Hits and Misses

For decades, Toyota  has been known for quality and reliability.  Then on Jan. 21, 2.3 million vehicles were recalled for sticky accelerator pedals and on Feb. 4 the National Highway Traffic Safety Administration said it was opening a formal defect investigation into the braking of the 2010 Toyota Prius. More than 9 million cars have been recalled worldwide.

Today, the president of Toyota, Akio Toyoda, apologized at a hastily arranged news conference for the quality problems that led to the recall and when asked whether Toyota had underestimated the situation, he said, “I believe what is happening now is a very big problem. We are in a crisis,” according to The New York Times.

You think?

They are financially strong enough to take the estimated $2 billion hit to make repairs, but their reputation and resulting loss of sales is another story. They ignored everything I thought the whole world knew about communicating in a crisis: They have been too slow to recognize and acknowledge the problems, until today their leader, Akio Toyoda, was absent, and they have not communicated a solid solution (they’re forming a committee, Toyoda announced today).

The delays have made Toyota seem confused and the multiple problems are tarnishing that once strong reputation that led people to write books like: “The United States of Toyota: How Detroit Squandered Its Legacy and Enabled Toyota to Become America’s Car Company.” As BrandWeek reports, consumer perception has plummeted.

But many a corporation and brand have withstood such challenges by communicating quickly, honestly and confidently. Toyota’s PR blunders may mean the company never fully regains its reputation and lofty perch among automakers.