HOW TOYOTA FACED THEIR CRISIS, ACCORDING TO CRISIS COMMUNICATION THEORIES?

by:Veronica Sri Utami

(Tulisan ini dibuat untuk: Corporate Communication Mid Term Paper – Paramadina Gradschool)

Summary:

This article will review the crisis faced by Toyota Company, related with recalling several type of their car. From this analysis we know that Toyota Motor Corp trying extra hard to maintain their reputation and image to their consumer and any stake holder.

They use several strategy of crisis communication, such as give true information, one voice, apology. They also do not mind to suffer financially, with call their consumer for free services. It is all for maintaining their reputation.

Introduction:

Crisis is something that mostly happened   to every company, with different level of damaged. Not just happened in unstable small company, crises can also happened in a big, well known company,  with a good reputation, such as Toyota Motor Corp.

Toyota Motor Corp is one of the biggest automotive company in the world. According to Fortune Magazine, from 1997 – 2007, Toyota Motor Corp lies in second position, after General Motor in their 25th annual list of America’s Most Admired Company. [1]

But, at 2009, the problem occurred. From the data, the problem started at January 2009, when Toyota Motor Corp (TMC) officially recalls for 1,3 million Yaris unit in the world. They said, the problem was lies in mechanism at seat belt that can produce fire when accident happened. [2]

Then, at August 2009, again, Toyota recalls for 690.000 passenger car in China.  They said the problem was automatic system on their power window. [3]

This is not the end, because at September 2009, TMC also recalls 3,8 million car at United State, because of the carpet not placed accurately, that interfere gas pedal, that can cause an accident. [4] This recalls continue to Europe and all over the world until this time.

Recently, they also recall their hybrid products: Prius, Prius Plug in, Sei, and Lexus HS 250h, in Japan because of brake problems.

Crisis affected the company

According to Fern and Banks, crisis is something worst than a problem[5], because crisis risk the reputation, remove people trust, and also caused economical suffering. It is also happen with Toyota.

Problems that occured related with the safety of people who used these car, it means Toyota consumer.  So Problem with their seat belt, power window, and gas pedal, can eliminate people trust to Toyota quality.

This crisis also affected Toyota economically. According to Chief Executive of Toyota’s European Division, Tadashi Arashima, sales at the beginning of 2010  in the United States and Europe has decreased, compare with sales rate a year before. This crisis also make several people become jobless, because Toyota Motor Corp stopping their production for a while.

And, the bad news is, not only the Toyota Company, Japan also felt the adverse effect of Toyota recall. One of the symptoms is that yen exchange rate decline against foreign currencies. [6]

Apologia theory – redefinition strategy

When Toyota Motor Corp decided to recall all the product that suspected have a problems,  the company confess that they did something in a wrong way.  So, they have to defend their reputation as well as protecting their image.[7] (Fern and Bank,  2007, p.51).

First, they used redefinition strategy. They tell us that this problems occurs not because they intend to do that. When Toyota say that they only recall product that was manufactured with collaboration with Guangzhou Automobile Group (Kompas.com/toyota recall 690.000 kendaraan di China), they send implicitly, that problems that happened with power window system not only their mistakes. Another company had responsibility for this situation.

Apologia theory – concilitation

But, finally, Toyota Motor Corp using actual apology (conciliation). It happened when President of Toyota Motor Corp, Akio Toyoda gave testimony in front of the United State Congress hearing on February, 2010.

He said sorry to the congress and all American citizens, about accident that related with Toyota recall for more than 8 million car in United States. He said, “we will never run away from responsibility and leave this issue for granted.” [8]

Although Maryann Keller, president of Maryann Keller & Associates in Stamford Connecticut said “Toyoda cannot fix anything. The only things he can do is saying that his enterprise was making mistakes.” [9], but I believe that apologize is a big thing that can protecting their corporate reputation and image.

And the good thing is, whatever the reason, whoever they thing as a source of the problem, I see that Toyota Motor Corp take a big responsibility for this crisis. Their willingness to recall all product with problems is the evidence. We all know, that recall means that all the owner of the product can get services and spare part replacement without any charges at all Toyota’s dealer. We can be sure that this reaction will cost Toyota a lot. They estimate that from January 2010 until February, they suffer a financial loss for about 31 milyar dolar.[10] But, Toyota do it.

Tell the truth

Announcing that their product had a several problems (seat belt, power window, gas pedal, and even the carpet), also means that they try to spread the information openly  and truthfully.

They spread the information through media, letter, website, and of course through every Toyota’s person at their dealer. Not just the information about the recall, but how they can drive safely, if their car not yet been serviced.

We can imagine, if they don’t give this information, maybe a lot more people will become victims because of this problems. Eventhough the problems is just about the carpet, for example, they give the information clearly.

Although a lot of people say that it’s too late for Toyota to response the problems on their car that had been reported before, but I think we still have to appreciate what Toyota have done until now.

One voice

There are several people that have right to inform any kind of data or information from Toyota Motor Corp to the public. But, mainly, the President of Toyota Motor Corp, Akio Toyoda, conduct the responsibility to be the true representative of Toyota Company.

According to Fern-Bank, CEO is the appropriate person to be the spoke person for the company during crisis, since he have the authority to make a decision and, certainly, have a credibility to represent his company.[11]

He take the great responsibility to maintain his corporate reputation, with facing the American congress. As we know, United States is the heart of the world. So, I think, facing the congress is the best strategy, because, if Toyoda can convince the united States congress, we can believe that it also means Toyoda already facing and convince the world that Toyota company already do the right things to do to fix all the problems.

And to gathering back the trust from consumer, it is understandable if he said several time, that he fell sorry about the problems, about the confusing situation, and  promise that Toyota will handling customer complain ad review company operation better next time.

Our motto still “Customer First”, said Toyoda.[12]

Conclusion

Because crisis can be happened to every company, anytime, so every company should be prepared for this situation, with a good plan, and of course with a good action, to protect the company reputation.

From the analysis above, we know that Toyota Motor Corp using several kind of strategy. All purpose is to cope the crisis.

Of course, it is good crisis strategy, although we do not know yet, if their strategy will gathering back their reputation and  consumer loyalty.

APENDIX

http://www.antara.co.id

http://otomotif.kompas.com/read/2009/01/30/toyota.recall.13.juta.unit.yaris.termasuk.indonesiakah

http://otomotif.kompas.com/read/xml/2009/08/24/toyota.recall.690.000.kendaraan.di.china

http://otomotif.kompas.com/read/xml/2009/09/30/13294094/toyota.recall.38.juta.unit

http://otomotif.kompas.com/read/xml/2010/02/25/presiden.toyota.motor.corp.akio.toyoda.minta.maaf

http://otomotif.kompas.com/read/xml/2010/02/25/18430759/dukungan.mengalir.buat.toyoda.)

http://otomotif.kompas.com/read/2010/02/18/akio.toyoda.semangat.kami.tetap.customer.first

Fern – Bank, (2007) Crisis Communication: A Casebook approach

http://www.wartaekonomi.com/


[1] http://www.antara.co.id/view/?i=1173781799&c=EKB&s

[2] http://otomotif.kompas.com/read/2009/01/30/toyota.recall.13.juta.unit.yaris.termasuk.indonesiakah

[3] http://otomotif.kompas.com/read/xml/2009/08/24/toyota.recall.690.000.kendaraan.di.china

[4] http://otomotif.kompas.com/read/xml/2009/09/30/13294094/toyota.recall.38.juta.unit.

[5] Fern – Bank, (2007) Crisis Communication: A Casebook approach (p.8)

[6] http://www.wartaekonomi.com/index.php?option=com_content&view=article&id=4282:recall-besar-besaran-toyota-pengaruhi-perekonomian-jepang

[7] Fern – Bank, (2007) Crisis Communication: A Casebook approach (p.51)

[8] http://otomotif.kompas.com/read/xml/2010/02/25/presiden.toyota.motor.corp.akio.toyoda.minta.maaf

[9] http://otomotif.kompas.com/read/xml/2010/02/25/18430759/dukungan.mengalir.buat.toyoda.)

[10] http://otomotif.kompas.com/read/2010/02/18/akio.toyoda.semangat.kami.tetap.customer.first

[11] Fern – Bank, (2007) Crisis Communication: A Casebook approach (p.25)

[12] http://otomotif.kompas.com/read/2010/02/18/akio.toyoda.semangat.kami.tetap.customer.first