Thursday, April 8, 2010

No Good Deed Goes Unpunished

In January, Toyota’s senior U.S. public relations executive tried to warn the company’s leadership to go public and take responsibility for the faulty accelerators on some of its cars.

Five days after Irv Miller hit send on his memo, about the time it would take to mount a recall strategy, Toyota announced the recall of 2.3 million vehicles in the U.S. Now, his memo may be the straw that broke the company’s legal back.

Earlier this week, days before this memo was leaked to the Detroit Free Press newspaper, Federal safety officials fined Toyota $16.4-million, making it the largest U.S. vehicle defect fine so far.

By the way Miller has since “retired” from Toyota.

The memo will most likely be used as a hammer against the company by plaintiff’s attorneys who have filed several class action lawsuits against Toyota, and will be more evidence for U.S. safety administrators to use against Toyota in additional enforcement actions. A spokesman for the National Highway Traffic Safety Administration (NHTSA) says Toyota was aware of the sticky gas pedals last September and alerted dealers in Europe and Canada four months before telling U. S. safety officials and customers.

Miller wrote in his memo, “We are not protecting our customers by keeping this quiet. The time to hide on this one is over.” PR folks often function as the conscious of an organization and it takes wisdom, experience and the respect of peers and management to be effective at it. It’s a shame the company did not get that message months earlier and act on it.

ANOTHER LESSON:

There’s another lesson in Irv Miller’s memo. He should have made his appeal in person or on the phone or in a video conference, but NOT in a written memo – on paper or e-mail. All written and digital documents are discoverable in subsequent legal actions and Miller’s memo, no matter how well intentioned, may cost the company a great deal.

1 comment:

  1. The incident really gives the car company a big head bang. The amount wasted is very high that many counts for the Toyota's downfall but I've read an article a week ago that says the project management consultancy services of the company is planning to make up something that at least make their crisis lay low.

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