Corporate reputations sinking branding?

KEY IDEA: Trusted corporate brands are being exposed as companies that are putting profits ahead of product quality and safety. Will these continuing issues lead to a mistrust of consumer brands?

The news for Boeing is not good. According to a NY Times expose the jet manufacturer is sacrificing quality for sales. Among the revilations of the Times in-depth investigative report:

  •  The factory, which makes the 787 Dreamliner, has been plagued by shoddy production and weak oversight that have threatened to compromise safety.
  • Boeing pushed its workforce to quickly turn out Dreamliners, at times ignoring issues raised by employees.
  • Qatar Airways stopped accepting planes from the factory after manufacturing mishaps damaged jets and delayed deliveries. 
  • Workers have filed nearly a dozen whistle-blower claims and safety complaints with federal regulators, describing issues like defective manufacturing, debris left on planes and pressure to not report violations.
  • Faulty parts have been installed in planes. Tools and metal shavings have routinely been left inside jets, often near electrical systems. Aircraft have taken test flights with debris in an engine and a tail, risking failure.

As one former employee said “in my view the problems at Boeing arose when it moved its headquarters to Chicago from Seattle, separating upper-level management from the aircraft factory. At that point, the main focus became the bottom line and increasing profit rather than producing fine airplanes. A real shame and an example of what is wrong with today’s savage capitalism”.

Ouch.

Let’s be clear. Boeing moved production of the 787 Dreamliner from Seattle to Sout Carolina to save money. No unions…no high labor costs. This story comes on the heels of two 737 Max 8 crashes that have claimed hundreds of lives.

Boeing is not alone in corporate misdeeds. Well’s Fargo finally gave their CEO the golden boot after a number of scandals and the CEO of the drug giant Pfizer just got offered s $61 million dollar pay package while people struggle to afford Rx drugs.

What do consumers think about all this and how will it effect branding?

We have already seen several brands struggle to maintain market share in grocery stores as private label products replace them. Brand loyalty with auto brands is declining, and even top brands like Whole Foods are being raked over the coals for high prices and wrong products.

This means that ordinary consumer brands are going to have to work a lot harder to earn the trust of their customers. The days of ignoring complaints from customers are coming to a swift end, and brands are going to have to ensure that they don’t do anything that jeopardizes their equity.

Under the current administration, a lot of business regulations have been removed as businesses continue to worship earnings at the expense of product safety. It’s going to trickle down…it’s just a matter of time.

Corporate reputations sinking branding?

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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