Official Blog of Bannon Leadership Consulting Founder Shawn Bannon

Toyota’s Mistakes Demonstrate Importance of Crisis Communications Planning

Could it get much worse for the folks at Toyota?  I guess it can always get worse.  I mean, their spouses could all begin cheating on them with the folks from Kia.  Or their teenage daughters could all run off with that guy you know will never really become a rock star.  Frankly, I’m hoping their personal lives are nothing but bliss because their business is in big trouble, and the news is getting worse everyday.  From a public relations perspective, this company is in free fall, and somebody needs to pull the cord on their parachute now.

Taking a page out of the Tiger Woods manual of crisis management, Toyota President Akio Toyoda went silent last month as news outlets reported that his company was recalling millions of its vehicles over defects linked to numerous accidents, injuries and fatalities, and as questions mounted about the company’s delays in issuing those recalls.  By the time he spoke on the record at the World Economic Forum in Davos, Switzerland, the story was long out of his control.  What’s worse, his meek comment on the ordeal did little to assuage angry and frightened consumers.

Saying only that Toyota was very “sorry to have caused our customers unease,” and making a vague promise to investigate the issue and explain it in a way that he believed would restore consumer confidence, Toyoda seemed to not grasp the gravity of the situation. 

Concerned consumers and regulators at the National Highway Traffic Safety Administration (NHTSA) weren’t feeling uneasy; they were downright scared and angered by reports that these defects were so pervasive and that Toyota may have known about the potentially fatal safety issues for years.  They were feeling more than a little unease over disputed reports about the actual cause of sudden acceleration by these vehicles and by the fact that millions of these cars remain on the roads while owners wait for appointments to have them repaired.

In an effort to stop the bleeding while the company’s sales ground to a halt and its stock price plummeted, Toyota’s U.S. president, Jim Lentz, launched a long-overdue PR campaign with an appearance on “The Today Show” this past Monday.  In a PR offensive that turned out to be exceedingly defensive, he offered another apology, some explanation and a promise that a fix was in the works.  But Mr. Lentz seemed unable to clearly answer the question of when the company knew about the defects and related deaths, which host Matt Lauer put at 19.

Mr. Lentz responded as follows:

“The number of deaths – whether it’s one or 2,000 – doesn’t really make a difference.  We have been investigating this for a long time, and we are quite confident that we have these fixes.”

Setting aside the ease with which he dismissed the notion of 2,000 deaths, the suggestion that Toyota has known about and has been “investigating this for a long time” casts a long shadow of doubt over claims that the company has been forthright about these quality issues or that motorist safety is among the company’s top priorities. 

The U.S. Congress is taking up the question of Toyota’s delay in acting to acknowledge and address the defects with at least one hearing scheduled for late February – meaning this story isn’t going away any time soon.

Still, the interview wasn’t a complete disaster.  At the end of the day, Mr. Lentz made strongly worded promises about Toyota’s commitment to repairing the recalled vehicles quickly, pledging that dealers would have the parts that are needed and would work day and night – some running 24-hour shifts – to ensure the safety of the vehicles and restore confidence in the company’s product.

That certainly sounds like the company is on the right track – if it can deliver.  But Toyota’s bad news continues.

First are the lawsuits.  Numerous class action and wrongful death suits have already been filed, and according to an article this week in the National Law Journal, there are many, many more to come.  This could get very ugly.

Then there was news out of Japan on Wednesday concerning complaints of trouble with the braking system in the Toyota Prius, one of the company’s vehicles that had not been included in previously announced recalls.  Now the Japanese government has ordered Toyota to investigate the matter – an investigation the company needs to undertake swiftly if it intends to demonstrate its responsiveness and dedication to safety.

Also on Wednesday, the BBC reported that repairs on more than 180,000 recalled Toyotas in the United Kingdom would not begin until February 10, leaving owners of those vehicles to wonder if each trip to the market between now and then might be the last.  At least, that seems to be the tone of the coverage, whether the risk is quite that severe or not.

And maybe it is that severe, considering that U.S. Transportation Secretary Ray LaHood on Wednesday advised owners of the recalled vehicles to not drive them until repairs have been made – a warning that was later retracted and rephrased as a suggestion that owners should take their cars to dealers for repair as soon as possible.

On the heels of that flap is news that the U.S. Department of Transportation is expanding its examination of the problem from the floor mats and pedal components Toyota has blamed to the car’s electrical system, which is the focus of a number of the lawsuits filed thus far.  During his “Today” interview on Monday, Mr. Lentz categorically dismissed any assertion that the problem might rest within the electrical system, but regulators apparently are not satisfied with his claims.

If Today’s Los Angeles Times article headlined “Denial Is a Familiar Road for Toyota” is accurate, there may be good reason for government and consumer skepticism.

All of this has left owners confused about the safety of their vehicles and dealers ill-prepared to ease the fear and frustration of customers responding to the recall.

It’s going to take a lot more than a better-late-than-never PR blitz to prevent Toyota from crashing horrifically into the ground toward which it’s racing.  My initial reaction when I heard news of the recall was that this would be an expensive repair job – bringing vehicles in as quickly as possible, dealers going out of their way to make sure affected owners are well taken care of, a lot of rental cars and loaners handed out to owners left without vehicles for any length of time, and assurances that the problem had been fixed for good. 

Those actions, along with a quick and sincere apology and thorough explanation of the problem, would enable the company to move on in relatively short order – I thought.  Now, though, as allegations that Toyota’s handling of this issue over a period of months and even years suggest a nefarious plot and calculated disregard for human life – I’m left wondering if a crisis management plan exists that might save this company … or if it’s even a company worth saving.

As a total outsider (I’ve never even test-driven a Toyota) with no certainty about the facts of this complex situation, it would be inappropriate for me to pass judgment on the company or its leaders.  I can’t say whether Messrs. Toyoda and Lentz and their colleagues are good people caught up in an extremely unfortunate situation or if a profits-over-people mentality has simply caught up to them.  What I know for sure is that they have fumbled and bungled this crisis in the media, and a lot of people – employees, investors, vendors in the Toyota supply chain and more – are likely to suffer the pains of these mistakes for a long time to come … especially with Ford and General Motors pouncing to offer trade-in deals to lure Toyota owners into their showrooms.

There would appear to be many chapters left to write in the ongoing Toyota saga, and we’ll have to watch how it all unfolds.  The story illustrates, though, the importance of having a crisis communications plan and executing it effectively to begin a dialogue that enables you to help shape the narrative as a crisis unfolds instead of being crushed by it as it snowballs.  Seeing this all develop as it has, I can’t believe Toyota had a crisis communications plan in place when this began.  And if they did, they’ve absolutely failed in its execution.

So what are the most innovative elements of your crisis communications plan?  How often do you review and update it?  How are you integrating social media?  Leave a comment below or e-mail me to let me know.

Don’t have a crisis communications plan?  Contact me, and let Bannon Communications help you develop a plan that fits the particular needs of your organization to ensure you never find yourself in the inescapable throes of the media maelstrom.

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