Crisis Management

GM Recall Recalls Past PR Crises

~ K. Quesenberry ~ Leave a comment

General Motors announced Tuesday that it was recalling about 1.5 million vehicles worldwide to address a problem with a heated windshield wiper fluid system that could lead to a fire. This seems like the latest in a rash of corporate blunders that calls for some serious crisis management. Other recent PR events include BP and Toyota.

Public Relations can have a big influence on a client’s public image. To illustrated I will bring up two cases where a crisis was handled properly and not properly. In 1989, Exxon faced a crisis when it spilled 11 million gallons of oil into Alaska’s Prince William Sound. Exxon waited a long time before responding. An ad ran in the newspapers 10 days after the spill and Exxon’s chairman did not fly to Alaska until two weeks after the spill. Exxon’s spokesman first answered the press with “no comment” after the spill taking credibility away from the company and the company never took responsibility for what happened. Even 10 years after the spill people were still boycotting Exxon gas.

On the other hand Tylenol handled their crisis with good PR tactics. In 1982, Tylenol, the leading pain-killer medicine in the United States faced a tremendous crisis when seven people in Chicago were reported dead after taking extra-strength Tylenol capsules. Unlike Exxon, Johnson & Johnson immediately recalled its product and made public announcements about the suspension of its usage through various media outlets. Even though it was proven 
that Tylenol was not associated with the tampering it still immediately assumed responsibility. Johnson & Johnson completely recovered its market share lost during the crisis and reestablish the Tylenol brand as one to the must trusted consumer products in American.

Which way will GM choose in this PR crisis?

Toyota Apology-athon

~ K. Quesenberry ~ Leave a comment

All this press over the Toyota recalls made me think of 1982 Tylenol crisis where people were reported dead after taking extra-strength Tylenol capsules. On of Johnson and Johnson’s crisis management techniques was its quick  and total response. J & J made it clear right from the start that they put people over profit through an immediate sincere apology and aggressive recall action.

Toyota has sent the opposite signal. They were slow to apologize and slow to react. At first they the press couldn’t even track down CEO Toyoda. Not thinking the crisis was important enough he remained at a World Economic summit in Switzerland where he only made a brief comment because the press forced him right before he sped off in an Audi.

He made his first official public appearance only after two weeks of the company facing a growing crisis over the safety and quality of its vehicles. At the press conference he apologized for the problems that led to the company’s recall of more than 8 million cars, but did not announce any solution for brake problems of its popular Prius hybrid. At a later date Toyota ended up announcing additional recalls on the Prius.

Then Mr. Toyoda apologized again but said he was not going to testify before congress. He delegated that responsibility down to the heads of the U.S. operations. But then later he apologized again saying he changed his mind and would testify. If decisiveness builds confidence Mr. Toyoda is doing the opposite.

Instead of acting quickly and aggressive to show that they put public safety first Toyota has taken a wait and see approach every step of the way giving the public the impression that they will only do what the public forces them to do to protect every bit of profit it can.

Instead of Toyota affirming their company’s concern for their customer’s safety with immediate apology from the company’s leader and aggressive action they now have that president testifying before Congress defending his company’s reaction to the crisis and trying to convince the public that his repeated apologies are sincere. But I don’t think the public is fooled. Actions speak louder than words (“Toyota Chief Hammered by Lawmakers Despite Apology” 2010).

How much money and time did the company invest to get Five Star Crash Ratings? What is it worth now?