TOYOTA’s-Recall-Crisis

TOYOTA’sRecallCrisisM10120962011.1ContentsTOYOTA’sNightmareWhatdidTOYOTAdoVoiceAroundLearningFromTOYOTAWHOWeareQ&ANightmarishMemoriesAugust28,2009:Off-dutyCaliforniaHighwayPatrolofficerMarkSayloristravelingonHighway125inSantee,California(northeastofSanDiego),withthreefamilymembers,whenthe2009LexusES350heisdrivingsuddenlyacceleratesoutofcontrol,hitsanothercar,tumblesdownanembankmentandcatchesfire.Whilethecariscareeningdownthehighwayatspeedsestimatedtoexceed100mph,oneoftheoccupantscalls911andreportsthatthecarhasnobrakes.Allfourwerekilledintheensuingcrash.MarketResponse20092010.32011TIMETOYOTAMKTTOYOTA’sMKTPerformanceDuringtheCrisisWhatTOYOTAdo?1/2Blank……Until----Sep14,2009:ToyotaindicatedthattheLexusdamagedmayhavehadthewrongfloormatsinstalled,interferingwiththegaspedal.Sep29,2009:Toyotaannouncesitisrecallingthefloormatson4.2millionToyotaandLexusvehicles.Oct2,2009:NewlyinstalledToyotaCEOAkioToyodapublicallyapologizes.Oct18,2009:TheLosAngelesTimespublishesthefirstofseveralstoriesconcerningclaimsofunintendedaccelerationinToyotavehicles.Oct30,2009:Toyotabeginssendingletterstoownersnotifyingtherecall,butsaid“nodefectexists”.Nov4,2009:Toyotaissuesanotherpressreleasedenyingmediareportsaproblemexistswithitsdrive-by-wireelectronicthrottlesystem.Nov8,2009:TheLosAngelesTimesclaimsToyotahadignoredover1,200complaintsofunintendedaccelerationoverthepasteightyears.Nov25,2009:Toyotadealersareinstructedtoremovethegaspedalandshortenitsoitcannotinterferewiththefloormats.Nov29,2009:AnewLosAngelesTimesstoryclaimsanumberofToyotadriverssaytheirvehicleshadstillacceleratedoutofcontrolwiththefloormatsremoved.Dec5,2009:ToyotawritestoLosAngelesTimestodefendsNHTSAanditsmethodology.Dec23,2009:AnotherstoryintheLosAngelesTimes,thistimeaccusingToyotaofhidingdefectsfromcustomersandregulatorsoverthepastdecade.Dec26,2009:AToyotaAvalonwithoutFloormatscrashesintoalakeinTexasafteracceleratingoutofcontrol.Jan11,2010:Toyotaannounceditsbrakeoverridesoftwarefixwillbemadeglobalby2011.Jan21,2010:Toyotarecallsanother2.3millionToyota-brandvehiclesbecauseofaproblemwiththegaspedalinNAandEuro.Jan26,2010:ToyotaannouncesitisimmediatelyhaltingthesaleofallmodelsaffectedbytheJanuary21pedalrecall,andthatitwillshutdownassemblylinesforthosemodelsatfiveNorthAmericanplantsforoneweek.Jan27,2010:U.S.TransportationSecretaryRayLaHoodtellsChicagoradiostationWGNthegovernmentaskedToyotatostopsellingtherecalledvehicles.WhatTOYOTAdo?2/2IssueEscalatingStopSales&Production2010.1.27Firstaccidentoccured-4.2MinUS-CEOapologize-DeniedNHTSAresultTheToyotacrisisescalatedfromSep29th2009toJan27th2010……Toyotamade2wavesrecallandfinallystopsellingtherecalledvehicles.SecondRecall2010.1.21FirstRecall2009.9.29Secondaccidentoccrued-2.3MinUS&2MinEU-GlobalInfection-AdmittheproblemUSGovernmentban-Haltingsales-ShutdownassemblylinesVoiceFromCustomer&MediaCustomerMediaIt’sACrisisMadeinJapan.Idon'tbelieveIcanevertrustaToyotacaragain.Customers’voiceIdon'tbelieveIcanevertrustaToyotacaragain,saidanother.Theyhavetoshowalottochangemymindinthefuture.“Theyneedtofixtheproblem,wroteanotherrespondent.IwillnotshopforanotherToyotauntilIknowtheproblemhasbeensolvedandallcarsaresafe.“FivehundredAmericansweresurveyedonline,loyalistsfrom72%downto60.7%Theresultssuggesthowquicklyaconsumer'sperceptionof,andthetendencyaparticularbrandcandeterioratewhenamarketerdoesnotreactquicklyanddefinitivelytoamountingcrisis.Toyota'sbotchedresponsetoitsescalatingproblemshasdeeprootsinJapan'slegalsystemandcorporatetradition.Whatthecompany'stroublesmeanforthecountry.TherealstorybehindtheToyotarecallisthateventhismostadmiredofJapanesecompaniesisutterlyincompetentwhenitcomestothefundamentalsofstrategiccorporatecommunications.Theshameandembarrassmentofowninguptoproductdefectsinanationobsessedwithcraftsmanshipandqualityraisesthebarondisclosureandassumingresponsibility.Toyota’sstoryshouldbetranslatedintoJapaneseanddulymemorizedbyeveryJapaneseexecutivewhoeverseekstosellaproductoutsideofJapan.Media’svoiceCompetitor’svoiceThedelayindealingwiththeproblemnowleavesToyotainanuntenablepublicrelationssituation.It'sforcedtoalarmcustomersandtakevehiclesoffthemarketbeforetherepairpartsarereadyTherearealwaysconsumercomplaintsandwarrantyinformation,partsreturndataandotherthingsthatcanindicateproblemsbeforetheybecomeofsuchcolossalmagnitude’twait!!!AttitudepriortoresultLeadersshow!GlobalThinkingQ&AM1012096