Schwartz Media Strategies CEO Tadd Schwartz shares with the Wall Street Journal his crisis communications plan for Tesla following the tragic death of a driver using the car’s Autopilot feature.
By Ben DiPietro
Tesla Motors gets the crisis treatment this week as it responds to the death of a driver of the company’s Model S sedan, which was hit by a tractor-trailer while in self-driving mode, the first such fatality in the United States. The National Highway Traffic Safety Administration is investigating the May 7 accident. Tesla said the vehicle’s Autopilot system didn’t automatically brake because the truck couldn’t be detected given certain conditions. A second investigation is under way into a July 1 accident.
Tesla was criticized for waiting before disclosing the driver’s death, and Chief Executive Elon Musk totaled with reporters who asked why the company didn’t announce the death before proceeding with a $2 billion stock sale. Mr. Musk said the driver’s death wasn’t material to the company’s earnings, and engaged in heated conversation with people on Twitter. In a June 30 blog post on its website, the company said it notified the NHTSA immediately after it found out about the death.
Using the statements of the company and its CEO, the experts evaluate how well Tesla is handling this crisis.
Tadd Schwartz, president and CEO, Schwartz Media Strategies: “Tesla stresses the importance of using autopilot technology wisely, advising drivers to keep their eyes on the road and hands on the wheel. The automaker should have emphasized those directions in the immediate aftermath of the May 7 accident, rather than keeping quiet.
“A proactive announcement clarifying that the crash was likely due to the driver’s carelessness could have averted this public relations crisis while offering a chance to remind customers how to use autopilot safely. Instead, Tesla withheld the news and found itself on the defense weeks later when the accident became public. The May 18 stock sale exacerbated the problem, creating the perception that information was purposefully withheld from investors. In the world of communications and investor relations, perception is reality and Tesla’s actions—and inaction–eroded trust.
“Lastly, the CEO of a public company should never dodge interviews in favor of waging war with the media on Twitter or via email. Mr. Musk should be responding to the accident with empathy and transparency, if not remorse.”
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