— Cribs that choke babies. Flammable sleepwear. Cyanide-laced Tylenol capsules. Firestone tires that allegedly peel off their casings, triggering blowouts and rollovers.
While the headlines and images associated with prominent U.S. product recalls are vivid for many consumers, the behind-the-doors process companies engage in before deciding on formal recalls remains elusive.
But taking a closer look at how companies weigh the complex benefits and risks associated with recalls — with the help of a group of product recall, law and marketing experts — reveals how firms must carefully juggle consumers’ safety, liability issues, and the long-term health of the companies’ brands, all in a timely manner.
Experts say consumers have a stubborn, long-term memory when it comes to companies that even inadvertently seemed to drag their feet about botched products. And in the vacuum of information, consumers easily grow suspicious, they added.
Once the debate about whether or not to pursue a formal product recall ends, an old business adage seems to ring true — the customer is always right.
“Consumers are pretty understanding people. They don’t expect you to be perfect,” said R. David Pittle, a former commissioner for the U.S. Consumer Product Safety Commission, which oversees the safety of many consumer products ranging from clothes to baby cribs. “But they do expect you to be in their corner when trouble hits,” Pittle said.
Among the myriad of factors a company examines when considering a product recall, figuring out the exact nature and extent of the problem — and any related impact on consumers’ safety — ranks among the top.
Experts say the case of cyanide-tainted Tylenol capsules in 1982 illustrates how the public’s safety, foremost, prompted the McNeil Co. to immediately recall some 264,000 bottles of Extra-Strength Tylenol.
The swift action followed reports of several people who died in suburban Chicago after taking the pain-killing capsules. They were laced with the poison locally, not during the manufacturing process, investigators concluded.
A Prompt Response
In the Tylenol case, quickly removing all the related capsules until company officials and health authorities could get a better handle on the crisis was the obvious right action to take, said Pittle, who is now senior vice president and technical director for Consumers Union, a non-profit group that tests consumer products and publishes Consumer Reports magazine.
“They [McNeil] did the right thing and they did it promptly,” Pittle said. “Putting consumer safety above all else can help develop a loyalty from the consumer.”
A quick recall is expensive, “but customers appreciate it,” noted Russell Winer, a marketing professor at the University of California at Berkeley’s Haas School of Business.
Of course, companies aren’t the only ones that can put a recall into motion, as was the case with Firestone tires. Various government agencies can also step in and force a recall along.
Earlier this month, Bridgestone/Firestone announced a voluntary U.S. recall of P235/75R15 size Firestone ATX, ATX II and Wilderness AT tires often found on the Ford Explorer. Firestone is part of Bridgestone/Firestone. In contrast to Firestone’s voluntary recall, for example, the Transportation Department in 1986 asked Volkswagen of America to recall as many as 30,000 Audi 5000S cars built since 1978 amid allegations of sudden acceleration.
Pinpointing the Cause
Gauging consumer safety can often depend on the product involved. In the Tylenol case, for example, the cause of the hazard was clear and, at the same time, consumers could turn to alternative painkillers during the recall.
The issues are trickier with tires, partly because pinpointing the cause of a product defect is more complicated, experts say.
When problems arise with tires, companies not only ask questions about the actual products, but also about any external factors that may have been involved, including negligence by the driver and road conditions, explains Jack Rice, attorney at Arent Fox Kintner Plotkin & Kahn, a Washington, D.C.-based law firm. Rice is former chief counsel to the National Highway Traffic Safety Administration, which investigates car safety defects.
Guilt by Association?
Liability is also a serious consideration for companies in a recall situation. And the cost of the actual recall is just the beginning. For instance, Bridgestone/Firestone has said it would post a $350 million special loss this year and that doesn’t factor in pending civil litigation, which is only beginning to mount.
And in the recall of Firestone tires, the issue of liability is even more complex because two companies are involved — Ford and Bridgestone/Firestone. Not surprisingly, Ford is trying as much as possible to separate itself from Firestone. During a recent press conference, Ford officials said the design of the company’s sport utility vehicles had nothing to do with the accidents. Instead, officials placed the blame solely on Firestone’s recalled Wilderness tires.
But Pittle wonders if worried consumers will take the time to separate Ford and Firestone. In the end, Ford chose Firestone tires for its cars, and from the point of view of consumers, they don’t necessarily buy a body from one manufacturer, and tires from another, Pittle explained. Consumers perceive they are buying the total package of a car, in this case from Ford, he added.
Protecting the Brand
One thing that is clear is that even the appearance of a sluggish, complicated response from a company can turn consumers against the faulty product and subsequently the firm itself.
The attitude of the company’s chief executive and his or her top advisers and the kind of responsiveness they demonstrate can make a big difference to consumers, suggests product recall expert Jim O’Reilly, author of Product Warnings, Defects and Hazards.
In the Firestone case, for example, O’Reilly and UC Berkeley’s Winer argue the tire maker dropped the ball early and did not proactively address initial reports of a faulty product. “Timing is critical,” O’Reilly added.
In addition, Firestone wanted consumers to decipher codes themselves off the side of a tire, they said. Bridgestone/Firestone said, however, it is encouraging owners to go to a Firestone Tire and Service Center for free inspections of their tires, and is offering motorists reimbursements.
“The challenge for Firestone will be to catch up and save their brand,” O’Reilly said. Added Winer: “It wouldn’t shock me if Firestone sales dropped significantly.”
Bridgestone/Firestone officials say they’re encouraging owners to go to a Firestone Tire and Service Center for free inspections of their tires, and offering motorists reimbursements. And Bridgestone/Firestone Executive Vice President John Lampe has said the company is doing the best it can to replace the tires.
Meanwhile, Ford handled the initial crisis differently. Both O’Reilly and Winer said the car maker communicated to consumers that if they were worried about the Firestone tires on their Ford car, they could go to a Ford dealer and the company would address the problem with them. “Ford said, ‘We don’t make the tires but bring them in anyway,’” O’Reilly added.