Tag Archives: crisis communication

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Repairing a Damaged Brand

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Will the car sell itself? Perhaps. But some potential buyers will see the Musk association with Tesla as reason to look elsewhere.

One of the relatively new areas of communication research is the study of how a company or individual responds to a damaged brand. It is an interesting problem to tackle because there are so many corporate vulnerabilities.  There may be a publicized problem with a product. In other cases the producer’s recent words or deeds are the focus. In the case of damage to the Tesla car brand, the challenge is obviously with CEO Elon Musk, who is about as popular now as the idea of dental surgery. Musk signed on to Donald Trump’s chaotic effort to dismember the federal establishment by firing thousands of career federal workers. Weeks ago he brandished a chain saw in the Oval Office to dramatize what he and his DOGE staff planned to do in cutting jobs and federal agencies like OSHA and NOAA. The photo op gave new meaning to the metaphor of being tone deaf. The saw suggested how indelicate and insensitive the process would be. News coverage has been filled with dazed workers fired on the spot, and the apparent pleasure Musk seemed to receive by depriving public servants of their employment and citizens of needed services. In rhetorical terms, for many, Tesla has become a convenient synecdoche, a symbol for a whole cluster of negative feelings associated with the administration.  Dealers and automobiles are now easy targets for protesters.

A recent Newsweek poll notes that forty-nine percent of respondents said they view Musk unfavorably, compared to only 39 percent who view him positively. Those are not good numbers for a high profile head of a company who has taken a detour to help fire some 140 thousand federal workers.

The brand Musk nurtured as uniquely his has paid the price in terms of a huge drop in the value of Tesla stock and car sales. In Europe, the losses have nearly been total.  And many owners in the U.S. have since sold their cars. Many of those who remain have grown uneasy driving their Teslas in areas where hostility toward the administration is white hot.

If these problems aren’t difficult enough for the brand, they have been made worse by Musk’s seemingly pro-Fascist and gestures and statements, confirmed recently by his overt support of Germany’s far right political parties. In the 1920s Henry Ford similarly flirted with German Fascists and virulent antisemitism. But news about Musk has been more overtly available and negative.

For all of these reasons the former Cinderella brand now seems to be in deep trouble. Investment specialist and former enthusiast Dan Ives cites the ongoing Tesla problems around the world as a “dark black cloud” over the company’s stock, which is now down 40 percent this year. The future is further clouded by high-flying new EVs from BYD, Nio, XPeng, and other Chinese automakers. So far, these lower priced competitors are tariffed out of the U.S. market. But Tesla now has other car makers with their own competitive products. One auto analysist has compared the storm of controversy that has overtaken Musk to an F5 tornado.

Salvaging a brand

People who focus on crisis communication look first at earlier cases, like the storm of news about Johnson & Johnson’s painkiller brand Tylenol in 1982. It was hit by a literal life-and-death crisis when seven people died after taking contaminated Extra Strength Tylenol. J and J saved the brand by being transparent about what had happened, and reformulating Tylenol into a tamperproof pill.

Other brands have not been so lucky and were abandoned because of various accidents and flaws that got extensive coverage. If you are old enough, think of the Edsel, the Ford Pinto, the Chevrolet Corvair, or the Oil Spill of the tanker in 1989. More recently we witnessed misuse of Facebook personal data by Cambridge Analytica in 2016.

Notwithstanding question’s about Musk’s character, will the Tesla continue to sell itself? Perhaps. But some potential buyers will see Musk’s association involvement as enough to look elsewhere.  Then, too, the company is not known for thoughtful attention to customer concerns and needs.

Some potential buyers won’t care, using the logic that they are buying the car, not its creator. If Musk removed himself from Tesla’s management, that would probably help.

The usual road to recovery usually begins with a full apology for past actions. Theories of brand repair lean heavily on honest disclosures of mistakes. Helen Edwards, an expert in marketing, has additional and familiar suggestions:

  • Keep the name.
  • Study histories of Tylenol and other restored brands.
  • Make product service a top priority.
  • Refresh your communications with your customers.
  • Give yourself 10 to 15 years to recover.

In the end, Musk has one deep liability and one significant strength. The strength is that he seems to have boundless wealth, which can carry even as massive a business along for a while. The weakness is equally clear. If a person has the kind of character that tends to turn people off, in this hothouse digital age that is something that is not easily changed, even if you own one of the platforms.

Tracking Corporate Miscreants in ‘Time-Out Corner.’

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The bottom corner of the Opinions page has become a kind of time-out corner where corporate miscreants try to earn their way back into the fold. 

One of the greatest challenges an institution can face is an unanticipated need to counteract news about bad corporate behavior.  There is now a whole field of “crisis communications,” with branches in academia as well as the public relations field. These firms specialize in putting out fires that can flare up when news about their clients is not good. The problem may be bad batches of automobile tires (Firestone and Ford in 2000), sudden acceleration in cars (Toyota in 2004 and Audi in 1987), disastrous oil spills (Exxon in 1989 and BP in 2006), drug safety (Tylenol in 1982), and even the treatment of show animals (SeaWorld in 2013).

For each of these companies the need to reassure the public that they remain good corporate citizens means spending millions of dollars on image-repair advertising. These efforts range from glossy pro-environment booklets sent to schools (Exxon) to quarter-page ads in the New York Times’ Op-Ed page (almost everyone).

The ads in the Times are an especially reliable indicator that a company is going through a public relations nightmare. It’s not that the paper has a huge national following. It doesn’t, at least by the standards of other media like broadcast television.  What the Times provides is a way to reach opinion-leaders and important investors. The bottom corner of the opinions page has become a kind of time-out corner where corporate miscreants can earn their way back into the fold.

These days that quarter-page advertising space has been routinely filled with ads assuring readers that SeaWorld is a good custodian of the large ocean mammals it features in shows at some of its eleven locations. Their problems started with a single documentary picked up by CNN and Magnolia pictures.  Blackfish, a 2013 feature directed by Gabriela Cowperthwaite focuses on a single killer whale at SeaWorld Orlando.  The animal is linked to the deaths of two trainers, as well as a third man found dead in the whale tank after the park had closed for the day. The film does not simply connect the deaths to the Orca.  It makes the case that the captivity of these large sea mammals is inherently inhumane, slowly driving them to erratic behaviors not seen in the wild.

The release of Blackfish coincided with a noticeable rise in public distrust of shows built around animal acts. There has also been a growing consciousness of the precepts of the animal rights movement, which in the United States has moved from the margins to the mainstream. SeaWorld Entertainment has been a lightning rod in this change, becoming one of the most visible targets of Americans newly sensitized to the requirements of capturing and maintaining animals for daily performances.

Crisis advertising isn’t really about the short-term goal of selling more tickets.  The rhetoric is more defensive: partly to reassure general readers who could drift toward open opposition, but also to keep the stock price of the company from going south in a gradual sell-off.  According to the Wall Street Journal, as of February of this year attendance and revenues at the company’s parks had both fallen, with a fourth-quarter loss at the end of 2014 of about $25 million.

And so the ads.  A recent message in the Times “time-out corner” carried the headline MAKING BETTER HABITATS, voiced in the person of Hendrik Nollens, a vet at SeaWorld:

SeaWorld’s killer whale habitats are among the largest and most advanced in the world.  But that’s not enough.  Here in San Diego, we're set to transform these habitats into dramatically larger, more natural settings.  These new habitats will provide all of us—marine experts and visitors alike—with a deeper appreciation and understanding of these magnificent animals.1

There are two useful conclusions worth noting about this particular case.  First, SeaWorld may triumph and win back its audiences with a sustained campaign.  We have short memories.  And many Americans shy away from messages that redefine entertainment preferences as ethical choices. Second, and even with my caveats, it’s hard to imagine a single documentary that has so galvanised so many Americans.  Blackfish is convincing evidence that the long-form documentary is a powerful kind of persuasion.

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1The New York Times, July 16, 2015, p. A23.

Comments: Woodward@tcnj.edu