Mobile phone company continues difficult road to recovery since battery recall of phones for blowups, fires
By: Brady Coyle, Staff Writer
It seems like Samsung just can’t buy a break these days, in its uphill battle to win back the public.
In September of 2016, Samsung recalled approximately 2.5 million Galaxy Note 7 mobile phones, due to dozens of situations that involved batteries overheating and exploding or catching fire. Samsung SDI claims that the recall cost the company just shy of $7 billion in operating profit.
“It is a measure to put consumer safety first, but we apologize for causing inconvenience,” said Samsung Electronics, in a statement in late September.
The issue came to a head when the United States Department of Transportation and the Federal Aviation Administration banned the Galaxy Note 7 from public transit and commercial flights. Samsung has been trying to reestablish credibility since the recall, but their efforts have hit a slight bump in the road.
A Samsung factory in Tianjin, China, that is responsible for manufacturing power packs for the company, caught fire late last week. Photos of smoke billowing from the building went viral on social media. It seems that the company’s battery issues are far from over.
“[The] material that caught fire was lithium batteries inside the production workshops and some half-finished products,” said the Tianjin fire department, in a statement on their social media account.
Samsung has claimed that the incident was “minor”; however, the photos from outside the factories indicate otherwise. The fire department also sent 110 fire fighters in 19 fire trucks. The tech company has said that batteries that had been discarded in its waste area, started the fire, not ones that were on the production line.
It is certainly bad timing for Samsung, but factory fires in East Asia are not unheard of. Since 2011, there have been three sizeable fires in the region, two in China and one in South Korea. In both 2011 and 2016, the fires took place in factories that manufacture Apple products.
This most recent setback in company image is another challenge in what can only be described as a disastrous six months of public relations for one of the worlds biggest tech companies. Not all hope is lost, though.
Companies can survive major product recalls, but that almost always requires taking accountability. A famous example is when Johnson & Johnson had to recall Tylenol.
In 1982, Johnson & Johnson set the example of perfect Public Relations moves when recalling a product. After seven deaths in the Chicago area were attributed to Cyanide-laced Extra Strength Tylenol capsules, it was predicted that Tylenol’s days of successful sales were done.
“Before 1982, nobody ever recalled anything,” said Albert Tortorella, a managing director at the New York PR firm that was hired by Johnson & Johnson.
Johnson & Johnson managed to come away looking remarkably responsible, thanks in large part to their CEO, James Burke. What Johnson & Johnson did was take accountability for the tampering of Tylenol capsules, recalling a total of 31 million bottles and replacing the bottles with their safer tablets, completely free of charge.
The company spent north of $100 million in its recall and re-launch of Tylenol, but its stock was only hurt briefly. It plummeted after the deaths of seven consumers, but was back up to where it was prior to the tragedies a mere two months later.
It is clear from this example that it is possible for Samsung to pull themselves out of this tailspin and get back on track in competing with their biggest rival – Apple. If consumer safety and care is prioritized, then they can retain the image of being a responsible company and this will be beneficial in the long term.
Whether or not Samsung can reshape its public image remains to be seen, but what is clear is that their next public relations moves are critical.
Following the example that Johnson & Johnson set with their recall on Tylenol is Samsung’s best hope to cure what ails their company image.