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02.01.10

How Toyota Can Save the Brand

On Monday morning, Toyota USA's CEO explained how they'll fix 4.2 million recalled vehicles. Eric Dezenhall on why responding slowly is sometimes the smart solution for car companies.

My adventures in automotive recalls should have anticipated that something weird would happen early on in the Toyota crisis, but I was not expecting an executive from that company to appear on camera in a surgical mask apologizing to consumers, which is exactly what happened last week.

There is a tendency on the part of non-American automakers to view the American public’s emotional consumerism as a fetish, or even a form of illness. This might explain the surgical mask.

Click Below to Watch Jim Lentz on Today Monday

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When Audi had similar problems with its 5000 model in the mid-1980s, the company’s initial crisis management efforts included an impatient German executive on camera declaring sternly that “Dere iss nothink wrong vit da kah!” Not comforting, even though the Audi executive turned out to be right—the brand was vindicated years after being essentially banished from the American marketplace, but there is a lesson nonetheless: Bedside manner matters.

Monday morning, Toyota USA’s CEO, Jim Lentz, appeared on the company’s Web site apologizing to American consumers and explaining the recall. He was good, and if Toyota is smart, they’ll keep talking to American consumers in our language. If this sounds vaguely xenophobic, tough. This is just how we do things in the American marketplace.

Contrite CEOs and dealer incentives (supplemented by balloon animals for the kiddies on the showroom floor) mean very little against the specter of cars and trucks whirring out of control.

The massive Toyota recall just may be the most important business and consumer crisis management story of our time not only because of the scale of the questions being asked, but because of the scale and speed of the apparent answers.

When a crisis like this hits, consumers and journalists tend to attribute corporate foot-dragging to malfeasance.

The troubling truth is that car companies rarely know right away what the problem is and, for that reason, are slow to set a fix in motion.

While allegations of sudden acceleration have been swirling for months, when Toyota felt it had a potential epidemic on its hands, the company announced a recall of 2.3 million vehicles representing multiple models. Very gutsy and very expensive—essentially a multibillion dollar bet on the company’s future. Moreover, within a week of the announcement, the company announced that it knew what was causing accelerators to stick, and that they would fix every vehicle even if dealers and service shops had to stay open 24 hours a day to get it done.

Contrary to the conceit equating crisis management with public relations, when mechanics are perceived to be at the root of the problem they have to be at the root of the solution. Contrite CEOs and dealer incentives (supplemented by balloon animals for the kiddies on the showroom floor) mean very little against the specter of cars and trucks whirring out of control.

Toyota need not make its challenge more complicated than it is. If, in fact, Toyota’s proposed fix works—and works quickly—it will go a long way in restoring consumer trust in the brand.

Losing the surgical mask will help, too.

Eric Dezenhall co-founded the communications firm Dezenhall Resources, Ltd., and serves as its CEO. His first book, Nail 'em!: Confronting High-Profile Attacks on Celebrities and Business, pioneered techniques for understanding and defusing crises.