The world's biggest automaker is apologizing, but it may take a major -- and expensive! -- gesture from the company to bring anxious consumers back into the fold. And Toyota needs a definitive fix for sudden acceleration, too.
RECALLED: Hundreds of thousands of 2010 Priuses are headed back to the shop. (Photo: Alex4981/Flickr)
Can Toyota be saved? I can’t believe I’m writing that, because I’ve long felt this was the smartest automaker in the world, building almost inhumanly perfect cars. Every year, a field of red circles from Consumer Reports and the purr of satisfied owners.
But it’s now so deep into damage control that, as a leading crisis manager puts it, a very dramatic gesture is needed. Think of the Tylenol recall (the first one; the latest crisis isn’t being handled as well), and Jet Blue’s grounded planes on Valentine’s Day (stranded passengers got not only full refunds but a voucher good for another flight). Yes, it will come with a heavy price tag, but Toyota really has no other choice after all that’s happened.
The situation now is bad and getting worse. Every day, there are new revelations and further recalls (the latest, announced late Monday, of 437,000 2010 Priuses worldwide, because of severe braking problems. In the U.S. alone, 133,000 Priuses and 14,500 Lexus 250h cars are going back to the shop as of Feb. 10.).
On the surface, Toyota is doing the right thing. Akio Toyoda, the grandson of the company’s founder, says in a Washington Post op-ed that he has offered Transportation Secretary Ray LaHood (who’s shown his impatience with Toyota, and even said, briefly, that people should “stop driving” affected cars) his “personal assurances” that the company will be open and honest with regulators. He pledged to “open a quality center in the U.S. to prevent a repeat of the defects that caused the company to recall millions of vehicles and halt sales of eight models in the U.S.,” reports the Wall Street Journal.
I don’t think this is enough, and neither does Michael Gordon, principal of crisis PR firm Group Gordon Strategic Communications.
Gordon, who was Attorney General Janet Reno’s spokesman in the second Clinton term, now helps clean up the muck at corporations and law firms. Remember the “Victor the Cleaner” character Harvey Keitel played in Pulp Fiction? Kind of like that, but legit.
According to Gordon, “The issue is that new revelations are coming out each day, and new rumors about new potential problems keep surfacing. Toyota is in response mode and therefore playing defense, but it needs to be proactive and go on the offensive. It needs to assess completely what potential problems exist, and come forward immediately with solutions that will work, because the longer this goes on and the more revelations come out, the harder it will be to prevent long-term damage.”
There have been 16 deaths attributed to sudden acceleration in Toyotas, and hundreds of injuries. Consumers are more than nervous; they’re scared to drive their cars. According to Gordon, “I can’t imagine consumers not thinking twice before going into a Toyota showroom today. The company has to do something bold, a massive rebate and financial incentive so people will take a look at them anew, or they’ll be playing catch-up forever.”
Gordon imagines some kind of large rebate going to all Toyota owners who have experienced sudden acceleration problems. But in one federal survey, that is one in 10 owners of affected Toyota models (the Lexus ES350 was surveyed).
There are many different approaches Toyota could take to healing the breach with its customers. A $500 check to the owners of every recalled car might seem to be a good step, but since there are eight million recalled cars (with some overlap) that could amount to billions. A better way, perhaps, would be to offer money to people who fill in some kind of online form confirming that they have experienced sudden acceleration. It would work like a Staples rebate form: Companies count on a small percentage of consumers actually taking the trouble to claim the money. That approach would have the added benefit of helping the company gather information on its still-unsolved acceleration problem.
The company has to definitively put sudden acceleration behind it as well. And that may mean installing, on every Toyota, a device that’s on most German cars today: An interlock that prevents the gas and brake pedals from being depressed at the same time. In Consumer Reports testing, cars so equipped return quickly to idle. Crisis averted.
Expensive? Yes, but it’s better than the alternatives.
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