Cover Story: Toyota - recall and reputation

CHARLOTTE, NC (WBTV) - Tens of thousands of Toyota owners in the Carolinas concerned about what they should do next.  U-S Transportation Secretary Ray LaHood started the day telling Toyota drivers to stop driving their cars, then later backed down, saying they should drive them to dealerships for repairs.

Now there are new reports about possible problems with the braking systems of Toyota's hybrid Prius models.

Two-point-three million cars recalled and some dealers around the country say they haven't gotten the parts for the fix yet.

Local automobile experts say it's a situation they've never ever faced.  The biggest recall, an unprecedented halt in sales and a public relations nightmare.

Park your Toyotas and get them to a dealer, the Transportation Secretary said before backtracking acknowledging that with millions of cars on the road parking them all would be next to impossible.

But his initial words set off a flurry of criticism.  The Triple A's Tom Crosby said, "I have no idea why he would tell people to stop driving. I know people are going to take them to the dealer. It's almost irresponsible."

Put in perspective he points out that on the average 115 people are killed on roads in the U.S. each day while deaths so far related to the Toyota recall - twenty, which affects cars going back five years.

Repair kits are arriving now at local dealerships.

Of the models covered in the recall and of customers who've already shown up at the 8 local dealerships in the greater Charlotte area none has seen any gas pedals sticking.

And dealers point out you may have a Camry for example listed in the recall but may not be affected because your car was manufactured elsewhere.

Toyota is sending out letters to those specific customers affected dealership officials are advising customers to wait for their letters before making an appointment.

"I'm not scared," said driver Jim Gallis. "I drive it everyday, I've had no problems with the car."

But the damage to such a venerable brand has already been done.

"It takes a long time to establish a good reputation, but it can be damaged fairly quickly as Toyota is recognizing."

Dr. Alan Freitag teaches public relations in the Department of Communication Studies at UNC Charlotte.

He says Ford and Firestone had a similar p.r. nightmare a decade ago when it had to recall hundreds of thousands of tires on its popular Explorer SUV.  Tire treads blew off, SUV's rolled over and hundreds were killed.

Audi had problems too in the 1980s with cars that would suddenly accelerate.  While all the companies eventually recovered sales suffered for awhile.

"Reputation is based on behavior," says Freitag, "and you can't repair reputation with words. You change reputation.. you improve reputation.. repair reputation with behavior. So that's what they need to pay attention to."

He says it's behavior that matters in an enduring sense on the reputation of the organization.

Many are waiting and watching Toyota's behavior in this crisis.. to see how Toyota responds.  It's already costing the automaker dearly.

Sales fell 16% in January.

Toyota is estimating the recalls are likely to cost the company about $900 Million.  Lost sales already costing another $155 Million a week.