Road to Recall
Posted by Tom Gable
The Toyota crisis PR case is not just about the recent recalls, global media scrutiny and potential Congressional action in the U.S. It has metastasized from neglected issues within the body corporate to impact vital functions in every fiber of the Toyota being.
Possible deeper issues were discovered by Ken Bensinger of the LA Times and others in major media. He started following the case after an off-duty CHP patrolman and three family members died when the accelerator stuck on their Toyota and they crashed in rural San Diego County in August 2009. Toyota’s president, Akio Toyoda, apologized. Soon, Toyota recalled 4.3-million-vehicles, its largest recall ever.
As outlined in an interview with the NPR affiliate KPBS in San Diego, Bensinger and his LA Times colleagues started probing. They found issues going back to 2001, 2007 and 2009. Toyota talked about floor mats as one cause, then the next day said there were issues with a sticking accelerator pedal. Analysts thought the answers didn’t add up and began asking about design flaws in the electronic throttle system. Were there deeper problems that Toyota wasn’t addressing?
Bensinger said Toyota talked about quality and safety but seemed to be ignoring problems. He said they practiced global “obfuscation” and he then walked the KPBS listeners through a litany of Toyota transgressions over the past decade.
The problem from a PR standpoint wasn’t just obfuscation and a pattern of not dealing with the issues in a forthright manner. As I noted in the same interview, the issues go into the heart and soul of the corporation. What does Toyota stand for? What are its values? Those are the first questions corporations need to ask themselves if they are going to position themselves above the competition. Then, can they deliver on the promise?
If Toyota stresses quality and safety, can it relaunch and walk the talk over time? Can it invest in image as a part of corporate strategy, not in stonewalling, silence and slow responses?
The Wall Street Journal in an essay on Feb. 6 identified deep cultural factors to be overcome:
In Japan there is a proverb, “If it stinks, put a lid on it.” Alas, this seems to have been Toyota’s approach to its burgeoning safety crisis, initially denying, minimizing and mitigating the problems involving brakes that don’t brake and accelerators that have a mind of their own. President Akio Toyoda, grandson of the founder, was MIA for two weeks and the company has appeared less than forthcoming about critical safety issues, risking the trust of its customers world-wide.
This has been a public-relations nightmare for Toyota, as its brand name has been synonymous with quality and reliability. Crisis management does not get any more woeful than this and the cost of this bungling so far—the initial $2 billion recall and the loss of 17% of share value since Jan. 21, when the gas-pedal recall was announced—is only a down payment on the final tally. The recall will surely expand, including cars produced in Japan. Lawsuits are being filed and an expensive settlement looms. And then there are the idle factories and empty showrooms to account for.
It is not surprising that Toyota’s response has been dilatory and inept, because crisis management in Japan is grossly undeveloped. Over the past two decades, I cannot think of one instance where a Japanese company has done a good job managing a crisis. The pattern is all too familiar, typically involving slow initial response, minimizing the problem, foot dragging on the product recall, poor communication with the public about the problem and too little compassion and concern for consumers adversely affected by the product.
The New York Times also documented a pattern of slow response on safety issues and detailed engineering issues going back to 1996 and covering almost every model.
Can Toyota change its DNA? At a press conference in Nagoya on Feb. 5, Toyota President Akio Toyoda expressed his deep regret for the inconvenience and concern caused to Toyota customers. He said he would take the lead toward improving quality around the world by establishing a global quality task force and implement a six-point action plan to improve quality in every region.
Turning the Exxon Valdez wasn’t easy. Check back in two years, which is probably the minimum time it will take to make a course correction, set new plans in place, start building a new culture and generating consistent, positive results over time versus navigating through the rubble from a permanently damaged reputation.
