What You Can Learn from Firestone & Ford
During recent months, the Firestone/Ford Explorer fiasco has shaken the entire automotive industry to its core. There was the Ford Motor Company, the stalwart pillar and Wall Street darling of the automotive industry, involved in a recall of one of its most popular sport-utility models. Secondly, the 100-year old Firestone brand name is tarnished beyond repair. Worse yet, grieving families mourn the loss of loved ones due to repeated tire failures. What went so wrong? The actual scientific investigation into the tire failures may take months or years to unravel.
The problem associated with these tire tread separation incidents seem like a simple chemistry lesson. Extremely Hot Weather + Rubber Tires + Powerful Sport Utility + Short Stopping Distances = Tread Separation. I know this is extremely simplistic but it makes sense. The real question is this: Is this problem related to just Firestone tires or all tires? After the initial revelation of Firestone's problems, other tire makers underwent scrutiny for their tire separation incidents, as well. This gives some degree of credence to the possibility of a more widespread problem.
In the midst of the recall maelstrom, a 100-year-old partnership between Firestone and Ford crumbled. The finger pointing extended from both companies squarely at the other. What caused these two companies to implode a century-old car maker/supplier partnership? The answer lies somewhere between liability concerns, bad press and consumer distrust.
It's important to understand the differ-ences between American and Japanese cultures when examining this latest crisis. In Japan, when companies experience scandals, recalls or financial problems they prefer to handle it quietly and only communicate with necessary parties. This means customers, partner companies and affected consumers. These companies prefer to take their lumps and enter into a quiet period. During this “shame” period, large press conferences and extensive press releases are rare. In the U.S., massive public information campaigns, investigative television news magazines and eager reporters trumpet corporate mishaps on a daily basis.
In late August, Ford's Jac Nasser went on national television to demonstrate that Ford was taking responsibility and doing everything to make the situation right with consumers. To many consumers, this announcement was several weeks too late. An immediate admission of the problem with an associated action plan was needed in early August, not late August. Ford’s public relations execution was flawless but too late. The damage had been done.
In September, both Firestone and Ford officials testified before Congressional committees investigating the tire failure issue. Congress chastised Ford and Firestone for their lack of disclosure and subsequent handling of the recall. The finger pointing between Ford and Firestone continued at a furious pace. During all of this, rumors swirled that Ford was desourcing Firestone on several high-volume truck programs and Firestone scrambled to find new PR representation.
Needless to say, this debacle must have OEM and supplier executives tossing and turning at night. Why did Ford turn on one of its own suppliers? What happened to partnering with suppliers? Why did Fire-stone continue to deny the problem as it spun helplessly out of control? Are our brands and products one recall away from Congressional investigation and financial ruin?
This dose of reality leads to one truth for automotive industry executives: Have a solid crisis communications plan or face the consequences. Kind of like the "know history or you're doomed to repeat it" axiom. Virtually every large carmaker and automotive supplier has had past crisis communications issues. Some examples:
- Product Recalls
- Labor Strikes
- Plant Fires, Floods and Explosions
- Financial Issues and Bankruptcy
- Employee Deaths, Violence and Shootings
Having these problems is one issue, how you deal with them is quite another. All companies should have public relations representation. At large companies this means internal public relations spokespeople dedicated and trained to handle these incidents. For smaller companies this means enlisting the help of a public relations agency to handle these periodic events.
With the help of a PR agency, you can de-velop a solid, quick response plan for each scenario and avoid the negative ramifications. Here are a few steps to assist companies in setting up a crisis-communications plan:
- Hire a public relations agency
- Identify all possible disaster/emergency situations
- Formulate a reaction plan for each unique situation
- Identify one or two key company spokespeople
- Train each spokesperson on public speaking
- Have press release templates ready to go
- Prepare communications plans for the press, employees and customers
With these initial plans in place, your company can be better prepared for crises when they occur. Overall, here are some lessons that can be learned from the Firestone/Ford crisis:
- Don't blame your customer/supplier, take responsibility and deal with it.
- Have backup sources of parts, don't rely on one source too much.
- Have good PR representation.
- Have a solid crisis communications plan in place, just in case.
- Provide quick, up-front and honest answers through your PR plan.
- Long delays and negative press can kill established name brands.
While the whole notion of minivans might provoke an involuntary eye roll among some people, here’s an interesting fact: so far this year, through the end of March, Chrysler delivered 31,616 Town & Country minivans, which makes it, by far, the biggest selling vehicle in the brand’s showroom.
Last August, Sandor Piszar, Chevrolet Trucks marketing director, noted of the full-size SUV segment, “In the past five years, the average transaction price for the segment has climbed fueled by customer appetite for features like heated and cooled seats, adaptive cruise control and a head-up display.
As Sunday will be the Super Bowl, there will undoubtedly be plenty of automotive commercials before, during and after the game, many of which focus on pickup trucks, because the ad agencies who work for the various OEMs have done deep demographic research that indicates that people who like football like trucks and vice versa. (We’ve always been a fan of the 1998 Nissan Frontier commercial that told us “Dogs like trucks.”) Anyway. . .there is one tough pickup truck that won’t be part of the festival of ads on Sunday because it is for a product that isn’t available in the U.S., the Volkswagen Amarok.