Friday, February 12, 2010, 11:09 AM

Toyota’s crisis response is a two part story

(Image credit: Junko Kimura/Getty Images)
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 (pictured) 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.

This article was first published in today's Daily Record.

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