The Role of Human

Resources During a Major

Product Recall: TS Tech
Alabama
AAYUSH SETH – 61KB
CHITRA GANDHI – 74KB
VENKATESH KARIAPPA – 82KB
PARICHETA VERMA – 93KB
PUNEET SINGLA – 97KB
RAGHAV SANDEEPKUMAR JHAWAR – 98KB
SHUVAM DAS -108KB
 INTRODUCTION
ABOUT
• TS Tech Alabama, a mid-sized
automotive company in Boaz,
Alabama that supplies all of the seats
for the Odyssey vans and the
Ridgeline trucks
• TS Tech is a Japanese owned
company with manufacturing plants
throughout the world
• Main facilities in the United States are
major Tier I suppliers to Honda. This
manufacturing plant has been in
business 17 years and has won
several awards for quality, delivery,
and service to Honda
RECALL (ODYSSEY)
• The first recall centered on second-row
outboard seats due to problems with the
release levers.
• The second recall dealt with the second-row
center seat and the fact that when that seat
was moved forward using the horizontal
adjuster bar, that bar could also remain in the
unlocked position.
• A cross functional panning committee was
formed to tackle the recall, but HR was not
included.
• Steve, the Human Resource Manager, knew
that during a successful recall, the Human
Resources department would have to be
called in for planning and damage control and
thus asked to be included in the planning
committee
 RECALL
A recall is when a product is removed from the market, or a correction is
made to the product because it is either defective or potentially harmful
Types:
1. When the company discovers the problem and voluntarily issues a
recall of a product
2. A problem is found by or disclosed to a regulatory agency, which calls
for the company to recall the product if the issue is determined to pose
a severe risk to the health and safety of the public

Problems faced by companies due to recall

Financial Issues Company Reputation Internal Problems

• Replacement of parts • Employee retention

• Drop in customer confidence
• Payment of damages due to • Decrease in employee
• Coverage by mass media
defective parts morale
 Takata Airbag Recall
High Employee
Invesigation Turnover
The National Highway Takata initially tried to
Traffic Safety keep their massive
Administration, after an workforce in place,
investigation, found the however, later employees
front airbags made by expressed
Takata are faulty dissatisfaction due to
lack of communication
from Takata
management about the
company’s future and the
fear they had about
losing their jobs

Pleaded guilty Bankruptcy

Takata pleaded guilty to Later in June 2017,

manipulating the safety Takata confirmed they
data and withholding key were filing for bankruptcy
information about the
faulty inflators
 Role of Human Resources during a Recall

TIMELINE
In case of a possible recall, Upper management created a
1 cross-functional recall reaction team to formulate plans as to
what TS Tech would do in the event of a recall
However, there was an initial gap in the planning for abating
2 the fears of the company’s workers.
Steve knew that during the course of a successful recall, the
3 Human Resources department would have to be called in for
planning and damage control.

He had noticed a major flaw in the executives’ process: there

4 was no plan for communicating with employees of the plant
about what this recall would mean for them.

5 Steve thought of all possibilities.

Role of Human Resources during a Recall – Cont.
1 Steve knew that communication would be the key

2 A company at the middle of recall is most vulnerable

3 Steve initiated general planning for a recall in the Spring of 2016

TIMELINE
4 Two stage action plan was prepared from the HR department

The first stage included when, who, and how the information was
5 given to the employees

Transparency was maintained from PR to the entire process

6 workflow as well as the end date of the recall
Steve relayed the employees of no layoffs and a timeline for the
7 recall due to which there was only 4.2% increase in turnover
 Role of Human Resources during a Recall – Cont.

TIMELINE

1 Commencement of Stage 2 from December 2016

2 Continuous status updates to employees about the recall

Constant, detailed communication was the key to reducing

3 these issues
Worked on with management was to create employee
4 retention plans
A contingency plan was put in place with a local agency that
5 provided temporary work- ers in

6 HR has achieved its mission of employee retention so far.

 Conclusion
Retaining the workforce
Employee retention is the make or break for any recall decision. It is the role of the HR to keep the
employees informed, combating misinformation and rumours, retaining employees through incentives
like bonuses, etc., and preparing for the scenario if a large section of employees leave.

Impact on the overall profits

The overall profits were impacted during the year in which the recall costs were realized, but it is
expected to regain its previous levels because of the launch of a new model of Odyssey by the
coming year. This will be helpful in averaging out the profit levels over a longer period.

Planning for the future

Though there was a delay in the process because of a sub-supplier, but once the supply gets restored it
would be a tough task for the HR management as extensive workload would be coming upon the workers
which would lead to employee fatigue impacting the overall turnover. HR management needs to be
prepared for this.
THANK YOU