BP's 'Ass Kicking' by Obama Angers Brits, Sparks Pension Concerns
Delia Lloyd
Correspondent
Posted:
06/11/10
On the eve of one of the most highly anticipated matches in the World Cup, the tension between the United States and the United Kingdom isn't just over soccer. The gulf oil crisis -- and BP's role in it -- has thrown up a new source of conflict between the two countries.
In his newfound role as "ass kicker in chief," President Barack Obama has set his sights on the multinational oil giant, BP. Earlier this week, the president suggested that BP's chief executive, Tony Hayward, deserved to be fired for his management of the spill that began on April 20 and has continued to spew oil at levels twice as great as initially imagined. On Thursday, Obama summoned the company's board chairman, Carl-Henric Svanberg, to a White House meeting next week to discuss both cleanup and compensation claims.
The U.S government has demanded that BP, in addition to paying all cleanup costs, pay the wages of thousands of American workers laid off since the Deepwater Horizon rig exploded. U.S. Attorney General Eric Holder has refused to rule out seeking an injunction to stop BP from giving shareholders a £10billion dividend (roughly $14.7 billion) next month. BP is also threatened with prosecution if a government investigation determines possible wrongdoing in BP's management of the well.
None of this is going down very well on the other side of the Atlantic, where investors, politicians and the general public are outraged by the growing public animosity towards the oil company and -- by extension -- Britain. Some of the concern is purely economic. The U.K. is saddled with a crippling public debt on the order of £156 billion annually (roughly $229 billion). At a time when Britain is desperate to reduce its deficit, BP is a huge contributor to revenues, paying nearly $1.4 billion in taxes on its profits last year.
Of particular concern are the pension funds of millions of Britons, where BP's position at the top of the London Stock Exchange has made it a bedrock investment for almost every pension fund in the country. The firm's dividend payments, which amount to more than £7 billion ($10.2 billion) a year, account for £1 in every £6 paid out in dividends to British pension plans. Were BP to go belly up, this would directly impact the lives of millions of British workers.
But the real ire toward the United States over BP is political. Part of it is generated by President Obama's seemingly calculated insistence on referring to BP as "British Petroleum" (a moniker the company dropped years ago in favor of the initials BP). John Napier, the chairman of the British insurer RSA, accused the Obama of being anti-British and "prejudicial and personal" in his dealings with BP. The mayor of London, Boris Johnson, went a step further, decrying the "beating up" of a "great British company on the airwaves" as a "matter of national concern." As one columnist in the Daily Telegraph summed up the sentiment over here: "Much of the rhetoric from other American politicians is plainly jingoistic claptrap with a beady eye on their own chances in the U.S. midterm elections."
But the Brit's aren't just angry with the Yanks for beating up on BP and its mother country. They are also angry with their own prime minister -- David Cameron -- for not sufficiently defending the United Kingdom from attacks by its former colony. Cameron's statement that he "completely understood the U.S. government's frustration" with the fallout from the oil spill was widely perceived as "dithering," if not out and out deferential toward the United States. (The two men are scheduled to speak by phone on Sunday.)
The subtext underlying all of this, of course, is just how much the United Kingdom will continue to be America's "poodle" in the future, a reference to Tony Blair's perceived submissive relationship with George W. Bush during Blair's tenure as prime minister. With a relatively new president in America and a brand-new prime minister in the United Kingdom, the two countries are entering into a new phase in their relationship. And one of the big questions on the table is just how much Cameron will be willing to distance himself from Washington.
How the British leader responds to this current crisis may tell us a lot about where Anglo-American relations are headed. At a minimum, the prime minister needs to convey that the Brits object to all this "ass kicking" by President Obama.
And, by the way, that's "arse" to you, sir.
Follow Delia on Twitter.
In his newfound role as "ass kicker in chief," President Barack Obama has set his sights on the multinational oil giant, BP. Earlier this week, the president suggested that BP's chief executive, Tony Hayward, deserved to be fired for his management of the spill that began on April 20 and has continued to spew oil at levels twice as great as initially imagined. On Thursday, Obama summoned the company's board chairman, Carl-Henric Svanberg, to a White House meeting next week to discuss both cleanup and compensation claims.
The U.S government has demanded that BP, in addition to paying all cleanup costs, pay the wages of thousands of American workers laid off since the Deepwater Horizon rig exploded. U.S. Attorney General Eric Holder has refused to rule out seeking an injunction to stop BP from giving shareholders a £10billion dividend (roughly $14.7 billion) next month. BP is also threatened with prosecution if a government investigation determines possible wrongdoing in BP's management of the well.None of this is going down very well on the other side of the Atlantic, where investors, politicians and the general public are outraged by the growing public animosity towards the oil company and -- by extension -- Britain. Some of the concern is purely economic. The U.K. is saddled with a crippling public debt on the order of £156 billion annually (roughly $229 billion). At a time when Britain is desperate to reduce its deficit, BP is a huge contributor to revenues, paying nearly $1.4 billion in taxes on its profits last year.
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Of particular concern are the pension funds of millions of Britons, where BP's position at the top of the London Stock Exchange has made it a bedrock investment for almost every pension fund in the country. The firm's dividend payments, which amount to more than £7 billion ($10.2 billion) a year, account for £1 in every £6 paid out in dividends to British pension plans. Were BP to go belly up, this would directly impact the lives of millions of British workers.
But the real ire toward the United States over BP is political. Part of it is generated by President Obama's seemingly calculated insistence on referring to BP as "British Petroleum" (a moniker the company dropped years ago in favor of the initials BP). John Napier, the chairman of the British insurer RSA, accused the Obama of being anti-British and "prejudicial and personal" in his dealings with BP. The mayor of London, Boris Johnson, went a step further, decrying the "beating up" of a "great British company on the airwaves" as a "matter of national concern." As one columnist in the Daily Telegraph summed up the sentiment over here: "Much of the rhetoric from other American politicians is plainly jingoistic claptrap with a beady eye on their own chances in the U.S. midterm elections."
But the Brit's aren't just angry with the Yanks for beating up on BP and its mother country. They are also angry with their own prime minister -- David Cameron -- for not sufficiently defending the United Kingdom from attacks by its former colony. Cameron's statement that he "completely understood the U.S. government's frustration" with the fallout from the oil spill was widely perceived as "dithering," if not out and out deferential toward the United States. (The two men are scheduled to speak by phone on Sunday.)
The subtext underlying all of this, of course, is just how much the United Kingdom will continue to be America's "poodle" in the future, a reference to Tony Blair's perceived submissive relationship with George W. Bush during Blair's tenure as prime minister. With a relatively new president in America and a brand-new prime minister in the United Kingdom, the two countries are entering into a new phase in their relationship. And one of the big questions on the table is just how much Cameron will be willing to distance himself from Washington.
How the British leader responds to this current crisis may tell us a lot about where Anglo-American relations are headed. At a minimum, the prime minister needs to convey that the Brits object to all this "ass kicking" by President Obama.
And, by the way, that's "arse" to you, sir.
Follow Delia on Twitter.