Big Mac’s golden arches are starting to crumble

MCDONALDS could be losing its title as burger king.

Shares have slumped to a seven-year low, in their biggest single-day slide since Black Monday in 1987, and a series of public relations disasters and anti-globalisation protests have wiped the smile off Ronald McDonald's face.

Ordinarily, McDonalds could shrug off such problems. It is, after all, a multinational with 30,000 restaurants in over 120 different countries. But the shares plummet is another indication of a company in crisis.

At the height of its powers, McDonalds was seen as a triumphant symbol of global capitalism. At the end of the cold war, the golden arches appeared in Moscow and former Soviet president Mikhail Gorbachev fronted McDonalds adverts. In 1996, the company overtook Coca-Cola to become the most recognised brand in the world.

But now Ronald McDonald has been made redundant. Once referred to by McDonalds as "the smile known around the world", the television days of the cheery clown are over. In the heyday of the 1970s and 80s, he captured millions of consumers for McDonalds with family-friendly ads. But modern consumers viewed him as out of touch and even slightly sinister.

Now that Ronald is gone, McDonalds is still running family-orientated ads but the message isn't getting through. "Every time is a good time," is the slogan but the problem is consumers are worried about fast food as part of their daily diet.

Caesar Barber is one of seven people suing McDonalds in the US. He ate there five times a week since the 1950s and now weighs almost 20 stone.

"Those people in the advertisements don't really tell you what's in the food" he said. "It's all fat, fat and more fat. Now I'm obese." Mr Barber has been ridiculed in the US but the worldwide coverage of the story hasn't helped burger sales.

It is just one of a litany of problems that has left the McDonalds image looking like a crumpled Big Mac carton. The company has agreed to pay $10 million to American Hindus after trouble with its veggie fries. In 1990 McDonalds proclaimed that it would fry its french fries in vegetable oil to suit the tastes of vegetarians. When the news emerged that the 'veggie fries' were actually being fried in beef fat at manufacturing plants, there were riots in India and lawsuits in America.

There have been other off-the-wall lawsuits. In 'Coffeegate', customers successfully sued the company for burning their mouths on "too hot" beverages. But the most damaging of all was initiated by McDonalds itself.

In 1994, the company sued environmentalists Dave Morris and Helen Steel for libel for distributing fliers entitled "What's wrong with McDonalds?' outside its restaurants. The 'McLibel' case dragged on for two and a half years and became the longest trial in British legal history. McDonalds won the battle Morris and Steel were ordered to pay £60,000 in compensation but lost the war. The trial brought out a wealth of evidence about McDonald's food, its treatment of workers and its effect on the environment. Mr Morris, a postman and Ms Steel, a gardener, were not even able to pay compensation. McDonalds had spent £10 million in court to vindicate itself but ended up funding a public relations disaster.

After the trial, McDonalds, rather than being the golden boy of capitalism, was held up as a symbol of all that was wrong with it. The first target for the anti-globalisation activists in London two years ago was a McDonalds restaurant. A French farmer Jose Bove became a hero for ransacking a McDonald's restaurant in Millau in southern France with a tractor, chainsaws and axes. There have marches against McDonalds on the streets but even more damagingly to the company, crusades from the academic world as well. Last year, Eric Schlosser wrote Fast Food Nation, an indictment of McDonalds and other companies, and it became an instant bestseller.

McDonalds, according to Schlosser, is a company that automates the food process for speed and efficiency. The result is a quick Big Mac for the customer but an alienated workforce.

"The organisation cannot trust the individual," said Ray Kroc, the founding father of McDonalds. "The individual must trust the organisation.

All McDonald's franchises receive an instruction book known as the 'Bible', 750 pages long, weighing four pounds. But this distrustful attitude towards ordinary workers is another concept that is out of touch with today's workforce.

So too is the whole concept of fast food. People are no longer content to munch a Big Mac when other outlets are offering alternative food at a reasonable price. So now even the McDonalds management is talking of "adding value" to its products.

The chief executive of McDonalds, Jack Greenberg, believes he can save the company.

"We have recently announced an acceleration of our plans to give customers even better value, service, menu choice and experience," he said. Under Greenberg, McDonalds is changing rapidly but there is more than a hint of desperation about the moves The company has set up a range of McCafe's, a coffee shop beside the main restaurant, aimed at taking customers away from the coffee chains. In the US, McDonalds is now designing part of its restaurants in the style of a traditional American diner.

But amid these moves, acquisitions and marketing strategies, the nagging feeling remains. McDonalds may be a $30 billion corporation but the forces arrayed against it include the health lobbies, anti-globalisation protestors, environmental activists and style gurus.

Ronald McDonald is out in the cold and the company he personified will struggle not to follow him.

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