TRADING in your car usually doesn’t involve signing a confidentiality agreement, but that’s what Ford has asked some of its customers to do before agreeing to purchase their allegedly dodgy second-hand cars.
|Scooped by Steve Hather|
Steve Hather's insight:
Corporate boofhead alert .… Ford fails crisis management 101 (again)!
Just days after an announcement that a group of consumers had launched a class action law suit against Ford Australia as a result of problems with its “PowerShift” transmissions, comes news that Ford had made some consumers sign a gag order in order to trade in vehicles that were having problems.
A number of consumers that purchased Ford’s Fiesta, Focus and EcoSport vehicles sold from 2011 with “PowerShift” transmissions reported the transmissions were “jerky” and in some cases just shut down. Rather than acknowledging and addressing the problem Ford has chosen to stonewall leading to a group of consumers taking their own actions to seek redress.
In the meantime some consumers were able to trade in the affected vehicle – but only after signing a confidentiality agreement.
Ford, like other companies in similar situations, have failed to resolve a PRODUCT problem which has inevitably led them into a BRAND crisis.
When a consumer pays $30,000 for a car, it is reasonable for them to expect “acceleration much smoother than a conventional automatic” which is what Ford claimed as a benefit of the PowerShift transmission. For some consumers, this didn’t happen. Rather than fixing the problem quickly, Ford took the corporate bully boy approach, making consumers fight for their choice of repair, refund or replacement – guaranteed under Australian Consumer Law when there is a “major fault” and then forcing them to sign a confidentiality agreement.
If the resolution was fair and reasonable, what is it that Ford needs to hide in a confidentiality agreement? What’s wrong with it being known that they will actually give the consumer what they are entitled to? What’s wrong with it being known that Ford has actually resolved the problem?
Unfortunately defence is often the first instinct of a company – and very common when the lawyers walk into the crisis management meeting. Deny, deflect, delay … hope it goes away! While I don’t advocate companies compromising their legal position, it should not get in the way of taking fair and reasonable action to resolve a problem. Consumer goods companies – reliant on consumer trust as a key asset of their brand, must first win in the court of public opinion before overly worrying about the court of law. Winning the first battle often means the second is not required anyway!