why not? For multinationals based in developed countries, most sales and virtually all growth now come from outside their home market.
With operations in 50 countries, Deutsche Telekom is no longer quite so Deutsche. And for even the most irrevocably American companies, cosmopolitanism is a way of life. Coca-Cola's CEO is Muhtar Kent, the son of a Turkish diplomat, who was educated in England and spent much of his career overseas. Coke today gets about 75 percent of its sales from outside North America. The typical company in the S&P 500 relies on non-Americans for about half of sales. "Today very few large companies actually have a national identity. Instead they have a composite global identity," notes David Rothkopf, CEO of Garten Rothkopf, an international advisory firm based in Washington, D.C. Companies frequently reduce their names to acronyms in order to present a more generic, less nationalistic face to consumers around the world. It's AT&T, not American Telegraph & Telephone. Hong Kong Shanghai Banking Corporation presents itself to banking customers in America as HSBC. Swapping specific city and country names for generic acronyms makes sense for globe-trotting companies. For even in an age of globalization, nationalism can be a powerful influence on consumer behavior. And in times of crisis, national biases can come to the fore quickly, and harshly.
That's what BP, the company formerly known as British Petroleum, has learned the hard way. Like other multinationals, BP has in recent years tried to present itself less as a colonial conqueror and more as a citizen of the world. Through international expansion and mergers with American firms, including Amoco, it has become progressively less British. On its Web site, BP, which operates in 100 countries on six continents, notes, "The BP group is the largest oil and gas producer and one of the largest gasoline retailers in the United States." But ever since oil began gushing from the Deepwater Horizon rig in the Gulf of Mexico, BP has become as British as Wimbledon, as foreign as football played with a round ball. As a result, it's possible the company will suffer harsher treatment at the hands of consumers and lawmakers.
When things go bad, it turns out, multinationals turn into homebodies. Since they can't rely on all the nations in which they have outposts to come to their aid, they're effectively renationalized. In the financial crisis, multinational banking firms rushed to domestic capitals for bailouts and asset guarantees. Deutsche Bank and Societe General weren't eligible for TARP funds, and GM has had difficulty getting aid from Germany. …