By Alan Graner
Previously http://dsprel.wpengine.com/sometimes-bad-publicity-just-plain-bad-part-1/ we examined how bad publicity trashed the reputations of SeaWorld and BP, proving “there’s no such thing as bad publicity” doesn’t work in the business world. Here are two more examples.
Takata is the world’s second largest provider of air bags for a number of auto manufacturers. In 2013 a series of deaths and injuries were blamed on their defective airbags. The company recalled 3.6 million vehicles. When fatalities continued, Takata was forced to recall 42 million cars—the largest safety recall in history.
Federal prosecutors accused three Takata executives of deliberate deception by selling air bags they knew failed safety tests. Eventually the company plead guilty, paying $1 billion the cover up that lead to death and injuries.
What should have been a manageable recall effort became a public relations disaster in which Takata was perceived as incompetent, uncooperative and willing to place profits before human safety. Whether the company can ever repair its damaged reputation is unknown at this time.
At one time diesel engines were considered more environmentally friendly than internal combustion engines. Recent scientific studies indicate this isn’t necessarily true. Then came the VW scandal.
Volkswagen engineers installed “cheat devices” into their diesel models that detected when the vehicle was being tested and altered performance to temporarily reduce emissions. Once back on the road, the diesel engines emitted pollutants 40 times more than the U.S. allows. The Environmental Protection Agency (EPA) discovered the deception.
When VW CEO Michael Horn testified before a House subcommittee investigating the deception, he swore under oath this was the work of a few devious engineers. The “few” turned out to be 30 managers who deliberately wrote code that fundamentally altered readouts for engine emissions, mileage and power.
Eventually Volkswagen AG pleaded guilty for conspiracy to violate the Clean Air Act and obstruction of justice. To date VW has paid out over $22 billion in settlements, fines and litigation in the U.S.
As a result, VW won’t offer diesel models in the U.S. in 2017 and may not sell them in the future. Meanwhile, about half of current owners are selling their diesel cars back to VW.
What examples would you add?
Alan Graner is Chief Creative Officer at Daly-Swartz Public Relations, an Orange County, CA business public relations and marketing content firm. For content that makes you stand out from the crowd, email Jeffrey Swartz at firstname.lastname@example.org. Or visit www.dsprel.com.