A Case Study of Poor Crisis Management

Toyota has become a case study in how not to do things in a crisis of brand and reputation. Toyota, the world’s biggest car maker, has turned consistently to teams of political lobbyists and attorneys to “fix” the company’s problems as the company has been ravaged by one safety recall after another rather than build trust with customers through open and transparent communications.

Current predictions are that the company may lose at least $2 billion in sales because of the recalls, and is also facing dozens of lawsuits.

Whatever the reasons for the apparently sharp decline in product quality, the damage caused by Toyota’s style of turning to lobbyists and lawyers is all self-inflicted. It is  the company’s insular way of handling things. Even today, the company has yet to launch an open and genuine dialogue with American car buyers and its customers.

The company is blanketing TV and online coast-to-coast with advertisements but is not engaging with or listening to customers. When there is no open communication in a crisis, underlying mistrust festers.

Rather than focusing on openly connecting with the car buying public to rebuild trust, Toyota is perceived as arrogantly going about business as usual to sweep problems under the rug.

According to the Associated Press, Irv Miller, group vice president for environment and public affairs for the automaker, wrote earlier this year: “We are not protecting our customers by keeping this quiet. The time to hide on this one is over.”

In an internal e-mail, Miller wrote:

“We better just hope that they can get NHTSA (National Highway Traffic Safety Administration) to work with us in coming (up) with a workable solution that does not put us out of business.”

The e-mail was addressed to Katsuhiko Koganei, executive coordinator for corporate communications for Toyota Motor Sales U.S.A. Inc.

“I hate to break this to you but WE HAVE A tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models,” Miller’s e-mail began with several words in capital letters. Miller has since retired from Toyota … and there seems no end to the continuous series of recalls for safety issues at Toyota.

Related posts:

1. iPhone Update + Two Weeks: Poor Crisis Communications
2. How to Salvage Toyota’s Brand Reputation
3. Consumers are Not Crash Test Dummies
4. Toyota’s PR: Like a Bent Fender
5. Consumer Reports Takes on Corporate Bully

Category: Crisis Communications, Featured, Reputation management