By now we have all heard plenty regarding Toyota’s problems, the huge recall and production shut down. This has to be the biggest PR crisis in the industry since the Ford-Firestone problems nearly a decade ago. We have seen the Twitter and blog chatter and it is ugly.
Toyota shares have tumbled nine percent on the New York Stock Exchange. Rental car companies are pulling Toyotas from their fleets. Competitors are acting fast to gain share amongst the situation. Another round of recalls in Europe is announced. And then, Toyota announces to stop production of eight of its 10 best-selling models in North America. Seems an extreme course of action considering their current financial woes.
I am guessing Toyota isn’t concerned about short-term financial impact as much as they are long term customer trust and loyalty. Shutting down production was a necessary step to reassure frantic consumers. The company has spent 30 years building its’ reputation for quality and the company has acted accordingly; a strong message to send to your customers.
Visit the Toyota USA Twitter page and you will find an automaker with 14,000 followers, also following 13,000 other people. What’s more, is that they are posting updates about the recall situation every 30 minutes. Honest effort to communicate on their part considering they have been proactive using Twitter as a communication tool for some time to build that type of following. And they aren’t just using Twitter as a tool to share their own information, they are commenting on their followers questions as well. More info can be found on their YouTube channel, Web Site and Press Room.
So why can we continue to trust Toyota? Trust is all about doing the right thing and then communicating that you are doing the right thing. For me, I’ll take our Tundra in for the recall. Come spring, I’m still planning on trading in my Chrysler for Toyota number two.
Author – Jess Held
www.lessingflynn.com
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{ 5 comments… read them below or add one }
I think the evidence and groundswell forced Toyota's hand, personally. There have been reports of uncontrolled/unintended acceleration for several years, and Toyota has always denied there has been anything wrong with their vehicles. Now that there are multiple deaths attributed to this problem, they are forced to play catch-up. Not only that, but by not having a solution in place, they are alienating their future customers. My husband and I just bought a new car, and we decided to avoid Toyota specifically because of this problem. My father and father-in-law also said we shouldn't look at a Toyota now. There are also people that own Toyotas that may not purchase another because of this issue.
I don't think Toyota had a crisis plan in effect to effectively communicate to customers and owners about the problem, and once Congress started to make noise, they had to react. By not providing all the information up front (i.e. "This is what is wrong with our vehicles, this is what we plan to do to make it right"), they're caught behind the ball. The story has been written by the media, instead of being written by Toyota. Do I think they can come back from this? Sure, but they'd better be damn sure they have the correct fix and not have any more missteps. Another accident attributed to unintended acceleration may kill Toyota's reputation for a very long time.
Interesting case study. I agree, they are doing what they can with the situation and appear to be open to transparency through their communication on Twitter. I applaud their efforts thus far. They are essentially saying ‘we screwed up and will stop production until we can find a solution.’ That takes guts cause most businesses would try to hind behind their error until they found a solution by spinning the situation to their benefit. I love transparency in business, seems like more and more companies realize how important it is.
Toyota has a vast reservoir of good will, both by general reputation and through the quality of its vehicles. They'll weather the storm by providing superior customer service. Heck, they may even get new customers and make some money off of routine service. At the very least, they will get their databases updated.
Good comments! Now we are hearing the recall has impacted Prius as well?
@jessheld: Yep. Toyota is saying the Prius problems are linked to a computer/electronic issue, which is a completely separate issue from the current gas pedal fix. The fact that this is coming out several days after the announcement about a fix for their other cars is not good for their image. It looks like they're hiding information from the consumer, which may beg the question in consumers' minds: How much more are they not telling us? As Claire rightly observed, they may have a lot of goodwill built up, but if they don't have a press conference or an interview soon where they tell as much as they can and assuage concerns and fears, this will not end well.