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Michelin Throws Money at Formula One PR Disaster

In unprecedented move that could cost nearly $20 million dollars, Michelin Tire Co. is offering fans who attended the June 19 Formula One US Grand Prix race in Indianapolis a full refund. The average ticket price was $100.

The move is a response to a PR disaster for Michelin and Formula One after Michelin discovered a design flaw on the day of the race that made its tires unsafe. Race rules prohibit teams from changing tires after qualifying and the governing body refused to make an exception. So the public was deprived of the race.

Is throwing money at the problem the answer? Very doubtful. Testing and re-testing the tires before an international event was the answer. And it's too late for that.

Michelin Needs to Own Safety
Sure, Michelin will get back some good will. But the issue is not likely to go away among racing enthusiasts, who are opinion leaders in tire buying decisions. I used to have Michelins on my car, and one of the reasons I spent the extra money on them was that they were safe enough for race car drivers to use them.

Michelin needs to make its name synonymous with safety again. A blog on safe driving, as well as some cool virals, would be a way to begin.

Lawsuits had been filed by fans who claimed Michelin was “responsible for not producing the type of event advertised." Said Sports Law Blog "Expect some refunds to be issued and for this to all go away."

Formula One has been trying for years to build an audience in the US and to attract sponsors for TV broadcasts. However, as
Popular Mechanics notes, "F1 is the most boring racing on the planet."

Formula One president Bernie Ecclestone said, "The future for Formula One in the U.S. is not good."

Categories: Public Relations

BL Ochman | Jun 30 05 5:50 | TrackBack (0)

Comments

I think they made the right move by offering refunds, frankly that is the least they could do. They do need to do more, but this is an important first step and they need to be very public about the refund and make it easy for fans to recoup their loss. They should probably also take the step of doing something extra for the fans who were deprived of the race, maybe a gift certificate for new tires.

Personally, I could care less about racing and hadn't heard of this until reading your post.

Posted by: Usher Lieberman at June 30, 2005 7:28 PM

Formula One president Bernie Ecclestone said, "The future for Formula One in the U.S. is not good."

Nor will it be good as long as Ecclestone makes sexist comments about Danica Patrick.

Posted by: Ike Pigott at June 30, 2005 7:33 PM

Tony George has done well PR-wise out of this, especially as he's got to be at least as much to blame as Michelin and the FIA for that surface he allowed on the track.

Posted by: Mary-Ann Horley at July 5, 2005 6:27 AM

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About BL Ochman

Blogger, social media strategy consultant to Fortune 500 companies, and sought-after corporate speaker B.L. Ochman heads the creative team of whatsnextonline.com. She also publishes the Ethics Crisis blog for SRF Global Translations

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