AAB Plc

In the current economic climate, national reputations have been put through the grinder.  Some countries with strong economic track records have been severely challenged including the US and the UK while other countries with more fragile economic reputations, such as Greece and Spain have been floored by the end of the credit boom party.  I would find the latest economic acronym of PIIGS countries quite entertaining were it not for the fact that behind it lies a great deal of pain for a great number of people.  And as I sit here in Abu Dhabi, I haven’t got to look far to see that issue has not been just a European problem.  It even spread to the Gulf.

But events in the UAE in the last couple of days have revealed a remarkable story of intrigue, hit squads and murder.  It’s gripping and yet appalling and very Shakespearian.  And suspicions have been raised by the CCTV footage indicating this was a well orchestrated operation.  The finger is pointing to Israel and that it was a plan by its secret intelligence service Mossad to execute Hamas’ military chief.  

At this stage no one can be certain of the provenance of the team identified as the assassins.  But if evidence emerges to support the claim it was Israel, I think there is going to be inordinate damage to that country’s reputation on the world stage. 

Israel is no stranger to claims that it’s anything but a good world citizen.  It already bears the burden of Middle East conflict and I can think of no other more polarising topic.  Israel claims its military operations  are defensive and many countries such as the US have stood by Israel’s right to defend its territory and its people.  

But if the Government of Israel approved taking that conflict to a third country - in the Arab world no less - and anointed the operation, then it will damage relations with those countries, particularly with Europe, which has stood by Israel in the worst of times.  UK, France and Germany are all keen to build relations with the oil rich UAE which is set on tracking down the murderers. 

And it makes it very difficult to see how Egypt and Jordan which negotiate a fine line in middle eastern diplomacy remaining mute on the topic.  Could there be no worse challenge for Israel than its prime minister or defence minister being sought by the International Criminal Court for an act of murder?  That’s the threat.  And could there be no worse contribution to the Middle East peace process than the Israel playing a murderous game in the playground of the Middle East?

Who knows who was behind this murder?  But it is absorbing and appalling and sadly casts a shadow over Dubai's status as a peaceful place of cosmopolitan fun and entertainment.  Poor Dubai is struggling to regain its reputation as a viable centre for economic activity.  A blow to its reputation as a leisure destination is one that the UAE authorities, I suspect, will not take quietly.

PRODUCT RECALLS don't come much bigger than a car. We're all familiar with Cadbury's and its salmonella-infected chocolate bars, with Perrier and a host of other consumer products that have flared briefly in the media and public's consciousness, before fading from view down the years.

But while car recalls are nothing new, we're not just talking about any old car here. This is Toyota, an iconic marque, with a long track record of reliability and a reputation as the car of choice for Mr and Mrs Safe of Middle England. A brand with all the qualities you'd expect of a Japanese car that have contributed to its status as the world's largest manufacturer.
 

The problems with the car and the recall programme have been well documented in recent days so don't bear further repetition except to assess their impact on Toyota's brand and corporate reputation in the coming years.

What is almost more notable than the fault itself has been the relentless examination of the Toyota's public relations machinery and how the firm's management is handling a crisis of epic proportions. The general assumption is that the cars will be recalled, the problems will be fixed, motorists will be inconvenienced, but the show will go on. That's a given, the only issue being how slickly or otherwise that technical process is managed.

But how does the firm deal with far darker allegations that it ignored safety concerns for years, and that the faults its has now acknowledged have allegedly led to a number of deaths and scores of incidents of unintended acceleration? And how does it manage  the rising tide of xenophobia and protectionism evident in some of the reporting and reaction?  It took US Transport Secretary Ray LaHood just a few moments to send Toyota shares tumbling on the New York Stock Exchange after advising owners to 'stop driving' their Toyotas - comments he later retracted - by which time the firm's brand and corporate reputation had been damaged, possibly irreparably, at least in the mind of US consumers.

What the Secretary meant, but stopped short of saying, was that Toyotas are unsafe to drive. What could be a worse allegation to make against a car?
 

The CEOs of the US car manufacturers (and their PR teams) must have performed a victory jig round their boardroom tables. They had just been handed a gilt-edged piece of opportunism by a high-profile US politican that allowed them to capitalise on Toyota's discomfort at little or no cost. Expect massive marketing campaigns extolling the virtues of the good old American car, including its competitive pricing against foreign imports, some time very soon!
 

Faced with these odds, Toyota has no choice but to fight if it wants to salvage what it can, rebuild its reputation and start what is certain to be a long, uphill grind to recovery. Rehabilitation, and the consumer and political forgiveness that goes with it, comes at a high price. If the allegations (that safety concerns were ignored) are proved to be true, then the firm's senior directors are going to have to eat humble pie and say sorry, a potentially massive loss of face in a culture where respect means everything. Resignations seem inevitable.

They'll need to win back fickle consumers seduced by rivals with tempting deals and then back reliability messages with hard facts. They'll have to re-engage with the influential motoring lobby, and motoring writers, whose reviews can make or break a car's success. There may be law suits if they can prove that unfounded political allegations damaged their reputation or cost them sales. In short, it's going to be long and messy, with no immediate guarantee of a successful outcome except to the coffers of the reputation management, lobbying, branding and PR consultancies they will inevitably have to hire to support them.
 

Toyota's car crisis differs in one significant way from many other product recalls. Apart from the sheer scale of the recall operation, which means that the firm will be in the headlines for months, this is a global problem in every sense. Global in territorial terms but, of greater concern to the firm's reputation managers, global in a communications context. Bloggers and the many social networking sites are parading Toyota's current embarrassment for millions to read now and will do so for years to come. Toyota will be the butt of cartoons, false allegations, ongoing rumours - every one of which will need to be monitored,  managed and responded to. Skoda, the Czech car manufacturer now under the wing of VW, suffered for decades as the car industry's running joke, its rehabilitation only starting when it made cars (with VW) that actually ran and that didn't rust within a few years.
 

The scale of the task facing Toyota is perhaps best summarised in an article in this week's Economist which acknowledges that the firm has great strengths, including financial ones, but that the firm has lost something precious and may never get it back.
 

This one will run and run - can the same be said of Toyota?