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Toyota Recall Crisis


The Breakdown of Toyotas Dilemma

Dana Bowes
April 12, 2016
BUS 313

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Table of Contents
Executive Summary. 3
Introduction.. 4
Methodology 5
Results and Discussion 6-9
Conclusion.. 10
References.. 11

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Executive Summary
In late 2009, Americas largest automobile company, Toyota found themselves in a crisis.
Toyota vehicles lacked quality in their vehicles, triggering one of the largest official calls of
their cars in the world. Toyota was forced to recall over 8 million vehicles worldwide to address
the issues of unintended acceleration. In addition, the company suspended the production of its
most popular models, resulting in an estimated loss of $5 billion. This crisis threatened the
companies reputation of quality cars, as well as the brand image built up over time. This essay
aims to elaborate on the Toyota crisis, with focus on the three phases of a crisis: denial,
minimizing effects, and resolution.

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Introduction
Background
Tragedy struck California when a Lexus sedan involuntarily began to accelerate, killing
four people. This calamity was just one example of Toyota product failures that started the recall
of multiple Toyota models. The initial 3.8 million recalled vehicles in 2009 included models such
as Camry, Avalon, and the Prius. In the years of 2009 and 2010, Toyota recalled another
estimated 4.4 million vehicles. (Woodyard, 2010)
Toyota built a world-class corporate brand reputation based on its commitment to quality,
reliability, continuous improvement, excellent design, and customer focus. This reputation was
put at risk in September of 2009 when the release of a 911 recorded phone call illustrated that the
driver had no breaks and could not slow the vehicle down. Later the cause of the incidence teas
determined to be an accidental and uncontrollable acceleration.
Objectives
Specifically, research objectives included investigating the following:
How the media reported and influenced perceptions about the crisis
How Toyota responded to the crisis
How scandals involving automakers affected
Purpose
This white paper presents the findings from analyzing the crisis event and the communication
surrounding it.

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Methodology
To explore the way Toyota responded to the crisis caused by the faulty accelerators, I
conducted an textual analysis that focuses on the phases of a crisis an organized experiences. All
communication and numerical data was gathered from popular digital sources and includes
excerpts from articles and case studies about the crisis found in media news sources, as well as
samples from public comments from readers.
The data was organized according to three phases of crisis communication as described
by the following articles: Auto recall crisis, framing, and ethical response: Toyotas missteps
by Shannon A. Bowen, and Yue Zheng. How Did Toyota Stay on Top Revisiting Crisis
Communication Discourse by Rachel Marie Knoesple and The Toyota Recall Crisis: Media
Impact on Toyotas corporate Brand Reputation by David Fan, David Geddes, Felix Flory.
Phase 1 Denial
Phase 2: Minimize effects
Phase 3: Resolution
*All data was coded inductively using Grounding Theory methodology

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Results and Discussion


August 2009 - January 2010
Phase 1: Denial
-The organization attempts to remove any connection between the organization and the crisis by
claiming that there is no crisis and offers a simple denial that it did not perform the act in
question.

During the Toyota recall Toyota executives initially reacted by denying possible problems
with their product, as well as failing to investigate potential causes that may have resulted in the
accidental acceleration. (Smudde, 2010) Toyota continuously denied the possibility of
mechanical or electronic problems that could have caused the pedals to stick inside their
vehicles. After the first few reports of Toyota vehicles accelerating out of control causing injuries
and fatalities, Toyota issued a statement inferring that the floor mats inside the vehicles may be
the cause of the uncontrollable acceleration. For example, on December 5, 2009, Toyota writes a
letter to the The NewYork Times reiterating its stance that the floor mats were the root cause of
most unintended acceleration claims. At this point, I think it is important to note a specific word
most. Including the word most gives the company leeway incase they later discover fault.
That specific word also includes the denial that the acceleration is not the fault of the automobile
itself, just the design of simple floor mats. The statement also assumes that the cause of the
malfunction was related to an external factor, rather than an internal factor such as the engine or
internal computer; essentially denying full responsibility.
Fortunately this phase came in an end, it was not until the end of January that Toyota
accepted responsibility. The company's executive is quoted claiming the issue is rare, but

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could result in a worn gas pedal being difficult to depress, slow to spring back, or getting struck
partly depressed.: (CNN, 2010)
Phase 2: Minimize Effects
-The organization attempts to minimize perceived damage caused by the crisis and reinforce the
good traits of the organization by creating a more complete context with which the organization
should be evaluated.

Once an organization leaves the denial phase, it then becomes time to minimize the
damage the crisis may cause to the organizations reputation, brand imagine, and finances.
During this phase of a crisis an organization typically hires a personal relations representative
(PR). Public relations is defined as the practice of managing communication between an
organization and the public. The PRs job is to effectively implement different kinds of response
strategies that seek to recover any damage to public image and assure any stakeholders and
potential future customers that the recovery is on-going. (Huang, 2004).
Toyota used the minimization strategy to minimize the seriousness of the sticking
accelerator pedal crisis. Toyota made the claim that the issue of unintended acceleration has been
a part of the auto industry for decades. To some this may give off the impression that there is
nothing an automaker can do in cases of unintended acceleration, since it can happen to
everyone, and it is united throughout the auto industry.
In addition, Toyota reminded its public of how long it has been producing reliable
vehicles and argued that this one mistake should not affect the way consumer view Toyota after
the recall. In effort to further minimize the affects of their brand name, Toyota reminded the
public that they have constantly provided consumers with safe and reliable vehicles for over two

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generations. Toyota resting on their previous reputation to help minimize the effects of their
current mistake.
Phase 3: Resolution
-The organization takes responsibility for the crisis and implant steps to solve the problem and
prevent a repeat of the crisis by taking corrective actions
The Toyota company apologized for the injuries and fatalities caused be their defective
gas pedal. In addition to this apology, the resolution to the crisis was recalling all of the affected
vehicles. (Bunkley, 2010) Toyota recalled millions of their vehicles in hopes of salvaging what
was left of their reputation. Towards the end of the crisis, Toyota paid over $1.2 billion in fines
for the unintended acceleration. Ultimately the resolution was Toyota eventually admitting to the
its mistake and being forced to stop production and fix all of the issues the vehicles that have
already been sold.
Toyotas brand imagine was damaged, as was the consumer trust. However, the
organization has been able to regain some of that image and trust back. It is important to
understand that it will take years for an organization to full recover from any product crisis.
Toyota lost an estimated $54 million a day while production was stopped due to the recall. In
addition lost income, Toyota was forced to pay a large sum of money in fines and even more in
legal fees! Scholars have estimated that it will take Toyota a few years to be in the same
respectable and trustworthy position it was prior to the recall.

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**NADAs table of public opinion


The purpose of this table is to provide a visual representation of how the consumers felt during
the Toyota recall crisis.

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Conclusion
In conclusion, Toyota and many other organizations deny responsibility during a crisis.
However, it seems that Toyota held onto the denial phase longer than it should have. It seems
that Toyota wanted to avoid any responsibility and wanted to deny that it was an actual defect of
a Toyota product. After Toyota admitted to a fault, the organization relied heavily on their
previous brand imagine of providing quality vehicles for generations.
Organizations experience crisis and each organization handles them differently. Toyota
eventually did the correct thing by their consumers and recalled the effected vehicles and halted
production of the vehicles that were being produced with faulty pedals. It will take time for
Toyota to bounce back, but it is possible for the organization to regain its brand image and
consumer trust.

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References
Bunkley, N. (2010a). 1.1 Million Toyotas recalled to correct engine problems. In The New York
Times. [August 27]
Bunkley, N. (2010b). Toyota estimates it lost 20000 sales in last week. In The New York Times.
[February 3].
Bunkley, N. (2010c). Toyota to pay $32.4 million in fines related to two recalls. In The New
York Times. [December 21].
Carty, S. S. (2010). Toyota issues recall No. 7: 03 Sequoia; No injuries or accidents reported,
but 163 complaints. In USA Today. [April 29].
Carty, S. S., & Healey, J. R. (2010). Toyota recalls millions more; Another accelerator issue hits
carmaker. In USA Today. [January 22].
Coombs, W. T., & Holladay, S. J. (2012a). The paracrisis: The challenges created by publicly
managing crisis prevention. Public Relations Review, 38(3),408415.
Smudde, P. (2001), Issue or crisis: A rose by any other name, Public Relations Quarterly,
Winter 2001, Vol.46, No.4, pp.34-36.

Woodyard, C. (2009). Sliding floor mats lead to Toyotas biggest recall; 3.8 million vehicles
affected after possible link to deaths. In USA Today. [September
30].
Woodyard, C. (2010). Luxury Lexus LS next for recall; Quality issues continue as Toyota brand
has steering problem. In USA Today. [May 20].

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