Toyota Recall: A PR Crisis?

Gini - Hesitant as I am to disagree with you, I actually do disagree in this case. Three points:

1) You learn a lot about someone during a crisis (think "George Bush, Katrina). This is not at all like the J&J Tylenol case, nor is Toyota's response equivalent to J&J's. In that instance, an unkown third party tampered with the product. It was not self-inflicted damage. Despite the fact that it quickly became clear that it wasn't J&J's fault, they IMMEDIATELY pulled 100% of product of the shelves (and destroyed it if I'm not mistaken). The ethos at J&J was "We're in the health business. We will not have a dangerous product in the market for any reason, regardless of who's at fault or how much it costs to pull it." A B-School prof of mine interviewed the CEO of J&J about it, on the theme of "how were you so well prepared?" The CEO's answer was that they weren't prepared per se, but that the value system was such that there was never a moment's question, anywhere in the company, about what was the right thing to do. So the response wasn't a PR response but an authentic response (which undoubtedly made the PR team's job easier).

2) I have seen varying accounts, leaving me not at all convinced that Toyota only now is discovering these problems. Indeed, some accounts indicate that Toyota didn't act until NHTSA forced them to. The essence of Toyota's brand promise is safe, reliable, affordable transportation. In recent years, some other things - luxury, eco-friendly - have been layered on top, but the underlying brand promise remains. It has taken an enormous hit. Not fatal, but big. Given the nature of the problems, the mea culpa should have been immediate and overwhelming. Statements like, "The reason we haven't communicated with Prius owners about the brake problem is that we have figured out how to contact them yet" strain credulity. How about, "We have received reports of brakes failing to perform for less than one second after the car goes over a significant bump. There are no reports of injuries, and the interruption in brake performance appears to be so brief that it does not render the car unsafe to drive. We are investigating the problem and will contact owners as soon as we have found the cause. In the meantime, if you are concerned about your Prius, please call 1 800 No Brake or contact your dealer." (No, I'm not serious about the phone number.)

3) Here's where the PR comes in. Worst of all is the mea culpa ad Toyota is running now. In it, they make "our company" the villain, while "we" remain the good guys. It happens twice, at the beginning of the ad ("In recent days, Our Company had not lived up to the standards. . .") and the end ("so that we can restore your trust in Our Company"). It sticks out like a sore thumb. The word you expect to hear is "we." As in, "In recent days, WE haven't lived up to the standards. . .", which would be both a lot more compelling and, well, TRUE. "The Company" didn't screw up, people screwed up. This is an especially surprising dodge from a Japanese company, especially one that historically has been as values-driven as Toyota. In traditional Japanese management culture, the CEO would fall on his sword over much smaller embarrassments than this. Instead, Mr. Toyoda is planning a goodwill tour of America. Underwhelming IMHO.

Those are my thoughts and I'm sticking to 'em :-).

3)

I think Toyota has done a good job PR wise with the information the company supplied to their PR firm. I believe Toyota didn't get to the heart of the matter - the crux of the brake problem - as quickly as they should have. At first they blamed the floor mats (an easy fix). Then they blamed an American company, CTS Corporation of Elkhart Indiana who made some of the brake pedals - and shipped a shim to slip in the brake so it won't stick in some of its models. And, it turns out a software problem with the electronic throttle control system was the culprit in the Prius and Hybrid cars. Now, Toyota's president is expected to come to the US in the next couple of weeks to apologize for their shortcomings. I'm not sure the company's president should be seen leaving the helm during a crisis. But, that's just my opinion - and my mother drives an unrecalled (so far) Lexus.

I think they did a good job in the beginning of what I saw of the crisis. However, I became concerned when the stories surfaced about how long they have known about problems and the additional makes/models that are involved. It caused me to wonder about even their initial response which no longer seems customer focused. They seem to have responded quickly once "we" found out about the problem but I think there's some serious long-term damage to the band position overall because of the time it took for them to acknowledge the problem in the first place. They still seem to be ignoring that black eye and I think it will sting for some time.

Hi Gini:

I think in the beginning they did OK responding. The US president made his media rounds, they were open and honest and they acted quickly with each issue. However, when the Lexus Hybrid and then Prius recalls began rolling out, I started to change my mind of the handling of this by Toyota, and it was because of the response time by the head of Toyota Motor Corp., Pres. Akio Toyoda. I didn't hear him come out and respond until after 4,5,6 (I lost count) recalls. And when he did finally make a statement, he didn't really say anything. The last straw with me was on the US side. After all of the good steps they took it was this last one that turned me sour. When the Lexus/Prius recalls came out, the US president suddenly had "no comment." As a PR person, this is a knife through my heart. So, they started out OK, and then fell flat. They probably depended on brand reputation to carry them through. Unfortunately, when people's safety is concerned, and there have been fatalities, that should not be an option.

Adam - GREAT points (I think they're up to 454 million cars recalled, as of this morning), but this isn't a PR issue, it's an operations and quality service issue. Those two things PR can't affect. What it can affect is public perception of how the crisis is being handled...which I think is being handled correctly.

Jack - Point well taken - this is a company issue, not a PR issue.

Kris - I agree with you...it's in how the company handles it. I don't know how many times the Toyota CEO has apologized, but he did again this morning.

Anne and Abbie - What an adrenaline rush to be in those board room meetings, but you're right...super stressful without all of the information.

Troy - How do you think Tylenol got past their crisis in the 80s? This is the same thing - it's a safety issue and, even more so for Tylenol because people put their product in their bodies. It is absolutely possible to get past this and show people that the safety issue is no more, and to earn trust back, but the way Toyota communicates in the next few months will be critical in saving themselves.

Toyota's done well so far, but they need to go further, for a very simple reason:

People spend ludicrous amounts of time purchasing a car - second only to buying a house. They weigh the pro's & cons for ages, test drive several models, wait until the opportune moment to buy, etc. It takes forever, and it's a very engaging process.

Cars ultimately define who we are - a Prius driver is a very different person than an H2 driver.

So when people buy their next car, they'll always remember this & weigh it heavily in their decision.
"Can I afford to risk being unsafe?" is a question buyers will ask every time.
For DECADES.
'Unsafety' is much stronger & more raw than 'responded appropriately,' especially for such a high-effort purchase.

This a permanent scar on the brand, and the recall - at best - can minimize the market-share casualties.

Normally I'd suggest "Fix this, then change your name," but there's still enough brand equity at Toyota overall, so that seems silly.

If I was Toyota, I'd explore the creation of sub-brands - done right, they could keep Toyota's positive attributes while distancing the new brand from the 'unsafe' association.

I have had a lot of conversations recently with communications folks and businesspeople about how Toyota is responding to this crisis. Like you, I am a veteran of a number of high-profile crises.

I've made the comment to many that I can just imagine what it must be like for the PR team working on this. It is hard to know what to do when the situation (what is the exact problem? what is causing it? what is the proper remedy) -- at least until recently -- has been so fluid and evolving. Nothing is harder than determining what to say or do when you don't have all the facts. And it doesn't help your cause, as a firm that has built its reputation on engineering excellence and customer satisfaction, to publicly admit: "We don't yet have our arms around this problem."

So, in general, I would give Toyota a "B" for its efforts to date. I do think they might have been a bit more communicative instead of being so quiet for so many days (something they did get criticize for) -- but I will be the first to acknowledge that there's a fine, fine line to be walked when you want to be in touch with your customers but don't yet have all the facts.

Sometimes things happen– things that aren't so very good. I think how one responds to crisis, hardship, damage, etc... is a true test and reflection of character. I own a Toyota now and would not hesitate to buy another.

Do you still go to "that" restaurant? Even after the one time the food came out cold? Or the one time they charged you twice for a glass of wine? Or the one time you got wretched sick after eating undercooked fish that you noticed when you cut into but didn't send back?

This is a complex situation that, IMHO, has been exacerbated by some laissez-faire philosophies on the part of Toyota.

Sure, they've done some social stuff right but, to Jack's point above, company crisis with PR opportunities...

In my driveway, I have a Hyundai and a Ford. One company has successfully positioned itself as a tremendous value and the other as a social, innovative company. Toyota could be both, but needs to fix the biz issues first.

I don't see this as a "PR Crisis", but a company crisis for which there is a tremendous opportunity for PR to help or save a brand.

I completely agree with Adam - Toyota has rested on a good reputation for far too long. Their products have been overrated in recents years (nice work marketing folks!). Now it will be the PR team's job to educate consumers on why we should trust them again. A huge task, but surely one they can accomplish.

Like you, I've had the opportunity to be involved with crisis situations. It is never easy-as much as you have planned for it, discussed different scenarios, when something actually happens it is gut-instinct that takes over. It is difficult, no doubt, but keep in mind, if you have engaged outside public relations help, listen to them. They have an outsider's view of what is happening, they are less emotionally connected to the situation and can provide objective opinions. Ultimately it will be up to the company to decide -- but in my case, my clients have listened and we have been able to successfully navigate through some very difficult situations.

I think Toyota is doing the right thing -- moving as fast as they can to get to some resolutions. With information being shared at the click of a button, businesses' reaction time is counted in milliseconds.

I think Toyota sat back and let their brand work itself. They recalled floor mats first. Of course it couldn't be something larger, we are Toyota.

I think because they had such a good history with quality, it turned into better sales. With better sales is increased velocity. with increased velocity you have to get more parts faster. with speed comes waste.

in the end, i think Toyota took their eyes off the quality in their products.

Almost every vehicle from 2000-present is involved with this recall. This is HUGE and I think a parts buyer is going to pay with their job.

I think they're doing a great job. Proof: I bought a Toyota Matrix last week. It's used, so it isn't affected by these recent problems. Toyota is known for quality, and that isn't going to change.