SMALL COMPANY LEARNS LESSONS IN CRISIS MANAGEMENT SKILLS

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, February 14, 1993                   TAG: 9302120051
SECTION: BUSINESS                    PAGE: F-2   EDITION: METRO 
SOURCE: By PAUL NOWELL ASSOCIATED PRESS
DATELINE: WINSTON-SALEM, N.C.                                LENGTH: Medium
SMALL COMPANY LEARNS LESSONS IN CRISIS MANAGEMENT SKILLS
The news couldn't have come at a worse time for Ann Lewallen Spencer: Just six months after becoming president of Goody's Manufacturing Corp. and days before Christmas the FBI said it was investigating the cyanide-poisoning death of a man who had taken Goody's headache powder.
"To be honest, the first thing I did was go to bed," Spencer recalled in a recent interview. "I knew I was going to need a good night's sleep for what was ahead."
But Goody's has managed to get through the crisis so far by taking the same aggressive, honest approach used by larger companies in similar situations.
First, it took the headache powder off the market, then hired a local public relations firm to respond to media queries as it plotted a strategy for reassuring customers.
The FBI said recently that suicide, rather than criminal tampering, likely was responsible for the Nov. 30 death of William Tucker Williams, 51, of Morristown, Tenn. Two packets of Goody's headache powder had been emptied and the contents replaced by sodium cyanide, it said.
Goody's resumed production of its headache powder - sold mostly in the Southeast - several days ago and recalled 30 employees. The company had to lay off about a fifth of its total work force and put on hold plans to build a new plant until the financial impact of the recall was known.
The privately held company does not disclose its profits or sales.
The case, meanwhile, remains under investigation by a grand jury in Hamblen County, Tenn.
Spencer said she used Johnson & Johnson's Tylenol tampering case in 1982 as a guidepost for her actions. Seven people had died after ingesting Tylenol capsules that had been laced with cyanide and placed on Chicago store shelves.
"Johnson & Johnson kind of led the way for us to know how to proceed," said Spencer, who became Goody's president in June.
Johnson & Johnson, widely praised for its handling in a similar tampering incident, recalled 22 million bottles of Extra-Strength Tylenol and Tylenol capsules, imposed safety seals and abandoned capsules for over-the-counter medications.
Spencer said she knew immediate action would be needed if the company her father founded during the Great Depression was to recover from the blow.
On Dec. 23, Goody's ordered a nationwide recall of all of its headache powders. Employees who otherwise would have had the holiday week off were summoned to the company's brick plant, in Winston-Salem's historic Old Salem village, to help with the details of the recall.
Goody's also hired a public relations agency to respond to customers and the media.
"It was a very tough decision but an easy one, too," Spencer explained. "Goody's powders have been our flagship product for 60 years, so pulling them off the market was a difficult financial decision. But our first priority had to be the safety of the public."
The recall didn't involve Goody's headache tablets or its other over-the-counter medicines, including throat lozenges and infant-care products. Only one of a handful of companies still making headache powders, Goody's customer base has remained loyal through the ordeal.
Gus Dudderar, of Long Island, N.Y., has been using the headache powder for several years, getting his supply from a business associate in Florida.
"When I've got a bad tension headache, Goody's knocks it out in five minutes," he said. "I keep a case of 50 boxes in the fridge."

by Archana Subramaniam by CNB