Losing the firefight and the war
• Critics and consumers roast Ford over inaction as Kugas combust
In the court of public opinion, perception is king. Motor company Ford’s reputation and brand image have taken a pounding in SA after the engines of dozens of Kuga sports utility vehicles caught fire.
In an earlier, unrelated incident, a driver burned to death in his Kuga. Ford and local forensic investigators are arguing over the cause of that blaze; the only thing they agree on is that it did not start in the engine.
Tens of millions of cars are recalled around the world annually for safety issues, many of them fire-related. Recalls, as one US industry executive put it, have become “the new normal”.
Most, though, do not unleash the storm of vitriol that has been directed at Ford and its Pretoriabased South African subsidiary.
The problem has been Ford’s response — or lack of it. In the corporate crisis communications rulebook, the first thing you do, particularly when lives are at stake, is own up: tell the truth and tell it first. Show you are in control (even if you are not). Be proactive. Show you have customers’ best interests at heart. Oh, and a little empathy does not hurt.
Ford Southern Africa gives the impression it has done none of these things. At every stage, it appears to have been forced into action. Jeff Nemeth, CEO of Ford’s sub-Saharan Africa operations, admits that, in recent weeks at least, that is not far off the mark.
“All we’ve thought about is our customers and their cars. We were 100% focused on protecting them. So each time a story came out about a Kuga on fire, we were reactive. We have not been proactive yet.”
Not that the company had ignored the problem. Nemeth explained at last week’s recall announcement that Ford had been sending affected Kuga engines and even complete vehicles to Europe and the US for investigation since early 2016, when it first became aware of the fire risk.
Only recently, after a dramatic increase in the frequency of fires, did engineers come up with the probable cause. Engine coolant is not being distributed properly, causing overheating. As a result, cylinder heads are cracking, spilling oil on to hot engines. Onboard computer software, which should react to warning signs, seems not to have done so.
All these problems are fixable and Ford announced the immediate recall of 4,556 Kugas last week to replace and upgrade the faulty parts. Such is the rush that Ford dealers do not have enough spare parts and the company is using car-rental companies and Uber, as well as its own vehicle fleet and media test cars to keep customers mobile while their Kugas wait for repair.
The question many people are asking is: if Ford was aware early in 2016 Kuga engines could go up in flames, why did it not issue a warning then? How did the situation escalate to garish media headlines before visible action was taken?
Nemeth rightly points out that no lives have been lost in these fires but international reputation management specialist Deon Binneman says: “Maybe not lost, but certainly at risk. The response was far too slow.”
Nemeth says the first two fires failed to ring alarm bells because their radiators had been penetrated, one by a stone and the other by a rat.
“This distracted us from immediately looking more closely,” he says. “It wasn’t until September, when the weather got warmer, that we saw an escalation,” he adds.
In retrospect, he says it might have been advisable then to warn customers of a potential problem, rather than waiting to identify it.
Veteran South African advertising executive Gary Leih, whose clients included Ford when he ran a UK advertising agency, says the Kuga episode is “a textbook case in how not to act in a crisis”. “I don’t understand the prevarication,” he says. “The impression is of a company that has taken a year to act on something that is potentially lethal. That is irresponsible.”
Brand consultant Andy Rice agrees. “When something goes wrong, the key is speed out of the blocks. The problem in this case is not Ford’s engineering — these things happen — but its response. From the outside, it’s been like pulling teeth. Each step seemed coerced and under pressure,” he says.
Nemeth says that is not entirely fair. At last week’s recall announcement, National Consumer Commission head Ebrahim Mohamed implied his organisation — itself under pressure for perceived lack of urgency (it originally gave Ford until the end of February to find the cause of the fires) — had forced the recall. Not so, says Nemeth. The decision was Ford’s, without coercion.
He adds that, from midDecember, the company started contacting potentially affected customers via e-mail and SMS. Dealers were also instructed to telephone all their customers personally.
The trouble is that Ford is so comprehensively losing the propaganda war, that the public will believe anything negative.
“Customer perception is more powerful than reality and the domino effect of poor reputational risk management may be felt for months or even years,” says Indwe Specialist Risks director Jan Drahota.
So when, after Nemeth said the Kuga problem was limited to imported 1.6l models built in Spain from December 2012 to February 2014, claims surfaced last week of other Fords burning, people started wondering if all the brand’s products were dangerous. Whether the growing number of claimed incidents is influenced by the planned class action lawsuit against Ford, or whether some are selfinflicted, remains to be seen.
Nemeth says that after a newspaper published a picture of another Kuga supposedly in flames last week, it turned out to be of a previous incident.
For Kuga owners, even those in vehicles untouched by fire, there is a more pressing problem: who will want to buy their vehicles? Resale values have plunged, putting thousands of owners out of pocket through no fault of their own. Nemeth says Ford is looking at ways to underpin values.
Brand expert Jeremy Sampson says that the Kuga saga is another example of how companies can no longer directly control brand perception.
History is littered with examples of companies undermining generations of brand growth — not to mention opening themselves to billions of dollars in penalties and lost business — through denial and inactivity. Volkswagen, for its emissions cheating scandal, and Samsung, for its exploding Note 7, are among recent examples of companies that thought they could hide or ride out the storm. They were wrong.
“In this age of social media, where every incident and image is shared immediately, companies can no longer hide or control the message,” says Sampson. “Those that think they can, are living in the dark ages.”
So what should Ford do now to regain credibility? What it should have done all along, says Binneman — be upfront and open. “I’m not just talking about fixing cars. So far, Ford has been focusing on technical issues. But who will fix the emotional issues?” he asks.
Nemeth should be the face of the message, constantly visible, informing and reassuring.
Nemeth says that is precisely what he will do.
“My name will be on everything. We have to start getting our own story out there.”
It is not too late to claw back sentiment, says Sampson. “Even a belated suggestion of regret from the CEO — a ‘sorry, we should have reacted sooner’ — would make a big difference.”
Rice says: “As long as they show remorse and avoid more trouble, I have a view that the overall Ford brand’s strength is such that people will eventually forgive and forget.”
THE IMPRESSION IS OF A COMPANY THAT HAS TAKEN A YEAR TO ACT ON SOMETHING THAT IS POTENTIALLY LETHAL