As a marketer and former corporate communicator (and a genuine gear head), I have been fascinated to watch the massive auto recall crisis unfolding for Toyota. The company’s recall now covers 8 models (including its most popular, the Camry), covering some 9 million affected vehicles worldwide.

The problem — sticky accelerator pedals — can lead to unintended acceleration, which is unquestionably dangerous and potentially deadly. Reflecting the seriousness of the problem, Toyota took the monumental step of halting production at its factories that produce the affected models, and stopping the sales of those models at dealerships.

You will recall that Audi faced its own problem with unintended acceleration back in the 80s. The Audi brand took many years to rebound from that massive hit to its reputation. To this day, Audi apologists deny that there was ever really a problem with their cars, blaming the crisis on some kind of mass hysteria. I never did believe that, which is why I won’t buy an Audi to this day.

Make no mistake about it, this is an existential crisis for Toyota. For many years, Toyota has stood as the gold standard for quality construction and reliability in the car industry. If Toyota does not handle this crisis just right, its brand reputation may be tarnished for a long time.

Undoubtedly, Hyundai will be the biggest beneficiary of this crisis. With its industry leading 10-year warranty, Hyundai is already taking a big bite out of Toyota’s and Honda’s sales with excellent quality, interesting designs and superb value. Following Hyundai’s windfall, look for Honda, Ford and GM to also get nice sales boosts from Toyota’s misfortune.

Some have already criticized the absence of advertising from Toyota to inform affected owners what to do with their cars and how to protect themselves. In fact, earlier this week I was listening to a NPR interview of an auto industry analyst who said she was amazed that even at that point, Toyota had not really told people what to do with their cars. (Update: The WSJ reports today that Toyota will start running an "open letter" ad on Sunday, Jan. 31 to respond to consumer concerns over the recall. It’s about time.)

For example, is it safe to even drive the affected Toyota models at all, before owners can take them to dealers for the accelerator fix (and that won’t happen for a few weeks yet)? It is pretty remarkable to me that the auto analyst had to even ask that question.

Yes, Toyota did the right thing in shutting down sales and production of the affected models. But, in the meantime consumers are worried and wondering what to do. For many people, that Toyota automobile is their only transportation, which means it is their lifeline to the world.

This truly is Toyota’s Tylenol moment. How they manage this crisis will affect their brand — positively or negatively — for years to come. Back when Tylenol had to pull all of its product because of tainted pills, it was lauded for acting fast and focusing single-mindedly on the safety of consumers. Toyota needs to demonstrate that same focus and commitment in every move it makes during this unprecedented crisis.

Some of the basics of crisis management bear remembering at this critical moment for the Toyota brand:

• Over-Reacting is Fine, Under-Reacting is Disastrous — In a serious crisis like the one Toyota faces today, it’s important to demonstrate to your stakeholders and the public overall that you are taking it dead-on seriously. That frequently requires an appropriate "over-reaction" to the problem. The worst thing you can do is under-react, even if your motivations are correct and noble. People need to see that you care emotionally and that you are doing everything you can to fix the problem and protect their interests — at all costs.
• You Should Also Over-Communicate — Toyota owners and potential buyers want and need timely, helpful information and guidance. They are starving for it right now. The fact that many affected Toyota owners don’t really know if they should or can drive their cars at this time is an unbelievable problem. Don’t be afraid to over-communicate in a crisis. People will thank you for it.
• Stay Open and Transparent – A crisis is exactly the wrong time to pull back and circle the wagons (even though it is a natural instinct to hide under the covers when something really goes wrong). Toyota’s customers and stakeholders, and the authorities, will be watching very closely in the days and weeks ahead. Congress is already talking about hearings about the Toyota recall. Bring even more sunlight than usual in a crisis. It shows you have nothing to hide and that is always reassuring to your stakeholders.
• Put the Public’s Interest First — This is the most important tenet of effective crisis management and communications. It is what got Tylenol through its existential crisis, and it can do the same for Toyota. Of course, you might ask why one even needs to be reminded of this, but you probably already know that it bears repeating…over and over again. If the affected company really does stay true to putting the public’s interest (and their safety and well being) first and foremost in every decision they make during this crisis, then they will live another day to compete and thrive in the marketplace. Tylenol certainly did and Harvard University crisis case studies attest to that fact.
• Use Social Media – This really is another Twitter Moment. Social media was literally made for this kind of problem. I noticed that Toyota is tweeting about its FAQs for the recall, and that is a good move on their part. Toyota needs to use it social media presence and channels to keep its visibility high, and consumer engagement and communications even higher. If ever there were a time for a company to foster an open, ongoing social media conversation with its customers (and all stakeholders), now is clearly that time for Toyota.

The world is now watching Toyota. This is now their moment to do the right thing, or to let financial, business and legal motivations steer them in the wrong direction. If some news reports are correct and Toyota has been trying to shift blame to CTS, the manufacturer of the sticky accelerators, that is an extraordinarily bad sign.

An AP story from this morning reports the damning news that both dealers and owners are still in the dark regarding how to fix and what to do about their affected cars. This really is a bad sign for Toyota.

The Toyota crisis is an historic business case study happening in real time. Stay tuned.

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