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The 5 Dumbest Things on Wall Street: Oct. 1


(5 Dumbest article updated with information on the SEC's preliminary report on the May 6 flash crash.)
5. BP CEO and Safety? It's Déjà Vu All Over Again

A new BP (BP) CEO has arrived and he has an important message -- his middle name is safety.

Errr, wait a second. That can't be right. BP CEO Tony Hayward is out as of today, and that whole safety thing was his talking point, wasn't it? But new BP CEO Robert Dudley is making big waves about safety too. This is downright confusing. Is Dudley reading off Hayward's index cards, or are the index cards just interchangeable? Maybe it's just some oil-sector version of Freaky Friday, with the safety talk swapping bodies regardless of which CEO, incoming or outgoing, is mouthing them.

Unfortunately, history has proven that when it comes to BP and safety, the words-versus-deeds dichotomy has never been more pronounced.

Indeed, new BP CEO Bob Dudley is emboldening an internal affairs division of BP, and giving it "sweeping powers" over safety in every aspect of BP's operations. And who's the head of the new BP safety SWAT team? None other than Mark Bly, author of the 200-page BP oil spill report, which in the words of Congressman Ed Markey (D. Mass) drew the conclusion that BP deserved one-half of the blame for just one out of eight factors that caused the oil spill.

BP stressed in its management restructuring that there would be a thorough audit process for third-party contractors -- which sounds like tough talk from a company finally taking operational safety seriously, doesn't it? Of course it does, until you realize that the statement amounts to little more than the ongoing spin that BP is pursuing in the oil-spill legal game, spreading the blame to other companies, most notably Halliburton (HAL). Halliburton's "bad cement job" was Bly and Hayward's summation of the oil spill incident.

At a larger level, Dudley's restructuring of the exploration and production division of BP, its bread and butter, into three divisions with three direct reports to Dudley instead of one, looks good on paper, like all management theory doodling. Which means it's just as likely to devolve into Office Space-esque corporate absurdity, and be scrapped by BP before long. It's like the baklava of management theory: when things start to crack, just add more layers and at least it covers up the mess beneath.

TheStreet Says: Maybe the "sweeping powers" of the new BP safety SWAT team aren't so hard to understand: Bly and his squad will be vigorously sweeping under the rug any BP safety lapses.

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