Toyota and PR: What Went Wrong?

Dennis DesRosiers, president of DesRosiers Automotive Consultants and a Canadian, is in a unique position to see the American problem and call it what it is. He writes today about the Toyota PR debacle.

Toyota Motor Corporation is certainly responsible for its marketing and public relations disaster involving the recall of millions of vehicles world-wide for a variety of real or imagined failures.

Toyota has:

1. Denied that problems existed
2. Hidden data that some models had an acceleration/braking problem
3. Bragged internally that it was avoiding the scrutiny of the governmental authorities
4. Been slow to acknowledge there was difficulty when it was clear that some existed
5. Tried to trivialize the problems

However, Toyota has plenty of bureaucratic, legal, and public perception/attitudinal complications creating this public relations perfect storm that are largely beyond their making or control.

Here are the realities in Toyota's environment DesRosiers so clearly points out:

1. The U.S. is a legal-driven society and the lawyers see very deep pockets in Toyota and these OEMs.

2. Government in the U.S. is badly broken. This is a problem because politicians are elected to do something. Why not beat up on an OEM? With Toyota, all the right buttons are there: safety, Japanese, the appearance of backroom deals, etc.

3. Society is entangled in a growing net of government regulations. Regulations are extremely expensive for the auto sector, so all OEMs play a cat-and-mouse game: hiring brigades of lobbyists, finding and exploiting cracks in the system, etc.

4. Most people are unaware there are literally thousands of vehicle complaints filed with regulators each year. The vast percentage can't be replicated, leaving open the question of whether there was a problem with car or driver.

5. Consumers won't compromise on their desire to own the vehicles of their dreams at ever lower cost. A critical part of Toyota's low-cost success lay in moving to common components across its product range. Common components means that when trouble occurs, it affects millions of vehicles across many platforms.

6. No vehicle is bulletproof. Virtually all OEMs are guilty of over-promising and under-delivering, and when consumers realize this, many seek revenge seeing this as an opportunity to right all wrongs.

7. The American economy is still in a shambles, so the natural tendency is to go protectionist: blame someone else, close the borders, look inward. Toyota is caught in this isolationist sentiment.

8. The No. 1 player is always a target. For generations, it was GM; today, it is Toyota, joining McDonald's, Wal-Mart and the New York Yankees among highly successful enterprises that many Americans love to hate.

9. There is a lot of pent-up hate toward foreign nameplates. Toyota and other offshore OEMs have caused a lot of pain in North America, where 1.3 million unionized auto workers and about a million car dealer employees have lost their livelihoods as overseas makers beat up on the Detroit Three.
   

10. The unions: They have huge equity positions in GM and Chrysler, and all of Ford is unionized. These companies could benefit from Toyota's woes. Unions are likely rabble-rousing behind the scenes.

11. The vast majority of road crash deaths are caused by driver error, but that point is lost in the media. It's human nature to want to blame the machine. Death is dramatic and the media always seem to spotlight the one in 1,000 situations where the vehicle was the problem.

12. Washington is a part owner of two of Toyota's biggest competitors, GM and Chrysler, so the politicians have skin in the game and are inherently biased. Many who talk to me believe this feeding frenzy is politically motivated, a suspicion that's hard to dispute. Toyota execs have not used this as an excuse and have said publicly they do not believe this is the case. This is not to let the OEM's off the hook, but it will be interesting to see if there are hearings in Washington on the current GM recall.

In its recovery from this marketing disaster, Toyota must carefully calculate and understand the reality of these things so it can effectively map its strategy for brand recovery. Learn more about the rest of the story here in DesRosiers' article.