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Posted by: Michelle Conlin on May 28, 2008
Nestle wanted to build the biggest water bottling plant in the world in McCloud, a drop-dead paradise nestled at the base of Mt. Shasta. The spectre of 600 trucks barreling in and out of town everyday—not to mention a plant the size of five Wal-Mart supercenters strung together—deeply troubled many in the town. There were others who supported the plant who were as equally troubled by the lack of good jobs in McCloud. (Nestle promised to brings jobs into the community in exchange for access to McCloud’s pristine, glacial-fed spring water).
Now comes word that Nestle has decided to radically scale back the scope of the project by 60 percent.
The company says that it is doing so for business reasons. Since Nestle began to explore the project in McCloud five years ago, a company spokesperson says, our “business needs have changed. Over that time, the company has built another plant in Denver and expanded supplies and capacity at other western sites. In addition, the cost of transportation and fuel has risen over the same period of time. These factors combined mean it no longer makes economic sense for the company to built a facility the size they originally proposed in McCloud.”
But viewed another way, this is also cautionary tale for any company. Time was when multinationals could arrive in economically depressed communities and pretty much have their way. But in the age of hyper connectedness, residents in McClould were able to turn their issue into an international sensation. Now Nestle has capitulated. The managmenet lesson: no company can afford to go forward with projects like these without engaging ALL stakeholders, not just supporters. Yes, this is David versus Goliath. But the Davids now have megaphones.
How can you manage smarter? BusinessWeek writers Nanette Byrnes, Patricia O’Connell, Emily Thornton, Matthew Boyle, Michelle Conlin and Diane Brady synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.