- March 28, 2013
- Posted by: essay
- Category: Term paper writing
It should be noted that during 2008-2010 automotive industry crisis public relations played a leading role in Ford’s survival and future success. Ford’s CEO, Alan Mulally, and Scott Monty, Global Digital and Multimedia Communications Manager, are very effective communicators, react quickly and know how to capture the attention and trust of the public. Moreover, Bill Ford also actively participated in creating an effective anti-crisis strategy. A winning public relations strategy and clear elements of crisis management can be traced from the very start of the crisis.
In 2008, the representatives of the Big Three arrived in Washington to discuss possible bailout; however, they did not have exact plans, and the public was outraged with this fact as well as with their use of private jets for this meeting. The reaction of Ford was immediate: Mr. Mulally promised to accept an annual salary of $1 if Ford was to take any of the bailout money (Coombs & Holladay, 2010). In addition to this, Ford promised to sell some private jets in order to generate funds fro coping with the crisis. Ford’s public statements where the company rejected bailout help and only secured a credit line in case of urgent needs have won public respect, and made the Americans to value Ford and its production from a different point of view.
Ford kept informing the public about their progress, and it should be noted that its representatives did not make loud claims, but instead revealed the true situation and plans for future. The progress in paying off the debt was clearly shown, and Ford managed to use the bailout approach of GM and Chrysler to get a great competitive advantage over them in the eyes of the taxpayers (Coombs & Holladay, 2010). In 2009 Jay Ward, Ford’s communications representative, stated If everyone else pays back every penny that Uncle Sam has loaned’ them, I will eat my Mustang and my Flex (Reeves, 2010). After all these campaigns, many customers previously attached to Japanese cars felt proud for Ford and started considering Ford’s cars as an alternative.
Moreover, Ford publicly announced that crisis presented additional opportunities, and encouraged suppliers to re-examine their portfolios and financial structures (DeSanto, 2010) in order to create a healthier business models. The process of supplier consolidation, initiated and supported by Ford, allowed to improve the supply base for automotive industry. In a series of seminars Burt Jordan (Ford’s executive director of purchasing) outlined the need for reexamination of supplier business models, and called the suppliers to play a proactive role in the industry.
Even during crisis, Ford managed to focus on long-term public relations initiatives: 25% of Ford’s marketing budget were spent to digital media (Reeves, 2010), and it was the first in automotive industry to understand the importance of social networking and other online resources such as media ads and online gaming. The belief that digital media are the key driver, and substantial investments into digital media have increased Ford’s popularity and gained public attention to new Ford cars such as Ford Fiesta. Scott Monty stated in 2008: The Ford brand is being managed globally for the first time, and social media is going to be a big part of that (Reeves, 2010). In my opinion, the financial success of Ford in 2011 is to a large extent driven by the company’s public relation strategy and actions during the crisis.
7. Lessons Learned
Before the crisis, Ford was often mentioned as an example of unsuccessful crisis management due to its Firestone incident in 2000s. Tire blowouts related to Ford’s supplier, Firestone, caused public scandal, but both companies damaged their reputation and brands by passing the responsibility towards each other (DeSanto, 2010). There Ford made several critical errors in the sphere of public relations, namely: blamed the customers for improper inflation of the tires, did not mention what would be done to solve the problem, and did not accept the responsibility for their brand.
Moreover, Ford failed to communicate openly and timely with the public, and have ignored the early signs of crisis in 1996. A costly tire replacement program took place in 2001, and the dispute with Firestone was finally settled in 2005 (DeSanto, 2010). Although the tires in fact were the Firestone’s scope of responsibility, Ford had to take immediate actions because the value of the brand belonged to Ford, not the Firestone. Overall, the reputation of Ford was significantly damaged and customers turned their attention to Japanese cars, which were more fuel-efficient and more safe (Reeves, 2010). It is possible to see that Ford has learned many lessons since that crisis: the company adopted an open and honest style of communicating with the public, and started to react quickly at early signs of crisis. Moreover, Ford directed its efforts to social media and realized the importance of public opinion and reputation for the company’s effectiveness.