Rushing for the Exits

Deny, and lose credibility. Reassure, and you survive.

Deny, and lose credibility.
Reassure, and you survive.

Do something that endangers the public, and you may find yourself isolated.

Even in Japan, the land of the keiretsu — interlocking business and shareholding relationships where partners are helped through difficult times and routinely shielded from the most severe repercussions of missteps. But not this week.

In a three-day period, airbag maker Takata was abandoned by Japan’s three largest automakers — Honda, Toyota and Nissan. Other automakers around the world are weighing similar steps.

Those actions aren’t designed to scold Takata for misbehavior. That’s not how business decisions are made. They’re about affixing blame on someone else and insulating yourself.

Similar reasoning was at work this week as the U.S., U.K. and Russia canceled flights to Egypt’s Sharm el-Sheikh, even though it’s uncertain if a fatal jetliner crash was the result of terrorism or an accident.

The rationale you’ll most often hear is, “Our top priority is protecting the consumer.” Or “our customers.” Or “the public.” You pick the term that’s most appropriate for the occasion.

Liability is a harsh mistress, whether you’re seeking to avoid it or trying to deal with it.

Volkswagen is the latest example of the latter. It’s in the midst of one of the most embarrassing and costly recalls in automotive history because of efforts to evade emission controls.

VW’s already set aside $9.78 billion, just for the cost of recalling and fixing cars. That doesn’t include government penalties or the cost of resolving lawsuits by customers and shareholders. (One option VW is considering to short-circuit potential lawsuits is to voluntarily offer all owners up to $1,250 each in cash to offset loss of value.)

Twin lessons:

  • Deny a problem until you no longer can, and you’ll lose all credibility and any hope of controlling the story.
  • The more quickly you act, and the more convincing and reassuring you are, the better your odds of surviving.


“Because Reputation Is Your Most Valuable Asset”

Gillott Communications is a Strategic PR firm. We’re Fixers. Crisis & Reputation Management. Litigation. Media Relations. Crisis Prep. More than half a century of expertise working with clients to resolve issues both in and outside the media’s glare — in their professional and personal lives.

You can reach Roger Gillott and Eden Gillott Bowe directly at 310-396-8696.

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For a deeper glimpse into our world, see our book on Amazon, “A Lawyer’s Guide to Crisis PR: Protecting Your Clients In & From the Media.”

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