What started as an embarrassing problem with floor mats and a theory that they were causing gas pedals to get stuck has led Toyota to initiate a worldwide recall of close to 10 million vehicles while simultaneously trying to salvage its reputation for quality, reliability, and safety. The ordeal has shifted into full-on crisis mode of late: The once invulnerable Prius has been affected, the top-selling Corolla sedan is being investigated for steering problems, and Akio Toyoda, the company’s embattled president and grandson of its founder, is dodging Congress’ desire to have him testify in person about the Great Recall.
Networking
Toyota never had much of a chance of controlling this story. But what’s been truly disruptive about the recall controversy is that it happened in the new era of social media. Boilerplate crisis-management stipulates that the company execute a variety of strategies, ranging from laying low and handling the recall problems piecemeal, anticipating that public interest would wane, to offering a public mea culpa, which Toyota’s president did on Feb. 9 in the Washington Post. (A resignation could still be in the offing.)
None of this, though, can contend with the breakneck, crowdsourced, unmediated reputation-wrecker that is the 140 characters of a tweet. As the recall story exploded last week and I pondered the collapse of the vaunted Toyota Way, I checked the #Toyota Twitter tag frequently. The tweet-rate was blistering: Dozens of new tweets every 30 seconds. Give it half an hour and you had a thousand more. Even the most hardened PR warrior would have looked at that and wet his pants.
Of course, it’s not as if Toyota hadn’t issued recalls before. Prior to what Autoblog has been calling “Throttlegate,” the company brought back almost 100,000 cars to fix a braking problem in 2009. More than 100,000 pickups were also recalled last year. In 2006, Toyota faced assorted recalls affecting almost 800,000 cars and trucks.
Recalls are a fact of life in the auto industry; you can fill a Saturday afternoon wandering down recall’s memory lane by Googling recalled makes, models, and years. Sometimes these are a big deal, and sometimes they aren’t. Sometimes owners forget about a minor-issue recall and never even bring their car back to the dealership to get it fixed. There are even cases in which recalls aren’t legally necessary—such as when the NHTSA investigates a problem and decides to take no action—but the automaker initiates a recall anyway.
Recalls can dent a carmaker’s reputation, but the damage is rarely permanent. Unless, that is, they ascend to a grim pantheon of memorable recalls. These are the true killers, the engineering and PR screwups from which it can take years to recover. Tragically, they are usually associated with needless death and mayhem. In the worst cases, they reveal car companies to have engaged in a callous disregard for human life and a malevolent quest for profits.
No one remembers the Ford Pinto as an innovative effort in the 1970s gas-crisis era to create an inexpensive, fuel-efficient small car. Everyone remembers it as shorthand for “rinkydink sh**box that explodes into flames when struck from the rear.” If they’re well-informed about just how bad the Pinto debacle was, they remember the infamous “Pinto Memo,” in which Ford executives weighed the cost of redesigning what they knew was a problematic gas tank against the expenses they’d incur from death- and injury-related lawsuits. The math said that the fix would cost $121 million, while the inevitable human broilings would only set Ford back $50 million. In a Mother Jones exposé from 1977, a Ford engineer revealed that having enough trunk space for two sets of golf clubs was more important than preventing a human barbecue.
the Audi example
It was a despicable calculus that in the end cost Ford far more than $121 million. It still costs the company, even though the fiery deathmobile has been gone for decades. And while the Pinto might be the car that drives the modern recall movement, with carmakers almost more willing to bring cars back than run the risk of trashing their precarious brands, there have been others. In the 1980s, Audi, then a second-tier German luxury automaker with a gimmick that would later become commonplace—all-wheel-drive—witnessed its efforts to compete with Mercedes and BMW laid low by an unintended-acceleration problem that would presage Toyota’s woes. It crushed sales. Audi spent two decades restoring its brand integrity.
Carmakers handle brand-Armageddon in widely different ways. General Motors combated its Corvair disaster of the 1960s essentially by pulling political strings and ... well, by being General Motors and outlasting the negative press. Still, the Corvair debacle gave us the modern era of consumer advocacy, through Ralph Nader, who attacked the car in his 1965 book Unsafe at Any Speed.
And the modern era of consumer advocacy set the stage for the social-media feeding frenzy that has been the Great Toyota Recall of 2009. This isn’t (yet) the largest recall ever; Ford holds that sad distinction for a problem with cruise control in 1999 that brought 14 million vehicles back. Nor is it the most stunning in terms of what you might call bad karma; that distinction also belongs to Ford, which endured a tragic rollover problem with its bestselling Explorer SUV in the early 1990s. That recall led to an acrimonious severing of Ford’s long relationship with tire supplier Firestone and decisively connected the concepts of “rollover” and “SUV” in the public consciousness.
But that all happened a decade before Twitter. Think about it: Prior to the advent of rapidly updated social media, bad news about cars seeped out at the local level. A pattern of accidents here. A sudden uptick in complaints to dealerships there. Like pre-9/11 intel—and, well, like post-9/11 intel—it was difficult to connect the dots. Sufficient evidence to warrant even a NHTSA investigation could take years to organize. Deadly cars could remain on the road for far too long, as an automaker sought to control the damage before the recall news broke nationally.
No more. Anyone with access to the Internet is now a micro-Nader, an antlike information-gathering-and-broadcasting agent who can contribute his experiences and interpretations to the data stream. This is why the Toyota recall has achieved brushfire velocity and stunned a company that, just two months ago, was literally on top of the world, with the most loyal customer base arguably ever assembled by a carmaker. With the monster recalls of the past, it was as if a manufacturer had been hit by a heavyweight punch. Reeling was followed by a determination to fight on, unless the company was knocked out (as Audi almost was). For Toyota in 2009, it was very, very different. This time, it wasn’t the big blow. It was death by a million tweets.