Toyota’s crisis response is a two part story

By Henry Fawell
February 12, 2010

Like most riveting stories, the current recall crisis that has beset Toyota can be divided into
multiple parts.

In Part One, which is still unfolding, the company is responding

aggressively to a crisis. In Part Two, which will unfold in the
coming months, Toyota will have to respond to the inevitable
question from policy makers: “What did you know and when did
you know it?”

Let’s look at Part One.

In the last few months, Toyota has recalled a staggering 8 million

vehicles and halted production on 11 different models due to a plague of sudden accelerations in
its cars. The crisis has rocked an auto company that for a half century had been synonymous with
safety and reliability.

After a slow start, Toyota is responding the way any company should that is serious about
rebuilding its reputation. Here are five key components to Toyota’s crisis communications
strategy.

Be honest about your situation. Toyota recognized it was in a hole and stopped digging. It halted
production on nearly a dozen different models, pledging to fix cars currently on the road before
pushing new ones off the manufacturing line. The move is bold and not without serious financial
repercussions, but it sends an unmistakable message that the company will bear any burden to
keep its customers safe.

Say “I’m Sorry.” Toyota President Akio Toyoda apologized to customers and took personal
responsibility for the recall, as did the chief of Toyota’s U.S. operations. Sound easy? Ask
ACORN and Tiger Woods what happens when you respond to a public crisis with defiance or
indifference.

Fix the problem. Toyota quickly found a structural fix to the sticky accelerator pedals plaguing
its vehicles. This may seem obvious, but too many companies believe that crisis response begins
and ends with a good public message. They ignore the underlying problem that led to the crisis,
whether it’s a sticky brake pedal or, as we recently saw in the financial industry, a huge appetite
for bad debt. Toyota found a solution and dispatched thousands of employees to work 24/7 to
repair vehicles currently on the road.

Start talking. Toyota’s public outreach has been relentless. Here’s a quick count of media
channels they’ve used to touch consumers, opinion leaders, and policy makers nationwide: press
conferences with executives; live television and radio interviews; huge TV ad buys; full page ads
in newspapers; op-eds by Toyota executives in The Washington Post and elsewhere: video
streaming on Youtube; a regularly updated website; a toll-free hotline; paid search ads on
Google, and; regular recall updates for the company’s 100,000 fans on Twitter and Facebook. In
sum, they’ve used every means of communication short of the carrier pigeon.

Enlist your friends. Toyota wisely called on a few friends to speak on the company’s
behalf. NASCAR star Michael Waltrip posted a message on Youtube stating his belief that
“Toyota won’t settle until they get it right, and I know they will make it right.” The company is
publicizing testimonials from satisfied Toyota customers, and is working closely with members
of Congress who represent states with tens of thousands of Toyota employees.

Okay, so Toyota gets crisis communication. That is rare, given that a lot of successful companies
believe you don’t make money by showing contrition.

That brings us to Part Two.

The recall exposed Toyota’s larger problem: their inability to resolve a brewing crisis that
reportedly first surfaced in 2002 when complaints of sticky accelerators spiked. In 2005, Toyota
recalled more vehicles than it sold. Two years later, Consumer Reports stopped automatically
endorsing Toyota vehicles due to what it considered declining quality. Even worse, recent news
reports suggest that Toyota failed or refused to disclose vehicle problems to federal regulators
over a period of years.

In the coming weeks, Part One of this story will come to a close. Shortly thereafter, Part Two
will begin with congressional hearings, investigative journalism, and consumer lawsuits likely to
take center stage.

Toyota’s crisis communications strategy will have to adapt to this new phase. They would be
wise to be as aggressive and creative as they’ve been in recent weeks because, like many
compelling stories, the second act may prove to be the most dramatic.

Henry Fawell is a communications consultant for Womble Carlyle Sandridge & Rice PLLC in
Baltimore and also served as press secretary to Maryland Governor Robert L. Ehrlich, Jr. He
may be reached at henry.fawell@wcsr.com.