Kuga fires have damaged Ford badly – Will people trust Ford enough to buy their cars?
Ford South Africa has suffered huge damage to its reputation thanks to its poor handling of a crisis involving some of its Kuga cars.
The global car manufacturer’s local operation has been forced to recall more than 4500 Kuga Ecoboost 1.6 litre models manufactured between December 2012 and February 2014. Ford South Africa’s chief executive Jeff Nemeth announced the recall after more than 40 cases of engine fires had been reported.
One death allegedly resulted from a Ford Kuga exploding in December, 2015.
There can be little doubt that the Ford Kuga crisis has hurt the company’s reputation. Ford South Africa has been attacked viciously in the media and radio stations have been inundated with calls from angry customers, some of whom have resorted to legal action against the company.
Ford South Africa has clearly made some elementary mistakes in managing the crisis.
Companies today recognise the importance of a strong corporate reputation as a critical strategic asset, which translates into a source of competitive advantage.
This is why a company’s reputation has become a top priority.
One reason why reputation has been put in the spotlight so much is the huge corporate reputational losses in the past few decades. These include BP’s oil spillage disaster and a number of car manufacturers.
Toyota has had to recall millions of vehicles worldwide because of various mechanical issues. And in 2015 Volkswagen’s reputation took a serious knock after it was found to have manipulated its diesel vehicles’ software to pass environmental tests. General Motors also suffered reputational damage because of faulty ignition issues resulting in recalls.
So what did Ford South Africa get wrong? What should it have done to protect both its customers and reputation?
Proper crisis management is crucial for a company. This is of course particularly true when a bad story breaks and a full-blown crisis is at hand. But crisis management is only effective if there’s already a reputation management process in place. This should be done during the “good times”.
Also, a member of the executive should have been assigned responsibility for the company’s reputation. If this is done properly, managing a crisis is always easier as goodwill would already have been built over time.
Once a crisis hits, it is extremely important to act immediately. Three things should be done:
The company must acknowledge the problem immediately, it must engage empathetically with customers and answer questions from the media as honestly as possible. It then needs to plan its next steps in order of priority.
It seems as if some companies still think they can keep facts away from the outside world. They think they have time to fix things on their own before deciding to come out in the open. In the old days, companies had the luxury to hide. But this was before the immediacy of the internet and social media arrived.
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