Y2K glitches expected to dent calm in auto industry

LOUISVILLE: While the auto industry had a rare good year in 1999 when it came to crisis communications, Y2K won’t be anywhere near as quiet, the Institute for Crisis Management predicted last week.

LOUISVILLE: While the auto industry had a rare good year in 1999 when it came to crisis communications, Y2K won’t be anywhere near as quiet, the Institute for Crisis Management predicted last week.

LOUISVILLE: While the auto industry had a rare good year in 1999

when it came to crisis communications, Y2K won’t be anywhere near as

quiet, the Institute for Crisis Management predicted last week.



The institute, which tracks news reports from more than 1,500

publications and wire services, found that the number of auto industry

crisis events dropped 20% from 1998 levels. But Larry Smith, president

and new owner of the institute, warned that Y2K-related glitches will

likely contribute to a 13% increase next year.



Smith attributed the 1999 drop to fewer reports of labor problems and a

33% drop in stories about product defects or recalls.



The auto industry’s crisis record has not been stellar as of late. Over

the past five years, it has surpassed all other industries in several

crisis categories, including number of executive dismissals, labor

disputes and sexual harassment charges.



Roughly 84% of 1999’s auto crises in 1999 were what Smith called

’smoldering events,’ which often involve human resource issues. ’If

spotted early, you’ve got a lot more time to deal with them,’ he said.

’In this industry, companies need a management early-warning

system.’



The institute found that 51% of crisis events resulted from management

actions, 28% from employee actions and 21% from other causes (e.g. fires

or natural disasters).



Sexual harassment claims are a good example of a crisis which, if not

addressed promptly, can turn into a larger crisis for an automaker.



Mitsubishi’s Illinois facility, for one, was plagued by these incidents,

contributing mightily to the industry’s 400% jump in sexual harassment

reports over the past five years. By comparison, labor crisis reports

grew 80% over the same stretch.



Smith, who has worked for the institute for five years, recently bought

it from Bob Irvine, who founded the institute in 1989. Irvine, 62, will

remain with the organization as a senior consultant while working on his

third book about crisis issues.



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