Voluntary Recalls are Giving Toyota a Bad Name

The frequency of Toyota’s vehicle recalls and the way they are handled are making their reputation spiral downward.

Toyota has had plenty of experience in dealing with crisis situations after having to recall over a million vehicles for fuel leaks in January 2011, but critics say that they have not handled the situation very well.

It can be truly damaging to a reputation whenever a company produces a defective product and has to not only admit that it was not of good quality but also ask for those products back to be fixed. Toyota has had to deal with this situation several times. They have added a section of their website dedicated to informing people of the current recalls and safety issues going on. This was a good idea so that Toyota owners can make sure their vehicle is not the one being recalled, but the fact that Toyota has had so many recalls that they needed to make this addition is why so many people have been criticizing the company lately.

Koji Endo, the auto analyst with Advanced Research Japan Co. in Tokyo, commented, “But there is that perception of here we go again, and that hurts Toyota’s image, especially in North America.”

Endo followed by saying that Toyota is most likely just trying to get ahead of the issues and recall them before they can become a bigger crisis. This recall, like many others, has been voluntary recalls, but just the word recall does not sit well with consumers and can alter their opinion of the company.

Gene Grabowski, chair of Levick Strategic Communications, said in an interview about the Toyota crisis that he considers this to be “the worst-handled auto recall in history.”

Grabowski said that Toyota dragged out all the facts rather than just giving the public all the information at once, “which is one of the key things you always talk about avoiding in crisis management.”

The slow release of all the information can make the consumers feel as if the company is not being completely honest with them. When dealing with a crisis like this, it is best to just give the public all the information they need at once and in a timely manner, then stay tuned to the consumers and help with any questions or concerns.

Tiger Woods: The Reputation Crisis

Tiger Woods faced a ruined reputation when it became known to the public that he was having several affairs, but he is making a comeback.

Tiger Woods and the companies which represented him went into crisis management mode to try to figure out how to fix his severely damaged reputation when the infamous sex scandal involving golf’s most popular athlete hit the news in December 2009.

According to Bill Patterson, “‘Reputation management’ is the newest buzz phrase in the public relations field and for those of us long involved in crisis management, this new phrase seems likely to stick.” Crisis management is not only about handling the “uh-ohs” of big companies but also about dealing with the “oops” of big names that everyone knows.

Tiger Woods is an interesting case in that it was not just his personal reputation as an athlete that was damaged. Woods represented many big companies through sponsorship, including Nike. Woods was the face of Nike. Many worried that Woods would take Nike’s reputation with him when Woods’ reputation began spiraling down. Nike and Woods both began working towards their own comebacks and ways to recover from the incident.

Nike, as one of Woods’ biggest sponsors, took their own steps to respond to the situation. They released a video in which Woods’ deceased father is talking to him about making mistakes. Nike used this video as a way to say that everyone makes mistakes, including Tiger Woods. Nike was concerned that their reputation could be damaged through Woods’ action since he is such a big icon in their company. Although the scandal may have slightly impacted their overall sales, many fans and consumers still stayed loyal to Nike.

Woods made a public apology in Feb. 2010, but, according to CNN’s report on the event, it was small and private with only a select few people allowed to represent the media. Many people criticized the way the apology was set up because the few reporters allowed in were not allowed to ask questions and other reporters had watch the apology half of a mile away on television.

Woods took a bold step at this event to help improve his damaged reputation by going public about the situation. He took the time to admit to the public and most importantly his fans that he had made a mistake and was working to fix it. He returned to playing golf, most likely hoping that people would again begin to associate him with the game instead of the scandal. Apple has also released a new app in its iTunes store called “Tiger Woods: My Swing” to help golf enthusiasts better their playing skills. Woods is slowly moving back into a positive light in the public’s mind because he has been working to improve the public’s opinion of him.

Even a Fake Crisis can Hurt Like a Real One

False claims made against Wendy’s could have ruined their reputation, but they successfully fought to protect it.

In 2005, Wendy’s was faced with an all too common crisis in the restaurant industry when a woman made a fake claim that cost millions of dollars in sales and could have damaged their reputation severely.

Anna Ayala reported finding a piece of a finger in her bowl of chili from a Wendy’s restaurant in California and the company faced the threat of an extremely large lawsuit. Although the claim ended up being just a hoax in attempt to receive money, Wendy’s CEO Jack Schuessler reported that whole scheme still ended up having a significant impact on their sales, reputation, and employees.

In an interview with Ron Insana for the USA TODAY, Schuessler commented on their loss: “We’re figuring 2.5% of sales, or about $15 million from March 23 through the end of April. But besides that, it’s the pride you have in your company. These were independent franchisees that got caught in the middle. The employees had fewer hours because of fewer sales.”

Schuessler also reported that paying Ayala to keep quiet about the supposed incident was never an option.  The company focused more on upholding the reputation that they had already earned rather than giving in to what Ayala wanted. Although the claim could have been seriously damaging, Wendy’s as a corporation was open and honest with the public about the incident.

The corporation conducted a thorough investigation to ensure that the claim was a fake. Schuessler said that employees at the franchise where the finger was claimed to be found were tested via polygraph and the whole restaurant was thoroughly inspected. According to Schuessler, he knew it was obviously a fake claim when the polygraph results came back and it was clear that no one was missing any parts of their fingers.

Coming back from any crisis is always a challenge, especially when it immediately affects a company’s business. In response to this instance, several Wendy’s locations in the San Francisco Bay area spent a weekend in April after the incident giving away free frosties as a way to try to encourage customers to return to the restaurants. Because Wendy’s was openly honest about the situation with the public and the media, there was little damage done to the famous restaurant chain’s reputation.

Schuessler also took the whole thing to be a learning experience, which is the best thing that could be done in any crisis situation. “And the lesson is you’ve got to be on your guard, but even with that, this thing is so fragile that one has to be able to respond. One has to have a set of core values in order to respond, because there’s no playbook that’s been written for events like these,” said Schuessler.

9th Florida Police Officer Killed on Duty in 2011

As another officer was killed, the St. Petersburg Police Department’s ability to handle a crisis was again tested.

When St. Petersburg police officer David Crawford was shot and killed in the line of duty Monday, Feb. 21, officials immediately released press information to the public asking for help catching the shooter, offering deep sympathy for Crawford’s family, explaining what happened that led up to the shooting, and giving a description of the shooter and his believed hiding spot.

This shooting makes Crawford the ninth police officer in Florida to fall in the line of duty this year. The St. Petersburg Police Department is still recovering from the loss of two other officers, Sgt.  Thomas Baitinger and K-9 officer Jeffrey Yaslowitz, who were both killed on duty less than a month ago. After this tragedy, a donation fund was set up in memory of the two officers so that anyone could donate money to help the families of the fallen officers. A memorial was also set up in the entrance’s breezeway at the St. Petersburg Police Department so that people from the community could express their condolences. These simple gestures can mean a lot to not only the families but also the community, which helps begin the healing process.

The St. Petersburg Police Department unfortunately has been through the drill before and is familiar with how to handle situations like this. They have offered support to the families of the fallen officers and worked to keep their memories alive. Other than that, there is not much else that can be done.

In the most recent situation with Crawford, the St. Petersburg Police Department has handled everything correctly despite the shock and grief that took over the entire community.  To be able to step up and handle not any crisis situation amidst the overwhelming grief for a fallen brother takes tremendous strength and a well-coordinated public relations team.

BP: An Example Worth Studying

Anyone in the public relations field can use BP as an example in how to respond to a major crisis.

Everyone in the field of public relation is still criticizing British Petroleum (BP)for the actions it took or did not take in response to the oil spill in the Gulf of Mexico in April 2010 and for the way they tried to push the blame onto everyone else.

Everyone highly critiques the way the company responded to the situation because there was such a delay in releasing official report on the incident.  BP did not release their formal internal report about the ongoing issue until September. According to Justin Goldsborough, immediate response to a crisis is essential for any company. This time gap caused many people to become even more critical of BP.

More problems arose with the release of this statement.  It became evident that the BP executives were trying to push off some if not most of the blame onto two other companies: Halliburton and Transocean. The attempt to use those companies as a scapegoat infuriated critics and made BP’s reputation sink further. Not only is it important to respond in a timely manner, the way you respond to even the smallest incident is equally important.

Two obvious rules of thumb shine through when you look at the way BP responded to the oil spill situation.

  • Always make a statement as soon as possible so that people do not wonder how your company will respond.
  • Never try to shift the blame to someone else. Wait until the other party publicly announces their responsibility before you do it for them, even if another party is partially responsible.

President Obama and Governor Crist observing the beaches during clean up in Pensacola, Fl.

On the positive side, BP did take some steps that actually helped their reputation. They may have been delayed, but they still helped. BP dedicated a whole section of its website to detail its restoration activities. The headline of the first page states, “BP remains committed to remedying the harm that the spill caused to the Gulf of Mexico, the Gulf Coast environment, and to the livelihoods of the people across the region.”

Now that they stepped up and took responsibility, they are taking several steps of action to fix what happened.

  • BP is constantly releasing new commercials explaining to the average person what they were doing to help clean up the mess.
  • They are working to compensate individuals for their losses by having already paid over $2 billion to those affected by the spill.
  • BP is now working to remove the oil from the ocean and affected coasts.
  • BP is also working to help the affected wildlife.

The commercials, compensation and clean up efforts have pushed BP back into a more positive light in the public eye, which is the main goal for any public relations department. BP is now a prime example for public relations as a whole for not only what they did wrong but also what they did right.

Mission: Space

Disney World dealt with the same crisis twice: the death of a guest after riding Mission Space.

Everyone loves Walt Disney World. It’s full of fun and adventure. Unfortunately for two vacationing families, this was not the case. The ride called Mission: Space in the theme park EPCOT, according to Disney, realistically mimics a flight to Mars by spinning the riders in a car. They are spun so fast that the centrifugal force on them, twice the normal force of gravity, makes it feel like they are flying through space as depicted on the screen in front of them.

The centrifugal force on the ride is so intense that Disney has had to place motion sickness bags on the ride for each passenger because so many get sick.  This force is also what caused a 4-year-old boy to die in June 2005 of heart failure and 49-year-old woman to die in April 2006 from high blood pressure and bleeding of the brain.

Since these deaths and multiple reports of motion sickness, Disney has created a less intense option of the ride for those who have restrictive medical conditions. Riders can choose to either be on the “Orange Team” or the “Green Team”.  The “Orange Team” gets to experience the original, intense version of the ride while members of the “Green Team” can now experience a less intense version without the strong centrifugal forces.

Disney also posted 13 signs throughout the queue leading up to the ride that repeatedly warn riders about its intensity and others detailing the differences in the two Teams and which would be appropriate for guests with health conditions.

Disney officials, however, deny that the reason behind these modifications had anything to do with the two deaths on the ride. They simply said that the reason they made the new version of the ride was to provide guests with options that would encourage them to make the appropriate choice based on their health conditions.

Disney’s spokespeople also repeatedly said after the two incidents that the ride was inspected and found to be working properly. They said nothing about the intensity of the ride, which was the cause of the two deaths. It is as if they would not admit that the ride may have been too rough. In doing this, Disney took little to no responsibility for the deaths of the two guests.

Disney could have done more in response to these incidents, such as admit that the ride is extremely intense and create more publicity about the less intense version of the ride to make guests feel more secure about riding it. But despite its troublesome past, the ride is still one of the most popular at EPCOT and Disney is still as much as a flourishing company as ever.