Product recall – business conscience
Authored by: Sean  

The art of apology is a fine one indeed. It can be pretty difficult to do it sincerely when it comes to interpersonal relationships and it can be even more complex when one talks about it in broad terms in the business context. An apology may also take on many forms when it comes to the business domain and perhaps one such form is product recall. What amazes me is how businesses of all kinds spend gazillion dollars in research, testing, feedback and customer surveys and so on and yet, at times, manage to get things terribly wrong. Perhaps one of the ways in which a brand can build deeper loyalty is by admitting a product defect, recalling it and giving the customer something in return.


So when did it all start and why does it continue to happen even today? What are the industries that go through product recall most often? Looking back at major product recalls, it is apparent that the industries that go through or have gone through it in a big way are:


• Pharmaceuticals – Tylenol, Vioxx and Excedrin

• Food – Peanut Corp and its peanut butter, Westland/Hallmark recalling beef

• Electronics – Dell notebooks in the year 2006 and

• Automobiles – more on this as you read on!


The automobile industry has a disturbingly close relationship with product recalls. Probably the very first major incident was the 1959 recall of Cadillac because the metal of the steering linkage was too soft. Several big names of the automotive industry have gone through various kinds of product recalls. Ford, British Leyland, GM, Honda and Toyota are just some of the names here. Two companies that are in the news today because of automotive recall are GM and Toyota.


GM is recalling 2.19 million of several models – Chevrolet Cobalt, Pontiac G5 and Solstice to name just a few – because of ignition key related problems. GM has also faced a fine from the National Highway Traffic Safety Administration or NHTSA . Toyota; the largest automaker in the world; has recalled 6.4 million vehicles of almost 30 different models. Here the problem is to do with airbags and steering defects. According to statistics released by the NHTSA, vehicle recalls is an increasing trend and it has already touched more than a third of the 2004 high of 30.8 million vehicles. This year alone, USA has seen 11 million vehicles being recalled.


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Interestingly enough, not everybody views product recalls as brand dilution. There is absolutely no getting away from the fact that today’s automobiles are complex creatures. They bring together immense engineering, technological and mechanical systems together and some form of product failure can be reasonably expected. Perhaps where the automobile giants can turn this around is to be honest about it and recall their vehicles as quickly as possible, especially when it is a safety defect. Being extra safe about safety is a good thing when it comes to automobiles and their manufacture. And when a business organization is willing to recall its products, even if it costs them a lot of money, it can be one of the best forms of apology ever.


PS – no I do not speak ‘for’ the automotive industry, but was simply thinking about Toyota and GM and how these trusted names are conducting themselves in the world at large!

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