Toyota’s crisis–just how real is it?

February 10, 2010

Tell you the truth, I have a hard time evaluating the Toyota crisis. Certainly it is one of the biggest corporate reputation crisis of all times. One of the truly global brands, one of the most admired companies in the world, the world’s leading auto maker, the undisputed kingpin of manufacturing efficiencies or “lean manufacturing” is now wallowing in the dirt in agony with some PR pundits asking out loud if the brand (like Firestone) needs to be killed.

I really don’t get it. So I went back to see if I could find just how serious the safety issues are. What I found was some pretty bad accidents attributed to accelerator issues. Admittedly, I haven’t dug deep to see the statistics. But what I saw was a lot of very typical fear-motivated reports such as these they carry dramatic lines and dramatic photos but seem remarkably short on facts. Here’s the blotter from ABC News and in my view only helps cement Brian Ross’s reputation for dramatic story telling–perhaps at the expense of the truth.

I very much respect Jim Lukaszewski (luke-a-shevski Ithink) and Jon Harmon and here is their take on the subject. Crisisblogger readers will recognize Jon because I recently hosted a webinar with him talking about his great book on the Ford Firestone crisis called Feeding Frenzy. There is no doubt that this is a corporate reputation crisis of almost unmatched dimensions. But what I can’t really tell why. Possible reasons:

1) The safety problems with Toyotas are every bit as serious as the huge coverage and government focus warrant.

2) Safety problems are real but overblown and Toyota’s lackluster response contributed to the current crisis.

3) Safety problems are way overhyped but its too good a story to miss for the media who was tiring of Haiti, and great news for the Obama administration (Mr. LaHood being on point) because the worse Toyota does, the better GM does and that will make the president’s investment in GM look brilliant.

Number 3 would make me a conspiracy theorist and a cynic ( I lean more toward cynicism than conspiracy theories) so I’m going to with a combination of number 2 and number 3. Maybe some reader will point me to overwhelming factual evidence that the 9 million or so cars that have been recalled have safety problems far beyond any other vehicle on the road. If so, I will readily grant that perhaps Toyota deserves the treatment it is getting and maybe even deserves the corporate reputation death it is being threatened with.

From Toyota’s perspective, none of this really matters. The public believes right or wrong that their vehicles are dangerous. So dangerous that our transportation secretary doesn’t seem certain if they should even drive them to the dealership or junkyard. Perception, as they say in this business, is reality. (That was one of the biggest public misstatements I’ve even seen and why he has not been excoriated for that I don’t understand.)

Some of you might think I’m a Toyota lover–actually I drive a Honda and my wife drives a Mercedes. I don’t work for Toyota and never have. But as a commenter on reputation crises, this one has me befuddled. The outrage seems to go far beyond anything rational. The recalls, apologies, more recalls, production halts, emergency fixes–albeit just a step behind the ideal–are all right out of the crisis management playbook. But still, the doo doo seems deeper and deeper for this company.

My advice to Toyota–keep doing what you are doing. Try to keep thinking ahead. Imagine, as it hard as it may be, the worst case scenarios that may still lie ahead. Try to get ahead of any bad news. Report all the bad stuff yourself. Keep apologizing and keep up the messaging you have in place. Get back to making great cars because you got to be number one for a good reason. Don’t lose heart. This storm will take a long long time to pass–just think of all those hungry trial attorneys now advertising to all your good customers–but it will pass. And how you conduct yourself now will impact your share value and your brand value for many years to come. Hang in there.

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