One bad day for two good brands

Last August brought one of the all-time great brand debacles – a crisis that saw the share price of a 100-year-old brand plummet by 50% in just a few weeks. Firestone tires, fitted on the most popular sport utility in the U.S., the Ford Explorer, had been linked to 88 road deaths in the US and a further 46 in Venezuela.

Worse was to follow: allegations were made that both companies had attempted to conceal vital safety information from the public; both had apparently known about the problem since 1997 and it had caused recalls in 18 countries already.

Within two weeks of the recall, the percentage of people who thought that Ford had handled the crisis well dropped from 70% to 17%. Meanwhile the Firestone brand was renamed Gravestone and Tombstone by drivers.

Once Firestone’s owner, Bridgestone Corp, realised the extent of the problem, the president acknowledged the ‘near fatal’ blow to the brand. But only near fatal – Bridgestone claimed that it would rebuild the brand, denying speculation that Firestone’s days were numbered.

At the same time, Jacques Nasser, president of Ford, appeared in television adverts reassuring consumers about the safety of the Ford vehicles.

Was this corporate complacency or a realistic appraisal of the situation based on past experience?

Haven’t we been here before?

After all, both brands had experienced disasters before. Firestone had recovered from a major U.S. tire recall in the mid-1970s. And Ford had launched the disastrous Edsel in the 1950s. Other great brands have survived disasters too: Tylenol’s cyanide scare in 1982; Perrier’s benzene scare in 1990; Coke, first with New Coke in the 1980s, and then last year’s Belgian contamination incident; and, of course, the Exxon Valdez.

But in the past, word spread much more slowly and companies had more time to orchestrate their defense. In the mid-70s, for example, Firestone chose to rebuild trust in the brand via an advertising campaign featuring the American actor Jimmy Stewart, the quintessentially trustworthy personality.

It’s a different world today

Bad news about brands travels fast in the Internet age – too fast for companies to react quickly enough. In this latest crisis, the public relations disaster was accelerated by Internet chat rooms, where endless discussions took place about who was to blame and what should be done. Moreover, people are more sceptical and less trusting than even 10 years ago about the ‘spin’ companies put on their operations. And a media that was once relatively tame now loves nothing better than to pour more fuel on the fire in an ever-escalating ratings war. This makes managing a brand’s reputation a potentially impossible task.

Ford has the easier ride?

Many commentators believe that, though the crisis hit Ford’s image in the short term, the carmaker has a better chance than Firestone of emerging relatively unscathed. However, some say that this will only be possible if Ford states categorically that no Firestone products will be used on their vehicles unless the appropriate quality controls have been put in place.

So what options are there for Firestone?

Firstly, Bridgestone could spend heavily to rehabilitate the brand – the current company line. Or it could drop or rename the Wilderness line, which has been linked to most faulty tires. More drastically, it could drop the Firestone name in favor of Bridgestone, or create a new name altogether.

What is certain is that, if the brands are to recover, tires must be replaced quickly, lawsuits settled promptly and stringent new quality monitoring procedures put in place.

So where do we go from here?

It’s hard to predict for sure what will happen, but it is probable that, with good crisis management, we will witness once again the ultimate benefit of sustained brand-building: the ability to come back from near death because of years of good reputation captured by the brand name. Only time will tell – like a Florida recount in last year's U.S. presidential election, it’s too close to call!