Lecturer: Mr. Arnold Paalam
Crisis Communications Case Studies
Ford Motor Company
During the late 1980s into the 1990s, Ford Explorers equipped with Firestone Wilderness tires were linked to nearly 150 deaths and more than 500 injuries in the United States alone. Concerned about the company’s bottom line and its reputation, Ford Motor Company employed what might be called an “ignore it and it will go away” approach to crisis communications.
The lack of a cohesive crisis communications strategy, paired with poor management decisions, resulted in a stock price drop of $11.78 per share. Even greater was the damage to the company’s reputation. Today, the Ford/Firestone debacle is considered by many to be a textbook example of what not to do when facing a crisis.
So what did Ford do wrong?
• They didn’t put customer safety and needs first.
– They covered up the safety defects for more than 10 years.
– They didn’t immediately recall the product once it started to fail.
• They had no crisis communications plan in place.
– And even when the situation continued drawing national and international attention, they held off on any formal plan.
• They were reactive, not proactive.
– Once committed to a recall, they were slow in approaching the public and media.
– They ignored a corrective engineering proposal to enhance the stability of the Explorer, cited among the worst vehicles for rollovers.
• They weren’t a resource for information on the situation.
– Ford CEO Jacques Nassar didn’t attend early House subcommittee hearings on the issue.
– They didn’t hold regular press briefings or press conferences.
– They didn’t provide a way, place or site for consumers to find the latest information on the tires, the Explorers or the situation.
– Consumers were left in the dark about how the company was going to fix the problem.
• They pointed fingers, rather than take responsibility.
– Ford Motor Company repeatedly blamed Firestone tires, in spite of the fact that crash statistics showed that the Explorer had a higher incidence of tire-related accidents than other sport-utility vehicles, no matter the brand of tire.
– Ford released documents showing that Firestone had received a disproportionate amount of complaints about the Wilderness series since 1997.
– Rather than focusing on fixing the problem, they tried to pass the buck.
Tylenol
In 1982, Johnson & Johnson (J&J) faced a major crisis that had the potential to send the company into financial ruin. Tylenol, the country’s most successful over-the-counter product, with over one hundred million users, was under attack.
Sealed bottles were tampered with and extra-strength Tylenol capsules were replaced with cyanide-laced capsules. These bottles were then resealed and placed on shelves of pharmacies in the Chicago area. Seven people died as a result. Tylenol was called upon to explain why its product was killing people.
The company first learned of the deaths from a local news reporter. A medical examiner had just given a press conference saying people were dying from poisoned Tylenol. Tylenol had to act fast.
What did Tylenol do right?
• J&J put customer safety first.
– Company Chairman James Burke immediately formed a seven-member strategy team with the goal of determining how best to protect people, and then, how to save the product. Their first action was to alert consumers nationwide.
– They pulled all advertising and immediately stopped production of the product.
– After finding two more contaminated bottles, the company ordered a national withdrawal of every capsule. (This showed that no matter the cost to the company, customer safety was priority number one.)
• They were candid. J&J used both public relations and advertising to communicate their strategy, keeping customers informed and in the loop.
– They issued a national alert telling the public not to use the product.
– They set up a 1-800 phone line so people could call in with questions and concerns.
– They established a toll-free line for news outlets. This line also included taped daily updates.
– They held press conferences at corporate headquarters and set up a live television videofeed via satellite to New York.
– The chairman went on “60 Minutes” and the “Donahue” show to share the company’s strategy.
• They offered answers.
– J&J presented an industry first — triple-safety-seal packing that included a glued outer box, a plastic seal over the bottle’s neck, and a foil seal over the bottle’s mouth. Tylenol released the tamper-resistant packaging just six months after the crisis occurred.
Summary
Both of these cases bring to light the need for a well-thought out strategy in crisis situations. Today, Tylenol has regained its place in the marketplace and is considered one of the most trusted products in America. Ford continues to struggle with its reputation.
How do these cases relate to the tourism industry?
If we look at the work done by the 2003 Public Relations Task Force (Glacier Country, the Whitefish, Flathead and Missoula CVBs, Glacier National Park) during the wildfires of 2003, you’ll see many correlations between Johnson & Johnson’s strategy and ours.
• We immediately established a crisis task force.
• We put visitors and local businesses first.
• We were candid with reporters and tourists about the situation.
• We opened the Glacier Country Information Center 24 hours a day to answer traveler questions and concerns and provide alternate travel and recreation options.
• We provided daily updates on the situation to media, businesses and tourists.
• We employed both advertising and public relations tactics to tell our story.
• We set up media interviews and media tours.
Glacier Country finished the year 2003 with above-average numbers. While properties and recreational outfitters in Glacier National Park suffered economic losses, those losses did not spread into the rest of the Flathead Valley. Some figures:
• July occupancy: 88 percent compared to 79 percent in 2002.
• August occupancy: 84 percent compared to 78 percent in 2002.
• September occupancy: 67 percent compared to 64 percent in 2002.
• Glacier Park International Airport reported a record August — up more than seven percent. September’s arrivals matched 2002.
• Missoula’s occupancy also kept pace with the previous year.
While our occupancy percentages showed an increase, the average room rate may not reflect such dramatic growth. That’s because an estimated 10 percent of our overall occupancy was the result of fire crews and governmental employees who paid the lower government rates. We were, however, able to maintain. We didn’t lose ground. We proved that an effective crisis communications plan can work.
Sources:
Ford Motor Company
During the late 1980s into the 1990s, Ford Explorers equipped with Firestone Wilderness tires were linked to nearly 150 deaths and more than 500 injuries in the United States alone. Concerned about the company’s bottom line and its reputation, Ford Motor Company employed what might be called an “ignore it and it will go away” approach to crisis communications.
The lack of a cohesive crisis communications strategy, paired with poor management decisions, resulted in a stock price drop of $11.78 per share. Even greater was the damage to the company’s reputation. Today, the Ford/Firestone debacle is considered by many to be a textbook example of what not to do when facing a crisis.
So what did Ford do wrong?
• They didn’t put customer safety and needs first.
– They covered up the safety defects for more than 10 years.
– They didn’t immediately recall the product once it started to fail.
• They had no crisis communications plan in place.
– And even when the situation continued drawing national and international attention, they held off on any formal plan.
• They were reactive, not proactive.
– Once committed to a recall, they were slow in approaching the public and media.
– They ignored a corrective engineering proposal to enhance the stability of the Explorer, cited among the worst vehicles for rollovers.
• They weren’t a resource for information on the situation.
– Ford CEO Jacques Nassar didn’t attend early House subcommittee hearings on the issue.
– They didn’t hold regular press briefings or press conferences.
– They didn’t provide a way, place or site for consumers to find the latest information on the tires, the Explorers or the situation.
– Consumers were left in the dark about how the company was going to fix the problem.
• They pointed fingers, rather than take responsibility.
– Ford Motor Company repeatedly blamed Firestone tires, in spite of the fact that crash statistics showed that the Explorer had a higher incidence of tire-related accidents than other sport-utility vehicles, no matter the brand of tire.
– Ford released documents showing that Firestone had received a disproportionate amount of complaints about the Wilderness series since 1997.
– Rather than focusing on fixing the problem, they tried to pass the buck.
Tylenol
In 1982, Johnson & Johnson (J&J) faced a major crisis that had the potential to send the company into financial ruin. Tylenol, the country’s most successful over-the-counter product, with over one hundred million users, was under attack.
Sealed bottles were tampered with and extra-strength Tylenol capsules were replaced with cyanide-laced capsules. These bottles were then resealed and placed on shelves of pharmacies in the Chicago area. Seven people died as a result. Tylenol was called upon to explain why its product was killing people.
The company first learned of the deaths from a local news reporter. A medical examiner had just given a press conference saying people were dying from poisoned Tylenol. Tylenol had to act fast.
What did Tylenol do right?
• J&J put customer safety first.
– Company Chairman James Burke immediately formed a seven-member strategy team with the goal of determining how best to protect people, and then, how to save the product. Their first action was to alert consumers nationwide.
– They pulled all advertising and immediately stopped production of the product.
– After finding two more contaminated bottles, the company ordered a national withdrawal of every capsule. (This showed that no matter the cost to the company, customer safety was priority number one.)
• They were candid. J&J used both public relations and advertising to communicate their strategy, keeping customers informed and in the loop.
– They issued a national alert telling the public not to use the product.
– They set up a 1-800 phone line so people could call in with questions and concerns.
– They established a toll-free line for news outlets. This line also included taped daily updates.
– They held press conferences at corporate headquarters and set up a live television videofeed via satellite to New York.
– The chairman went on “60 Minutes” and the “Donahue” show to share the company’s strategy.
• They offered answers.
– J&J presented an industry first — triple-safety-seal packing that included a glued outer box, a plastic seal over the bottle’s neck, and a foil seal over the bottle’s mouth. Tylenol released the tamper-resistant packaging just six months after the crisis occurred.
Summary
Both of these cases bring to light the need for a well-thought out strategy in crisis situations. Today, Tylenol has regained its place in the marketplace and is considered one of the most trusted products in America. Ford continues to struggle with its reputation.
How do these cases relate to the tourism industry?
If we look at the work done by the 2003 Public Relations Task Force (Glacier Country, the Whitefish, Flathead and Missoula CVBs, Glacier National Park) during the wildfires of 2003, you’ll see many correlations between Johnson & Johnson’s strategy and ours.
• We immediately established a crisis task force.
• We put visitors and local businesses first.
• We were candid with reporters and tourists about the situation.
• We opened the Glacier Country Information Center 24 hours a day to answer traveler questions and concerns and provide alternate travel and recreation options.
• We provided daily updates on the situation to media, businesses and tourists.
• We employed both advertising and public relations tactics to tell our story.
• We set up media interviews and media tours.
Glacier Country finished the year 2003 with above-average numbers. While properties and recreational outfitters in Glacier National Park suffered economic losses, those losses did not spread into the rest of the Flathead Valley. Some figures:
• July occupancy: 88 percent compared to 79 percent in 2002.
• August occupancy: 84 percent compared to 78 percent in 2002.
• September occupancy: 67 percent compared to 64 percent in 2002.
• Glacier Park International Airport reported a record August — up more than seven percent. September’s arrivals matched 2002.
• Missoula’s occupancy also kept pace with the previous year.
While our occupancy percentages showed an increase, the average room rate may not reflect such dramatic growth. That’s because an estimated 10 percent of our overall occupancy was the result of fire crews and governmental employees who paid the lower government rates. We were, however, able to maintain. We didn’t lose ground. We proved that an effective crisis communications plan can work.
Sources:
“Ford Motor Company: What Went Wrong,” MBA 645 Public Relations in Crisis Management, University of Montana, instructor Dr. Fengru Li, August 18, 2003.
U.S. Department of Defense Crisis Communication Strategies Analysis Case Study: The Johnson & Johnson Tylenol Crisis. htpp://www.ou.edu/deptcomm/dodjcc/groups/02C2Johnson%20&%20Johnson.htm
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