Tag Archives: toyota crisis

Bringing perspective to the Toyota crisis–Atlantic article

Congratulations to Atlantic magazine for attempting something that is exceedingly important for everyone concerned about reputation management. Their article “What Was Really At Fault for the Toyota Recalls” on May 1 attempts to analyze the situation and assign blame for the frenzy that was Toyota’s worst crisis and one of the most important reputation crises of the past decade.

There were three potential bad guys in the Atlantic story. Toyota, the media and the federal government. Anyone who has read my take on this story knows that I think Toyota was pretty much the innocent party here and the real bad guy is the media and the politicians who once more responded to media provocation rather than the facts. Mr. Cole, writing for Atlantic, still appears to assign a significant portion of the blame to Toyota demonstrating how their quality had slipped in their pursuit of becoming the number one automaker in the world.

In February 2007 I published a post warning about the danger that Toyota faced as it headed toward being number one. I referenced Microsoft and Wal-Mart as examples of those who are honored and admired as they are climbing to the top, but once they get there, we¬† and the media love to take them down. Jack Fuller talks about this in his book “What is Happening to News” as it relates to celebrity coverage and how journalists seem to enjoy taking down the powerful.

So, I find Mr. Cole’s assessment that Toyota’s quality problems were a major contributor to the crisis. Their quality was still at or near the top, they seemed extraordinarily quick to issue safety recalls (and so even more so now), and while they may have responded a little slowly in hindsight, no one could have predicted the maelstrom they suddenly found themselves in.

Generally, I think the Atlantic article is a very helpful assessment. I think he is too defensive of the media and I think he downplays the obvious motivation that the administration had in piling on Toyota given its competition with the Government Motors–Mr. LaHood’s boss had a lot at stake in this game. I think Mr. Cole doesn’t give enough attention to the role of social media, even though he identifies the YouTube video of the well publicized Saylor crash as a major contributor. And I think the main thing he missed was the tremendous incentive we have in our society to creating this kind of problem for the benefit of trial attorneys. Plaintiffs attorneys have far more influence on the kind of hyped-up media coverage we see in this situation–if you have any doubt read the book about the Ford-Firestone crisis.

Toyota paid an extraordinarily high cost for the innate desire in our culture for a big crisis. We all pay a high price for that. And every organization out there with high brand value has to look at this and ask: are we next?

Questions rising about US government's role in Toyota attacks

Crisisblogger readers know that I have commented frequently on the inherent conflict of interest resulting from the Obama administration’s investment in GM and Chrysler. While clearly an unintended consequence, the result has been the perception of conflict in their role as regulator of the auto industry and participant in it. How can one competitor regulate another. I have been shocked and amazed that the US media, even the ant0-Obama conspiracy theorists in the media, have not picked up on this very serious problem.

But the conflict of interest is not escaping the Japanese and while Toyota has been apparently cautious in bringing this problem to light, Japanese papers are not. This article from Daily Dog reports that a conservative paper in Japan is raising the question whether or not the Obama administration is attacking Toyota to raise his approval ratings.

I don’t think I am being a conspiracy theorist to suggest there is a problem here. The truth is you can’t have a dog in the hunt and be seen as an objective arbiter of what is in the public interest. No one is that pure, objective and rationale. There is a very big dog in the hunt here for the administration in part because of the dependence on US union votes. Toyota’s problems are a god send to GM, if not an Obama send. When Transportation Secretary Ray LaHood got way in front of the data by suggesting that Americans stop driving their Toyotas that over the top pronouncement really began looking like a politically motivated piling on.

From a crisis management standpoint, when you have the black hat on as Toyota clearly does, one of the most important strategies is to place it on someone else. In this case, the Obama administration by their investment in Detroit has given the beleaguered automaker an excellent target. And the best way possible is not for them to do it, but for those who stand behind them to do the finger pointing. It appears to be happening.