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Airbag Recall Becoming a Reputation Killer

Japanese auto parts maker, Takata, has been under fire since June, when 900,000 vehicles from nine automakers were recalled in “high humidity” areas – Florida, Hawaii, Puerto Rico and the Virgin Islands. The recall then expanded to 2.4 million vehicles shortly after. The National Highway Traffic Safety Administration (NHTSA), a U.S. government agency that focuses on saving lives, preventing injuries and reducing vehicle-related crashes, then reported on Oct. 20, that 4.7 million vehicles have been affected, but two days later stated the report was inaccurate, and 7.8 million vehicles were recalled. They also stated that threats “may be greater than previously identified.”

NHTSA claims it is in aggressive pursuit to track down all vehicles with defective airbags, but that is difficult to comprehend as the number of vehicles keeps growing; false report after false report. Florida Senator Bill Nelson said, “I have no patience for federal regulators not being entirely up front, forward-leaning and aggressive to stop these defective products.”

How well did the NHTSA respond to and handle this issue of adversity?

Unfortunately, the NHTSA would receive a poor grade for its handling of the recall. At Fallston Group, one of our key “don’ts” when responding to crisis is to never release inaccurate information; this will lead to a crippled reputation, and loss of trust from your stakeholders.

Takata controls over 30 percent of the international market and says it is cooperating fully with the NHSTA. The problem is, this recall will take years to complete, says senior analyst at Kelley Blue Book’s KBB.com, Karl Brauer. KBB.com’s Executive Director Jack Nerad also said that consumers who were affected by the airbag recall will be forced to wait for dealerships to receive replacement parts, and installers to receive proper training before repairs can be made.

The Bottom Line

All in all, every party involved in the recall poorly communicated the issue to the public; releasing inaccurate information and conflicting advice to consumers. Total vehicle recall has increased by almost nine times since June, and the public is still unsure if the current number of 7.8 million recalled vehicles will stick.

Proper communication and trust needs to be established immediately in any controversy to assure stakeholders and the general public that your company will respond effectively and recover. If one good thing can come from a recall of this magnitude, hopefully it’s that the issue, now front and center, will prevent consumers from ignoring the problem, and ultimately prevent further injury.

For more information about crisis management, do not hesitate to contact Fallston Group at 410.420.2001 or by email at info@fallstongroup.com.

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