The Sunday Mail
FORD’s conduct over the Kugas could serve as a case study on how not to manage a company’s reputation and how not to do crisis management. What price is a company’s reputation?
In the case of a consumer brand such as Ford — where the value of the brand depends in part on consumers’ perceptions of the safety of its vehicles and where there are plenty of competing products in the market — any reputational damage could have immeasurable effects.
It will be interesting to see what happens to Ford’s market share in SA in coming months and years given the way it has dealt with, or, more accurately, failed to deal with the Ford Kugas that have a disturbing habit of bursting into flames.
One thing is for sure though —Ford’s conduct over the Kugas could serve as a case study on how not to manage a company’s reputation and how not to do crisis management.
The tragedy that sparked off the Kuga debacle (as it were) goes back more than a year to the death of Reshall Jimmy, whose Ford Kuga 1,6-litre sport utility vehicle caught fire in the Wilderness.
Since then, even by Ford’s own belated admission, more than 39 of the vehicles have ignited — fortunately, without any further deaths or injuries because drivers and their passengers have managed to get out of the vehicles in time.
Ford was alerted to the problem, not just by the owners of those vehicles but also, reportedly, by insurance companies, which raised concerns with Ford as far back as a year ago.
Yet Ford continued to duck and dive and to claim it could not recall vehicles until it could establish what, if anything, was wrong.
It blamed the police and private investigators for obstructing its efforts to find out what was wrong, taking the police to court recently to get them to disclose information on the Jimmy case.
But private investigators, in turn, claimed it was Ford that was being obstructionist.
As it turns out, the number of affected cars is small, and the Kuga issue could easily have been dealt with much earlier.
Even if it had been in the right, the defensiveness and denial did nothing to make the company look good.
And even as Kuga owners became more and more anxious about their safety and that of their families as an increasing number of the fires were reported in recent weeks, Ford continued to profess ignorance.
The National Consumer Commission had already launched an investigation and given Ford until the end of February to report back. But it took an ultimatum from the commission to propel Ford, finally, to speak out this week (last week) and to capitulate on recalling the vehicles.
After insisting only last week ( a fortnight ago) that it did not know why the vehicles were bursting into flames, on Monday Ford, was suddenly able to describe the details of the problem, which it says involved coolant that was not circulating properly and cylinder heads that were cracking and leaking oil, causing fires.
The wear and tear on the vehicles and the hot South African summer have been blamed for the recent escalation in the rate of fires.
Now, Ford has recalled the vehicles for checking and repairs, though it still refuses to replace them.
It is, suddenly, offering courtesy cars to those whose vehicles can’t be immediately repaired and is advising drivers on what to watch for and what to do.
As it turns out, the number of affected cars is small — including just over 4 500 of this particular model that were manufactured in Spain between 2012 and 2014 — and the Kuga issue could easily have been dealt with much earlier.
The National Consumer Commission deserves credit for holding the company to account.
We need much more consumer activism on faulty products in general and our statutory institutions, such as the commission, could do a lot more.
Meanwhile, the commission and vehicle owners need to make sure Ford conducts itself appropriately from now on, fixing the faulty vehicles and the damage to its brand. — Business Daily
