Suzuki Shifted Into High Gear When Crisis Hit : Firm Started Campaign Immediately to Combat Bad Publicity on Samurai
Washington lobbyist Jim Lake has had a rough June.
And, with the July issue of Consumer Reports now hitting the newsstands, the next month may not get much better.
Suzuki, one of Lake’s Japanese clients, has been hit with a firestorm of negative publicity this month surrounding reports from the publisher of Consumer Reports that Suzuki’s Samurai sports utility vehicle is dangerously unsafe and prone to roll over.
Consumers Union, publisher of Consumer Reports, set off the controversy by announcing that, in the magazine’s July issue, it would give the Samurai the first “not acceptable” rating it had issued for a car in a decade. Consumers Union also called on Suzuki to recall all 160,000 Samurais on the street, take the vehicle off the market, and give full refunds to Samurai owners.
For Lake, the Samurai flap couldn’t have come at a worse moment. It broke just before Lake, the former communications director for the 1984 Reagan-Bush campaign, came under fire in mid-June for lobbying federal regulators on behalf of Suzuki and other Japanese companies while also serving as a senior communications adviser to Vice President George Bush’s presidential campaign.
The Samurai controversy also came just as Lake was lobbying the U.S. Customs Service on a sensitive trade issue crucial to Suzuki’s future.
The agency is in the midst of deciding whether the Samurai and other Japanese utility vehicles should be considered trucks or passenger cars in the future. If the Samurai is considered a car, its shipments will be so tightly limited by Japan’s stringent auto import quotas that it may be forced off the market; if it is called a truck, Suzuki will be allowed to import as many as it wants.
After months of work, Lake had already won the first round in this regulatory battle, getting Customs to agree that the Samurai is a truck under current federal standards.
But the government now wants public comment on whether it should change the standards in the future, just as headlines coast to coast are blaring charges that the Samurai is unsafe.
Under so much pressure, Lake seems to think the best defense is a good offense.
He has been meeting with officials at the White House, Customs Service and the Treasury Department, which oversees the Customs Service, along with members of Congress, to get across Suzuki’s argument that the Samurai is safe.
He wants to make sure that the roll-over controversy doesn’t affect the Customs Service’s decision, and that Congress doesn’t demand action on the Samurai from federal highway safety regulators.
Nationwide Campaign
“I think if people in Washington were left to their own devices to look at the publicity coming from the Consumers Union, they wouldn’t have a good perception of the vehicle,” says Lake. “Getting our story told to people who may have a policy choice to make about it is important. So we have been working to get the message known, to both people on Capitol Hill and in the executive branch, that they should not be concerned about (the Consumer Reports flap) and that no one should be taking actions that could be more damaging than those taken already by Consumers Union.”
Lake’s quiet efforts in the political arena are just part of what has turned into an all-out, aggressive nationwide campaign by Suzuki to turn around the tidal wave of negative publicity that has hit the Samurai.
It may be an impossible task. With the Samurai in danger of becoming a national joke--Jay Leno and other comedians have already incorporated the Samurai roll-over into their routines--the once-hot new car has already cooled off.
Sales are apparently slumping badly and six class-action lawsuits have been brought against Suzuki since the Consumers Union’s press conference. Now, auto industry observers are comparing the public relations disaster that has befallen the Samurai to the recent Audi 5000 sudden acceleration crisis, which eventually forced Audi to change the car’s name and offer huge cash rebates to owners.
Yet unlike Audi, which vainly tried to ignore the mounting negative publicity surrounding the 5000, Suzuki is hitting back hard, despite one lawsuit that charges that Suzuki’s efforts to protect the image of the Samurai constitutes a conspiracy and a violation of federal racketeering laws.
“We’re moving forward with our aggressive defense of the vehicle,” said Lynne Doll, a vice president at Rogers & Associates, Suzuki’s Los Angeles public relations firm. She terms the Philadelphia racketeering lawsuit “an absolute misuse” of the federal anti-racketeering laws.
Suzuki’s counteroffensive actually began the night before Consumers Union held a press conference June 2 to announce its findings on the Samurai.
After hearing from reporters that Consumer Reports was planning a press conference the following day, Suzuki feverishly started buying advertising time on the next evening’s local and network television news shows. Even though it still didn’t know exactly what Consumer Reports planned to say, Suzuki wanted to have a place to air their rebuttal.
In the following 10 days, Suzuki spent $1.5 million over and above its normal advertising budget to air ads quoting positive reviews of the Samurai from automotive trade publications. Although some networks refused to air the ads on their news programs at a time when Suzuki was a hot news story, the ads did find their way onto the air in the major markets where Suzuki has dealerships.
In the meantime, Rogers & Associates put two staffers on a plane for New York so they could attend the next morning’s press conference, where they then handed out a company press release stating that Suzuki would have a response later in the day. Suzuki also bought time on a satellite so that it could transmit a video press release for use by local television stations around the country in their stories about the Consumer Reports findings.
Suzuki’s five-member “crisis group” which had been formed last winter in response to earlier roll-over reports by the Center for Auto Safety, a Washington-based consumer group, and in a syndicated series of news reports on NBC affiliated stations, quickly came together as well. It included Suzuki engineers and outside advertising and public relations staffers, who planned an advertising campaign and a media response to the allegations.
Veiled Warnings
After issuing a press release the day of Consumers Union’s press conference rebutting the charges, Suzuki held a press conference in Los Angeles the following week that was broadcast via satellite to reporters in Detroit and New York. An independent engineer hired by Suzuki cited federal statistics that he said indicated the Samurai was not prone to roll over, while Suzuki general manager Doug Mazza showed videotapes, once used by American Motors to defend its Jeep utility vehicles against lawsuits brought by roll-over victims, to show that almost any car or truck can be made to roll over.
Mazza also made veiled warnings in the press conference that Suzuki planned to investigate ties between the Consumers Union and the Center for Auto Safety, and might take legal action against them. But Consumers Union officials dismissed such threats as attempted “intimidation.”
Concerned that its new dealers might not be prepared to handle the controversy, Suzuki also sent them videotaped copies of the press conference, along with copies of materials handed out to reporters that dispute the charges. Suzuki also has a toll-free number for customers to call with questions.
Finally, last week, Suzuki officials and the company’s attorneys met with attorneys general from a number of states, including California and Texas, to update them on the crisis and head off any potential lawsuits from the consumer protection branches of those agencies.
Ron Rogers, head of Rogers & Associates, who helped develop Suzuki’s strategy, compares Suzuki’s efforts to the way Johnson & Johnson handled the Tylenol tampering scare. Johnson & Johnson was open, he notes, and didn’t back off from the crisis.
A Stone Wall
“I think this,” says Ron Rogers about Suzuki’s strategy, “is going to go down in textbooks in schools as a case of what a company does when falsely accused.”
Not everyone is convinced, however.
John Mendoza, a Samurai owner from Manhattan Beach, complains that Suzuki wouldn’t discuss a compensation deal for his Samurai. “I spoke to the customer service representative, and he was a stone wall,” Mendoza said. “He just said the car was completely safe, and that the articles were based on misinformation.”
Such complaints may be difficult to deal with as long as Suzuki continues to deny the charges.
Indeed, this doesn’t appear to be a controversy that will go away easily. Dealers are learning that the hard way. At least one who initially sought to dismiss the roll-over controversy by making light of it in his advertising now admits it is hurting his business.
The day after the Consumers Union press conference, a sign went up outside Mark Singleton Suzuki in Marietta, Ga., saying: “You’ll flip over our prices and roll over our good deals.” But now that sign--and sales--are down.
“A lot of people are still concerned” about the roll-over issue, says LaDale Cox, sales manager for the dealership. “At first, some people came in and made a joke of it when we had the sign up, but you could tell it was still in the back of their minds.”
