< Better Safe and Sorry

Transcript

Friday, February 12, 2010

BROOKE GLADSTONE: [LAUGHS] The air is rife with apology.

[MUSIC UP AND UNDER]

TOYOTA SPOKESMAN: For over 50 years, providing you with safe, reliable, high-quality vehicles has been our first priority.

BROOKE GLADSTONE: Toyota is mending fences just as fast as it can.

TOYOTA SPOKESMAN: In recent days our company hasn't been living up to the standards that you've come to expect from us or that we expect from ourselves.

BROOKE GLADSTONE: And, not a moment too soon. According to a study released this week by Kelley Blue Book, which assesses car values and prices for buyers and sellers, more than 27 percent of those who were considering a Toyota prior to the recall now say they no longer are, and the Toyota brand has dropped to third place, behind Ford and Chevrolet. How humiliating!

[AKIO TOYODA SPEAKING IN JAPANESE]

INTERPRETER FOR AKIO TOYODA: I apologize for the great inconvenience and concerns of our customers due to recalls from multiple models in the multiple regions.

AKIO TOYODA: Believe me, Toyota’s car is safety and but we are try to increase our product better.

BROOKE GLADSTONE: Toyota President Akio Toyoda, less than a year into the job, was supposed to carry the company into the future, a challenging task because of the clash of cultures. Not just the clash between America and Japan, though that’s a big one, there’s also the clash between corporate and consumer culture. And in the history of corporate/consumer relations, one recall stands alone as the gold standard, the unreachable star, the apotheosis of right thinking in the face of Armageddon, the great Tylenol recall of 1982.

MALE CORRESPONDENT: Seven people died this week in Chicago after taking Extra Strength Tylenol capsules that had been laced with cyanide. By week’s end, all Tylenol products were taken off the market in Chicago.

BROOKE GLADSTONE: Gene Grabowski is the senior vice president of Levick Strategic Communications, which has offered PR advice to beleaguered entities, ranging from spinach growers to the Vatican. He says Johnson & Johnson had a number of factors in its favor during the Tylenol recall. Its management had already worked out a crisis strategy plan, it had a charismatic CEO in James E. Burke and its problem was caused by a homicidal manic, not bad business practice. Tylenol in 1982 was the most successful over-the-counter product in America.

GENE GRABOWSKI: It could have very easily been destroyed in a couple of months. When you think back on the, the Tylenol recall, that was a leap of faith, but they took it. And the reason they took it was they thought like their customer. What would they expect of a company?

BROOKE GLADSTONE: Well, specifically they could expect Johnson & Johnson to swiftly pull the product off the shelves, explain the problem, accept responsibility, hold press conferences, go on 60 Minutes, set up a consumer hotline and, most important, invent tamper-proof caps. But generally, consumers should expect companies to take:

GENE GRABOWSKI: Four steps, basically: Identify what the problem is, apologize. Then very quickly describe what is you’re going to do to make sure this doesn’t happen again, and then do it. Follow through on your promise.

BROOKE GLADSTONE: So, if Johnson & Johnson set the template in 1982 which, by the way, the U.S. Defense Department now uses as a case study in crisis communication strategy, why didn't it catch on? Why has no other company, even Johnson & Johnson, in later recalls, pulled it off so well?

GENE GRABOWSKI: It’s not so much that the example didn't catch on. It’s that the delivery of those messages and having the, the corporate courage to do so has always been in short supply. When a crisis hits, typically what happens is corporate executives at the top huddle together and worry about the stock price, worry about their image, worry about production, worry about profits and losses. And the one thing they should be focused on is what is that mother of three thinking about my product right now. It’s so simple that almost nobody will accept it.

JIM LENTZ: Hi, I'm Jim Lentz, President of Toyota Motor Sales, USA. And I want to let you know that we've developed a comprehensive plan to fix the sticking pedal situation in recalled Toyota vehicles.

[VOICE TRAILS ON/UP AND UNDER]

BROOKE GLADSTONE: Lentz issued this apology on February 1st, weeks after the current recall crisis exploded and years after Toyota fended off mounting safety concerns with reflexive opacity and denial, all of which reflects that other cultural clash, the one between the U.S. and Japan.

JIM LENTZ: Thank you for your patience and understanding.

BROOKE GLADSTONE: The New York Times recently drew attention to the exaltation in some precincts of American business that the star car company, the star pupil, so to speak, had been laid low by hubris. It was the joy in another’s misfortune, called Schadenfreude.

ROLAND KELTS: Well, that’s the operative word, and not just in the American media response but also the, the administration’s response, and particularly Ray LaHood.

BROOKE GLADSTONE: Roland Kelts, author of Japanamerica: How Japanese Pop Culture Has Invaded the U.S., is referring to Transportation Secretary Ray LaHood’s suggestion, since withdrawn, that Toyota owners stop driving their cars.

ROLAND KELTS: You know, for anyone over what, 25, 30 in Japan, memories of the Japan-bashing in the 1980s are very stark, very painful, where, you know, you literally saw the United States – and many people forget this [LAUGHS] – politicians and auto workers smashing Toyotas and Nissans on American television with sledgehammers to protest what they felt were unfair export policies. Now in Japan, the memory of that is that we learned to play the game by American rules, we learned to participate in this capitalist economy, and we succeeded and then we got smashed for it. So there’s a great wound, a great bruise, at the very least, in the Japanese psyche over those Japan-bashing days.

BROOKE GLADSTONE: On the other hand, Kelts says that once Japan learns a lesson, it stays learned. He says that Akio Toyada’s recent activities – sending an Op-Ed to The Washington Post, speaking directly to American consumers, phoning Ray LaHood – are revolutionary in the context of corporate Japan. In fact, one day Japan may outperform America in dealing with corporate crises because if you consider that the 1982 Tylenol recall was the moon landing of corporate/consumer relations, America planted the flag but it hasn't been back there, since.

[MUSIC/MUSIC UP AND UNDER]