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Toyota Goes on PR Offensive, Says Dealers Will Begin Repairs this Week
Published: 2/2/2010
Toyota has embarked on a public relations offensive, while production is set to restart on 8 February, but the U.S. Congress is now turning its attention to prior complaints filed with the National Highway Traffic Safety Administration and Toyota to see if there is a history to the crisis.
IHS Global Insight Perspective | |
Significance | Toyota Motor Sales USA president Jim Lentz took to the airwaves yesterday to formally apologise for the current recall crisis and to announce a fix. The company has also taken out full-page advertisements in several publications as part of a public relations offensive. |
Implications | The company has idled five North American assembly plants, but it has now announced that repaired accelerator pedals are on their way from the supplier and that production will resume on 8 February. |
Outlook | The U.S. media, which have in the past been favourable to Toyota, seem to have turned on the company and have carried out a number of investigations into the issue, prompting Congress to launch its own probe that will see two separate hearings held on the matter. |
Toyota has started the week and month off with an aggressive media blitz to try to limit the damage caused by the escalating recall crisis affecting its vehicles globally. Top executives in the United States have taken to the airwaves, advertisements have been placed in national newspapers, and the company has held its first media conference call to try to set the record straight about what it is doing, and where it is going. The latest developments include:
- Toyota Announces Specific Fix, and Plan to Implement It: Toyota has announced a specific fix for 2.3 million vehicles with faulty pedals, as well as the 150,000 vehicles in inventory at 1,200 Toyota dealers around the United States. Toyota Motor Sales USA president Jim Lentz took to their airwaves early yesterday to announce the fix and to publicly apologise to the U.S. public on "The Today Show". The countermeasure involves installing a steel reinforcement bar into the accelerator assembly's friction plate, preventing a build-up of moisture and the resulting sticking that has been the cause of the issue, according to Toyota. Fielding questions from a fairly hostile media later in the day on a conference call, Lentz expressed the company's confidence that the fix will address the unintended acceleration issue, and said that the company's extensive testing has not indicated an electronic issue with the drive-by-wire electronic throttle control. The repair will take approximately 30 minutes to perform, and the finished work should be invisible to drivers; Toyota will cover all repair costs associated with the work.
- U.S. Management Issues Public Apology: Lentz has also posted a two-minute video on Internet video site YouTube, in which he publicly apologises for the recall crisis and the resulting media storm that it has generated. "Toyota has always prided itself on building high quality, durable products that customers can depend on", says Lentz, dressed in a dark suit and sitting before a brown backdrop. "I know that we have let you down. We are redoubling our efforts to make sure that this does not happen again", he says. The video has also been posted on Toyota's main Web site in the United States. In addition to the video apology, the company has taken out full-page advertisements in several national newspapers announcing a pause in production in order to safeguard its customers.
- Production at Toyota's North American Plants Will Resume on 8 February: New pedal assemblies from supplier CTS are already in production, according to Toyota, and are en route to the company's plants for installation in new vehicles. Production was halted yesterday for the entire week as Toyota concentrates on countermeasures. Production is now scheduled to resume on 8 February, Lentz said in the conference call with the media, at all of its plants. Toyota did not specify how much production is likely to be lost, or what the total cost to the company will be from the extended week-long shutdown.
- U.S. House Calls for Second Hearing on Toyota Crisis: The U.S. House of Representatives' Oversight and Government Reform Committee has called a 4 February hearing entitled "Toyota Gas Pedals: Is the Public at Risk?" that will examine the government's role in investigating the issues that led to the Toyota recall. Increasing numbers of reports are surfacing that the National Highway Traffic Safety Administration (NHTSA) had received hundreds of complaints from consumers about unintended acceleration, but that nine subsequent investigations ultimately led nowhere, until 2007 when the floor-mat interference issue was again raised. "NHTSA wants to assure owners of Toyota vehicles that it has taken, and will continue to take, all steps necessary to ensure that Toyota appropriately addresses problems related to unintended acceleration in its vehicles", the agency said in a statement. "NHTSA takes every allegation of safety problems seriously and that is why we read every consumer complaint within one business day of receipt. In recent years, NHTSA has conducted several investigations into possible causes of unwanted acceleration incidents experienced by owners of various Toyota models." The hearing will precede another called for 25 February by the House Energy and Commerce Committee, which has also asked Toyota and the NHTSA to submit a number of records.
Outlook and Implications
Toyota spent much of last week floundering in the harsh glare of an increasingly sceptical and hostile media, but it used the time to gather itself for a major media fightback this week. Thus far, it seems to have been reasonably well received, but the conference call yesterday between Jim Lentz, Bob Waltz (vice-president of product quality), and the automotive media was frosty to say the least. Toyota's explanation of when it knew about the pedal sticking issues with regards to the lesser 2.3 million vehicle recall related to faulty CTS-made pedals is being treated with some scepticism, given reports in the media about issues arising in Europe in 2008 that were not addressed. Needless to say, Toyota is facing something of an uphill battle to regain its reputation as a provider of unquestionably reliable vehicles, as doubts are now likely to be in consumers' minds for some time. The investigations by various media outlets into what Toyota knew and when it knew it, and what role the NHTSA may have played, are likely to receive a lot more attention later this week when the first of two hearings regarding the government agency's investigations and responses gets under way in Washington, D.C.. Toyota will have to continue to be diligent in its responses in the media in order to prevent the hearings from becoming a witchhunt.Most Viewed Articles
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