Consultant David Margulies at The Margulies Communications Group was previously an award-winning investigative reporter and network journalist. In addition to obtaining positive media coverage for his clients, he has helped them navigate some of their most difficult business crisis situations and shown them how to avoid negative publicity in many cases. He is frequently interviewed in major publications and on national television about issues involving litigation, crisis communications and the media.
As of early February, amid ongoing breaking news coverage, how has Toyota been handling the recall thus far?
While Toyota is using traditional communications tools such as Web sites and newswires as well as social media, they are falling behind in terms of communicating their key messages to their most important audiences. News events are overtaking their ability to deal with them effectively. They should be making heavy use of television, radio and newspapers to get key messages out on a daily basis as opposed to reacting to the latest “revelations.” They should be looking for utilizing far more third party experts to support their case. In addition, they need to dramatically improve communications with dealers. They should have already announced not only how the cars will be fixed but a system for scheduling appointments with dealers and a gift to each customer for the time they will have to spend getting their cards repaired. A top Toyota spokesperson should be available to the networks every day; more dealers should be schooled on how to speak to the media in their communities and available for interviews.
You’ve made comparisons to the Tylenol poisoning situation in 1982. What are the similarities and differences related to Toyota?
The initial similarity was that Tylenol pulled the product off the market, found a simple-to-understand and easy-to-demonstrate fix and reintroduced the product without any long-term damage to the brand. Johnson & Johnson executives were all over the news media explaining the issue. The major difference is that Tylenol was the victim of a criminal who poisoned their product after it was on store shelves. In Toyota’s case, the issue is a problem with the design and manufacture of their product.
Can comparisons also be made to the Firestone/Ford Explorer controversy?
Ford and Firestone began pointing fingers at each other when the Explorer began having rollover problems. That is never a good idea since both parties are likely to be defendants down the road. The same is happening with Toyota and the company that built the parts in question. Pointing fingers never helps.
What is your forecast as to how the Toyota controversy will impact the company’s reputation and sales going forward?
There will continue to be negative publicity fueled primarily by plaintiff’s attorneys and perhaps some members of Congress. It will take a long time to fix that many cars and trucks. If Toyota makes the fix as painless as possible for customers and keeps them informed, they will have many years to win back their loyalty if the cars and trucks perform well. Unfortunately, there will be a major impact on sales in the short term. However, if Toyota can put this issue behind them, they can eventually recover.
Japanese industrialists and government officials are expressing concerns that the entire nation’s manufacturing expertise will suffer harm to their reputations. Do you agree that this could be an issue?
That is more likely to happen if there are repeated problems with other Japanese products. In addition, many of the recalled cars were made in the U.S.
Was it wise for Toyota to make specific reference to a supplier apparently prior to the extent of the problems being addressed?
They may have felt the need to reveal who made the parts since the information may have been available from other sources. However, there should be no finger pointing. Both companies should be working together to deal with the problem and support each other.
If an aftermarket supplier, distributor or retailer is faced with a similar quality control problem, what are the initial steps that should be taken?
Every company should have a crisis management plan in place that identifies likely issues, assigns responsibilities, makes sure that you have outside PR experts in place and have thought through how you would deal with an issue before it happens. You would be amazed how many crisis situations we have handled or prevented that never resulted in media coverage or damaged someone’s business.
How soon should a crisis consultant such as yourself be called in?
Someone who helps write your crisis plan will have a better understanding of your business should a crisis occur and will be a known quantity. Otherwise, as soon as there is an inkling of an issue, you should get input from crisis management experts and your legal team. Too many organizations go into a state of denial hoping that no one will find out about the problem. It is much more difficult to deal with this type of issue after it becomes public and the media is on a tight deadline.
Is it ever appropriate to stonewall the media or offer only a “no comment?”
The “no comment” is the same as pleading guilty. If you can’t answer a question, explain why. Most of the time, we can craft a response in the early stages of an issue that satisfies the media and does not create problems for the client.
Does this also hold true if the company faces lawsuits or is in criminal jeopardy?
Experienced PR experts and legal counsel can develop statements that will not cause problems in the legal arena. While lawsuits are common, you can’t allow your reputation to be destroyed because of the threat of litigation. Often the negative publicity has the potential to do more damage than the lawsuits.
Local undercover TV I-Teams occasionally visit repairers with a vehicle outfitted with a specific mechanical malfunction, and the shop is scrutinized regarding the recommendations made for fixing the problem. How should shop personnel handle the follow-up interview if the procedures are questioned?
If a journalist shows up unannounced, we ask them to make an appointment if they want an interview and let us know what the story is about. You can’t ask for detailed questions but you should never do an off the cuff interview. We also immediately contact the station’s news director or executive producer to make the same request. If they want to know about a car they brought in, ask them to bring it back so you can look at it. If you made an error it may be easier to admit it and explain what happened. All employees should be trained to say, “I am not a spokesperson for our company. Please give me your name and number and I will have someone contact you.”
Sometimes a manager will arrive on the scene and put his or her hands in front of the camera or threaten to have the crew arrested for trespassing. Is this ever an effective technique? What is a better strategy? How should the owner discuss the TV report with customers who may ask questions about it?
If a reporter shows up at your door, ask them to make an appointment. Explain that you are busy at the moment and will be glad to respond to their questions in a reasonable time. You can always call the station’s assignment desk and ask them to tell the crew to leave without making the request on camera. Remember, they are free to take pictures of your business if they are standing on public property such as a sidewalk or street. If you feel you are being mistreated or that the story may be inaccurate – as opposed to just critical – contact the station’s news director or executive producer by telephone. Say that you are warning them “in advance of publication/broadcast” that you feel the story may be inaccurate and could damage your business. If you feel the story was inaccurate, have a simple explanation for your customers. The public doesn’t trust the news media and believes they sensationalize stories. If the criticism is accurate and you made a mistake, own up to it, apologize and explain how you will prevent it from happening again. I would tell customers that you have a policy that if something isn’t fixed they can bring the car back and you will refund the cost of that repair.
