Toyota and Tiger Woods: Kindred spirits

woods_toyoda2.gi.top.jpgBy Alex Taylor III, senior editor


NEW YORK (Fortune) -- The question is being raised more and more: Can Toyota recover its reputation?

There is no simple answer. The automaker once enjoyed exceptional renown. In addition to being the largest and most profitable auto company on the planet, Toyota was the most studied and copied. Its production system became a benchmark and a model for competitors to emulate around the world.

On top of that, Toyota (TM) was known for always putting the customer first, hence its passion for building cars with the highest quality and reliability. The automaker obsessively studied car buyers to find out what they wanted and then provided it for them. It became a leader in new vehicle segments like crossovers, and new technologies like gas-electric hybrids.

But when a crisis arose in the form of complaints about unintended acceleration, Toyota didn't know what to do. Rather than make a forthright statement about the problem, its history, and its proposed solution, the automaker responded with obfuscation, delay, blame-shifting, and denial.

Not until last August, when a Lexus driven by an off-duty California highway patrolman rolled over and burst into flames, killing the driver and three members of his family, did the issue reach widespread public awareness. And when the time came to apportion responsibility for the incident and outline a new direction for the company, top Japanese executives were nowhere to be seen. When president Akio Toyoda first came forward to take responsibility and promise solutions, he seemed to do so with reluctance.


Compare that to the Tiger Woods scandal. Like Toyota, Woods had a reputation for excellence that far exceeded other golfers.

Like Toyota, Woods was widely emulated for his faultless behavior and superb sportsmanship.

Like Toyota, Woods initially put out a story about his wife, a golf club, and the shattered windows of his SUV that bore little relation to reality.

Like Toyota, the news about Woods' missteps was allowed to trickle out day by day without being effectively refuted.

Like Toyota, Woods refused to make a public appearance to apologize for his misdeeds (and still hasn't), preferring to issue press releases instead.

And like Toyota, Woods promised to mend his ways, without offering any convincing evidence of exactly how he will do that.

Just as Toyota has seen sales crumble and its used car values plummet, Woods has been abandoned by his corporate sponsors and shunned by other golfers.

Does this mean that Tiger and Toyota have seen their reputations permanently destroyed? Witnessed the domination of their respective enterprises ended? Are about to be permanently consigned to the ranks of the disgraced and the second-rate?

The betting here is that the answer to all three questions is "no."

Tiger Woods remains one of the best golfers in history, and assuming he can regain his form and start to win again, his fans will return.

The American public has a short memory, an inclination to forgive, and a willingness to extend second-chances. History is full of examples. After declaring he was leaving politics in 1962, Richard Nixon came back and was elected president in 1968. There have lately been reports that Eliot Spitzer, who resigned in disgrace as governor of New York two years ago, is considering a comeback of his own, thanks to an understanding electorate.

The same is true with Toyota, although the reasoning is more economic and less emotional.

American customers want to buys cars they like, and if they decide they still like Toyotas, they will continue to buy them. Ford (F, Fortune 500) was rattled by the Explorer-Firestone tire crisis in 2001, but it eventually recovered because the Explorer was a popular SUV.

Rehabilitation comes down to dollars and cents. If Toyota can convince shoppers that it still offers a strong value, then they will find their way to Toyota dealers.

The critical ingredient that is still missing from the rehabilitation of both Tiger and Toyota is that convincing personal apology. Tiger hasn't been seen in public since the night of the accident and needs to make a believable account of his behavior along with a statement of his determination to change.

Likewise, Toyota president Akio Toyoda, as well as his management team, must make a complete explanation of their response to unintended acceleration and answer a comprehensive set of questions from outside experts. Only then will its slate be wiped clean, and Toyota will be free to begin the long process of rebuilding its reputation. To top of page

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