Frederica Freyberg:
Now on to consumer news. An emotional Akio Toyoda appeared before a congressional committee Wednesday. The president of the Japanese car company apologized for mechanical failures that led to the recall of over 8 million vehicles. The recall has sent Toyota owners scrambling for answers and caused a bump in the road for an already shaky automotive industry. According to the state Department of Transportation, there are 333,139 Toyotas with Wisconsin license plates. Twenty-three dealers sell Toyotas in the Badger State. Deborah Mitchell teaches marketing at the UW-Madison School of Business and has been watching the Toyota story.

Deborah Mitchell:
It's great to be here.

Frederica Freyberg:
Clearly a popular car everywhere and in Wisconsin. But as you have been watching this kind of massive recall and the response to it, what has been your reaction?

Deborah Mitchell:
It's fascinating because we're talking about one of the world's great brands, a beloved brand, and for quite a while people didn't really necessarily want to believe that there could be a problem. But now it seems that sentiment is starting to really, really swing the other way. A true backlash hasn't kicked in yet among consumers, so a lot of experts and certain Toyota are waiting to see will that happen. But there's a lot of uncertainty right now about how this is all going to shake out.

Frederica Freyberg:
How would you grade Toyota's response to it?

Deborah Mitchell:
Initially, not an A. In fact, Americans — this is partly a cultural issue, but in this country people can forgive a lot. Consumers are willing to forgive often if leadership comes forward quickly and admits that there's a problem, addresses the feeling of hurt or betrayal or lack of trust that may be engendered by what they have done and then comes up with a plan and assures everyone, we do have a plan, we are going to address this and here's what we're going to do. Those three steps are key. When we've seen corporate leaders follow these three steps, typically things work out fine. We didn't see that in this case initially. So the speed at which the leadership came forward and then the seeming lack of emotion from an American's perspective did not sit well with a lot of Americans.

Frederica Freyberg:
What do you think this does do to the brand in the consumer's mind, a brand that is so reliant on safety and reliability?

Deborah Mitchell:
Well, again, people for many, many years, decades, have come to believe that Toyota stands for world class quality and dependability. And so that's not going to go away overnight. But that brand has taken a huge hit. In consumers' minds now there are many questions that are not going to go away quickly.

Frederica Freyberg:
What about consumers who could potentially be driving very dangerous vehicles right now. Resale is no doubt affected. How have they been treated in your understanding in all of this?

Deborah Mitchell:
Well, once the leadership of Toyota really confronted the problem, they quickly mobilized their dealers. This week they were in Washington meeting with their dealers. Sentiment between the dealers and manufacturers is very, very positive. They have come up with a plan. They've made it as simple as possible for consumers to come into their dealer and have problems fixed or things taken care of. In general, they feel very confident that there aren't big backups, there aren't problems waiting for consumers. They're inviting them, ‘Please, bring your vehicle in, we're here for you.’ So in terms of the dealership, things are good. They want to make sure people know if there are rumors out there that they're going to be treated badly or dismissed in terms of their concerns, that's not the case.

Frederica Freyberg:
Is that anything you've heard?

Deborah Mitchell:
Initially I was hearing some negative rumors, absolutely. I've also heard a lot of dealers say, ‘No, that's not the case.’ It’s a classic PR problem in that, there may be rumors on the Web or among consumers in terms of word of mouth and yet on the marketing side, whether the manufacturer or the dealer, they're saying let us clear these rumors up.

Frederica Freyberg:
What should consumers do if they feel they aren't being heard?

Deborah Mitchell:
There are many routs to be heard. The easiest and quickest, it may not get a response from Toyota, is to put the word out. In this day of social media and the Web, that's very easy to do and many consumers are doing that. They're not sitting by quietly. There are other routes. You can contact the manufacturer directly. You can contact leadership in terms of legislative members of congress or elsewhere. But Toyota is assuring consumers at this point that won't be necessary.

Frederica Freyberg:
Now, there are 23 Toyota dealerships in Wisconsin, and you're saying that the relationship with the company itself is very good. But really how flatfooted does this leave them? It's very difficult presumably right now to sell a Toyota.

Deborah Mitchell:
Right. Luckily, perhaps for them, they were one of the big winners in the Cash for Clunkers promotion this past year. Who knows, that maybe even contributed in part to the sort of lack of readiness in responding to this problem because they really did scramble to have output and be able to meet the demand during Cash for Clunkers. In terms of sales, they had a great year. Things were better for them. Right now it is very bad. But this is not the first time in automotive history there's been a recall. In fact, there have been worse recalls and there have been brands that took a bigger hit perhaps, or at least as bad of a hit that came back. So they are going to have to really weather a tough storm right now. But if the American consumer is willing to forgive them, they will come back.

Frederica Freyberg:
Well, that's good for Toyota, certainly. Thank you very much.

Deborah Mitchell:
You're very welcome.