Communications toyota crisis final

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Toyota Crisis – 2010 “Pedal to the metal”

Presented by: Team 2 Paramveer, Samuel, Daria, Nathalie, Sid, Wassil, & Deve

Agenda

Presentation Structure

Presentation Objective

The Beginning…

Crisis Timeline

Analysis

Recommendations

Key Takeaways

Objective

To introduce the 2010 Toyota crisis

Analyze Toyota’s communication (good/bad)

Describe how communication can effect the outcome of any crisis

Provide future communication recommendations

The Beginning…

Aug 28, 2009 – An improper installation of an all-weather floor mat from an SUV into a loaner Lexus sedan by a dealer led to the vehicle's accelerator getting stuck, causing a tragic, fatal accident…

… and launching the most challenging crisis in the history of iconic auto maker ‘Toyota’.

Crisis Timeline

Aug 28, 2009: Four people killed in an acclaimed "no brakes” Toyota Lexus crash

Oct 25, 2009: Investigation conducted by local authorities and the National Highway Traffic Safety Administration (NHTSA)

Oct 30, 2009: Toyota "no defect existence” letters to customers

Nov 25, 2009: Toyota recalled 3.8m vehicles to change all driver’s side mats, and denied media reports that a problem exists with its electronic throttle system (USA)

Dec 5, 2009: Media re-iterates its position on its findings about the acclaimed unintended acceleration with Toyota products - Toyota responds

Dec 26, 2009: Another motor accident with all four occupants dead

Jan 11, 2010: Toyota announced its brake override software fix made global

Jan 21, 2010: Toyota recalled another 2.3m vehicles because of ongoing ‘gas pedal’ problems (USA)

Jan 27, 2010: Another 1.1m vehicles added to the Nov 25, 2009 recall (USA)

Jan 29, 2010: 1.8m Toyota recall for faulty accelerator pedals (Europe/China)

Feb 1, 2010: Toyota declares plans to fix the accelerator

Feb 8, 2010: Toyota recalls .5m hybrid vehicles worldwide

April 5, 2010: NHTSA plans to seek $16.4m fine from Toyota for failure to acknowledge the pedal defects with the acceleration

The Analysis

Reactive Mindset

Hidden Information

Not Involving All Parties

Huge Revenue Lost

Tarnished Brand

The Learning's

Reputation

Friend…or Foe?

Clear communication channels

CEO involvement

Direct communication with all share holders (i.e. customers, employees, dealers)

More convincing explanations

Address immediate customers concerns first

“Am I safe to drive my car?”

Remain transparent

Takeaways

Listen to customers

Lead from the top

Communicate early and often

Provide definite answers

Corporate culture drives future success

“People want to see a company take full responsibility, be empathetic to the victims and their families and be in control by outlining the problem and how they intend to solve it…especially the CEO.” ~ Ong Hock Chuan

Over 8 million cars recalled

Over $30 billion in losses

Multiple lawsuits

11% drop in share prices

Loss of brand equity

Crisis Communication

Questions?

Resources

http://www.crisisnavigator.org

http://www.cbsnews.com/8301-505125_162-31041939/lessoned-learned-from-toyotas-crisis/?tag=bnetdomain

http://www.reuters.com/article/2010/02/03/retire-us-toyota-pr-idUSTRE6122JS20100203

http://danielkeeney.com/change-the-story-if-bad-news-piles-up/

http://2011-6209-big4.blogspot.com/2011/04/toyota-crisis-management.html

http://www.matteventoff.com/toyotas-crisis-communication-hiding-doesnt-work.html

“Management Communications”, 4th Edition, James O’Rourke, IV