GE hoax about its taxes won't hurt business
General Electric is the latest big corporation to have its reputation attacked by the Yes Men, a group of activists intends to humiliate corporations by posing as their leaders. GE is big and strong enough to deflect the hit, and the extent of its damage may depend on whether the giant company decides to fight back.
The Yes Men helped the group US Uncut, which goes after corporate tax evaders, send a phony press release to media outlets on Wednesday that said GE was giving a $3.2 billion tax refund back to the US Treasury. At least two news outlets, the Associated Press and Dow Jones, fell for the prank and briefly posted stories on the matter. GE鈥檚 stock, which dropped 14 cents a share after those stories, but began to recover after the AP retracted the story. At the end of trading Wednesday, it was down just 7 cents. But the GE hoax isn鈥檛 likely to have any lasting effect on business, says one expert.
鈥淎 company and a brand that is as big and powerful and diversified as GE is not going to be damaged by something like this,鈥� says Gene Grabowski, senior vice president at Levick Strategic Communications in Washington.
The fake press release came after GE had faced some criticism following a March article in The New York Times that said the company would receive a $3.2 billion tax benefit.
The Yes Men hoax brings the issue of corporate tax benefits back to the public鈥檚 attention, and strengthens the image of the Yes Men, says Mr. Grabowski. The group has been scamming the press for more than 10 years, targeting groups like ExxonMobil, the Republican Party, and the World Trade Organization.
For a business to suffer financially from a hoax, it would have to meet two criteria, Grabowski says: The business must already be vulnerable for some reason, and it must overreact to the prank.
As long as GE doesn鈥檛 respond too strongly 鈥� so far it has just published a of facts about its tax status 鈥� it should be fine.
Last year, a fake press release targeting General Mills duped Dow Jones, The Wall Street Journal, and Fox Business Network. The outlets briefly published stories about how the food manufacturer was under federal investigation in the wake of food recalls, but the story didn鈥檛 seem to affect the company鈥檚 stock.
But some companies smacked with propaganda haven鈥檛 been so fortunate. In 2000, a fake statement about Emulex, a fiber-optic equipment maker, said that the company was reducing its earning statements. Bloomberg News published the story, and Emulex鈥檚 stock dropped by 62 percent in an hour.
鈥淚f I were advising GE on this, I wouldn鈥檛 get too aggressive about calling attention to this, it will probably die pretty quickly,鈥� says Bob Oltmanns, the president of the Pittsburgh-based public relations consultancy OPR Group. 鈥淚t's probably worth a statement, not even a press release."
鈥淎P is the one with the bigger problem,鈥� Mr. Oltmanns says.
But even the Associated Press may not lose the public鈥檚 favor, says Kelly McBride, a senior faculty member for ethics at the Poynter Institute in St. Petersburg, Fla. 鈥淭he public is so accustomed to bad information getting out that it鈥檚 not as damaging as it used to be.鈥�
Reporters could be more prone to fall for fake press releases nowadays because it鈥檚 easy for the prankster to make them look real, Ms. McBride says, and journalists are often too busy to check facts as thoroughly as they should, Grabowski says.
[Editor's note: An earlier version of this story misnamed Fox Business Network.]
