A Tale of 2 Crises: a Side-by-Side Comparison of GM and Toyota's Crisis Communication
In crisis communication, it's exceedingly rare to be able to do a side-by-side comparison of crises. Like the famous Tolstoi quote that each unhappy family is unhappy in its own way, most crises are too idiosyncratic to compare them to other crises in anything but the most general way.
But a paper published recently in Public Relations Review by Roxana Maiorescu of Emerson managed to compare two reputational crises that are uncannily similar.
Facts: recalls at GM and Toyota
In the last decade, both GM and Toyota were faced with major recall actions. Toyota had to recall 5.3 million cars by January 2010 because of a "sticky gas pedal". Despite 93 deaths and warnings to the top management about the problem, the company did not recall any cars until it was forced to do so following a government investigation into the problem. At GM, a faulty ignition switch caused 87 deaths, leading to 74 recalls that involved almost 27 million cars:
"GM’s crisis started in 2005 when complaints from dealers and customers warned the company of stalls. Despite 87 deaths, GM labelled the warnings as a matter of customer convenience that only reached top management in 2014 (Valukas, 2014) when GM initiated major recalls and compensated the victims’ families."
"While at GM the information about the faulty cars did not reach the leadership team, in Toyota’s case investigations pointed to the management’s purposeful avoidance of recalls despite warnings and 93 deaths all of which, in turn, enabled the company to save 100 million dollars. Finally, the company compensated the victims’ families and paid a fine of $48.8 million."
In her paper, Maiorescu compared the crisis strategy and messaging of both companies, as well as the media coverage and the reputational outcome that resulted from the two strategies.