Shadow Over GM Recall Grows Longer

 Shadow Over GM Recall Grows Longer

THE PR VERDICT: “D” (PR Problematic) for GM.

The news from General Motors continues to get worse. Last month the carmaker began a worldwide recall of over one million of its vehicles, including the Chevrolet Cobalt and Saturn Ions, due to faulty ignition switches that resulted in 12 deaths. Then, a federal review of those GM vehicles dating from 2003 to 2012 found that faulty airbags were responsible for an astonishing 303 deaths.

Lawmakers are pressing for answers as to how long GM knew about the issues and what they did about them. GM’s answer has been to launch what chief executive Mary T. Barra calls an “unvarnished” investigation. Leading this investigation will be the law firm of King & Spalding – the same firm that had been defending GM in wrongful death lawsuits.

Conflict of interest? Whether it will be in reality or not isn’t really the question. The firm will have to do enough digging to preserve their reputation while still being able to call GM one of their main clients. But if anyone asked internal PR what this move would look like to the outside world, GM apparently ignored that information as well.

THE PR VERDICT: “D” (PR Problematic) for GM.

THE PR TAKEAWAY: Even in times of triage – perhaps especially so – appearances matter. When faced with a product issue that has resulted in death, companies must quickly go into damage control. The smartest take immediate measures to prevent further injury or loss of life, own up, and set their PR firms to work on image rebuild. In GM’s case that time is over. And ironically, the company’s goal – preserve the bottom line by presenting the image of taking action – can shoot itself in the foot with the implication of more coverups, this time by the company’s trusted law firm. It’s an action, but it’s hardly a strategy, and it may cause more damage than it controls.

Lululemon Bends Over Backwards After Yoga Pants Recall

 Lululemon Bends Over Backwards After Yoga Pants Recall

THE PR VERDICT: “D” (PR Problematic) for yoga apparel company Lululemon.

Yoga outfitter Lululemon has found itself in a compromising position. The company, a fast-rising star in the competitive world of athletic apparel, had to recall its signature black Luon yoga pants after they were found to be “too sheer” causing embarrassment for yoginis showing off more than a good downward dog.

The recall generated widespread coverage in the business and general press, not only because it gave rise to some great headlines but because there is stiff competition in the world of yoga apparel. Lululemon after all, is well known for keeping stocks deliberately lo, to create buying fervour. Well-known yoga instructors are enlisted as “Lululemon ambassadors.” One does not merely buy clothes at Lululemon; the company is known for its cult-like following and creation of a lifestyle brand.

Lululemon’s stock took an 8 percent hit on the news of the recall and as the company looks to expand beyond it current 200 stores in Canada and the US, there are signs of ongoing growing pains. See-through pants and non-colorfast tops have led to questions about management and some worrying financials: a $20 million loss in first quarter sales, and stock price that is down 18 percent for 2013. The company’s plans for future expansion look like they could be running into trouble.

THE PR VERDICT: “D” (PR Problematic) for Lululemon and the stresses it has placed on yogini brand loyalty.

THE PR TAKEAWAY: Own up, take action, and restore quality quickly. When  a company positions its brand as a “friend” it must bend over backwards to avoid making  enemies and in this crisis Lululemon didn’t hesitate to apologize, clear shelves of the sheer pants, and offer refunds. But as Lululemon’s yoga pants retail for $98 a pair; fans are buying the promise of high quality and when that fails, watch the cult-like following turn and buy the competitors’ less expensive apparel. What’s needed now after the refunds and recalls are completed,  is to assure yoginis and stockholders, that a review of suppliers and management controls is taking place and permanent changes have been made. In other words, strike a pose of action.