May 5, 2010 / 9:57 PM / 9 years ago

Repeated recalls threaten sterling J&J reputation

NEW YORK (Reuters) - Johnson & Johnson built a sterling brand name on a corporate responsibility credo that dates back more than 60 years, but a series of recalls that include children’s medicines is threatening that reputation.

U.S. regulators issued a damning report on Tuesday, saying inspectors found thick dust, grime and contaminated ingredients at the J&J plant that produces Children’s Tylenol and dozens of other products recalled last week.

Brand and public relations experts say J&J needs to act with urgency after four recalls in the past year have prompted some to question the company’s control of its operations.

“It’s not just going to go down to the shop floor level,” said a senior industry compliance consultant of the FDA findings regarding last week’s recall. “It’s failure of the quality unit and a failure of management.”

It is an unusual situation for J&J, whose handling of a 1982 Tylenol poisoning scare remains the gold standard for corporate crisis management. At the time, seven people died after cyanide-laced capsules were planted in Tylenol bottles.

Executives repeatedly cite the company’s credo, written in 1943 by Robert Wood Johnson, J&J’s chairman for three decades. J&J’s first responsibility, it says, is to the doctors, nurses, patients and parents who use its products, ensuring that “everything we do must be of high quality.

Chief Executive William Weldon stressed the company’s commitment to those values in January when discussing a recall earlier that month of products like Tylenol and Motrin due to a musty odor emanating from the bottles.

That followed recalls of Tylenol Arthritis caplets and Infants’ and Children’s Tylenol in November and September of 2009.

On Friday, J&J took 40 widely used children’s pain and allergy medications off the market, saying some may have a higher concentration of their active ingredients, while others were contaminated.

“You don’t want another situation where there’s another recall,” said branding expert Robert Passikoff, head of Brand Keys Inc. “There are limits to loyalty.”

100 PERCENT SAFE

J&J so far has taken many steps that crisis management and marketing experts would have recommended: quickly removing the questionable products from the market, halting production, apologizing to consumers, and accepting responsibility.

The company called the issues found by the FDA “unacceptable to us,” in a press release and apologized “to those who rely on our medicines for the concern and inconvenience this recall may have caused.”

J&J’s swift moves and apology stand in contrast to the reluctance of Toyota which recalled cars due to stuck gas pedals and BP, now grappling with an oil disaster in the Gulf of Mexico to follow suit.

“A lot of good comes out of a simple ‘I’m sorry’,” said Laura Ries, president of branding strategy firm Ries & Ries.

“A lot of companies have a hard time doing that.”

But experts emphasized that the diversified healthcare giant must take further steps to soothe the public’s concerns.

“They have to take some extraordinary measures to reassure consumers that their plants are 100 percent safe and not 99 percent safe,” said Seth Faison, a crisis communication specialist with Sitrick & Co.

“This is not a normal situation,” Faison said. “Having the FDA release the kind of report that they did is scary to parents of young children who would be the consumers in this case.”

Aside from communicating with the media, the company has reached out to the wider public using social networks. It has addressed key “mom” bloggers, issued tweets on McNeil’s and J&J’s Twitter pages, and given information on its company blog JNJBTW.com, a company spokeswoman said.

The company also has created a website with information, www.mcneilproductrecall.com.

J&J needs to act as quickly as possible to “identify and assign responsibility to why that plant had such glaring issues,” said Lewis Goldberg, managing partner with KCSA strategic communications. “There was a lack of oversight somewhere, and somebody is responsible.”

J&J’s McNeil Consumer Healthcare unit has begun a comprehensive assessment of its quality and manufacturing systems, including bringing in outside experts.

No serious injuries or widespread damage were reported in conjunction with the latest recall, which makes it less severe than the 1982 scare.

Tylenol’s renown as a healthcare brand will also help J&J weather the recall, Ries said.

“When you have a weak brand and something like this happens it can be absolutely disastrous, but the strength of the brand is really the key here,” she said.

However, the situation could further test J&J if the company turns up more problems that require further recalls, or if parents start to report injuries from the children’s products that lead to lawsuits.

“We’re one day into what potentially is either a big crisis or a non-event,” Goldberg said.

Additional reporting by Ransdell Pierson, and Susan Heavey in Washington; Editing by Michele Gershberg, Leslie Gevirtz

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