Christopher J. Tennyson

UPDATE: Peloton Recalls Its Treadmills, Apologizing for Earlier Rejection of CPSC Recommendations

How Does Today’s Mea Culpa Change the Outlook for One of America’s Fastest Growing Companies?                    

5/5/21 – – Peloton and the U.S. Consumer Product Safety Commission (CPSC) today announced a recall of all Peloton treadmills. Characterizing the company’s earlier push-back against CPSC’s recall recommendation “a mistake,” Peloton CEO John Foley issued this statement:

The decision to recall both products was the right thing to do for Peloton’s Members and their families. I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+. We should have engaged more productively with them from the outset. For that, I apologize. Today’s announcement reflects our recognition that, by working closely with the CPSC, we can increase safety awareness for our Members. We believe strongly in the future of at-home connected fitness and are committed to work with the CPSC to set new industry safety standards for treadmills. We have a desire and a responsibility to be an industry leader in product safety.

Several of my blog posts have chronicled this fast-growing company’s response to issues that had the potential to explode into crises. For the most part, I have praised CEO John Foley’s responsiveness and decisive actions. While today’s apology and offer to buy back all 125,000 of the $4,200 Peloton treadmills in use are laudable, the initial decision to reject evidence of a product defect (one child died and 29 other people were injured) places the future health of the company in jeopardy.

Peloton now is by every definition in crisis mode.

I ended my March 18, 2021, blog post (“Peloton, Pedaling Ahead of Crisis, Issues Warning Regarding Its Treadmills”) with this warning of my own:

So, I am impressed with Peloton’s proactive response, with one caveat: It’s impossible to accurately grade Peloton’s strategy without knowing the details of the accident  (a child died after being pulled under a Peloton treadmill). Hopefully for Peloton, its customers and its shareholders, this death was not caused by a product defect. If different facts were to come out in court, the harm to Peloton and Foley’s credibility would be devastating. The stock would fall by a lot more than 5%.

At this writing, Peloton shares are down more than 13%.

https://www.cnbc.com/2021/05/05/peloton-recalling-all-treadmills-after-reports-of-injuries-one-death.html

https://www.cpsc.gov/Newsroom/News-Releases/2021/CPSC-and-Peloton-Announce-Recall-of-Tread-Plus-Treadmills-After-One-Child-Death-and-70-Incidents-Recall-of-Tread-Treadmills-Due-to-Risk-of-Injury

UPDATE 1/6/23 – – https://www.wsj.com/articles/peloton-to-pay-19-million-fine-over-treadmill-recall-11672940211

Published by Christopher J. Tennyson

Christopher Tennyson brings more than 35 years of experience in major agency and corporate environments to his work as a senior communications and crisis management consultant. He has advised a broad range of high-profile companies, institutions and individuals in diverse industries, including real estate, retailing, consumer products, energy, education, art, sports and finance. Tennyson served as senior vice president and senior partner at the international public relations firm FleishmanHillard (FH), heading the New York Corporate and Public Affairs Group. His FH crisis team won the 2008 Public Relations Society of America Silver Anvil for best crisis communications program, supporting a major food product recall. Prior to joining FH, Tennyson was a principal in the Michigan-based public relations firm Seyferth, Spaulding, Tennyson, and served as senior vice president, corporate affairs, for The Taubman Company, whose interests included the international art auction house Sotheby’s (NYSE:BID), the Woodward and Lothrop and John Wanamaker department store chains, A&W Restaurants, the Michigan Panthers of the U.S. Football League and Taubman Centers, Inc. (NYSE:TCO), a leading retail real estate developer and manager. Tennyson began his communications counseling career with the international public relations firm Hill & Knowlton, advancing from copywriter to vice president and director of the agency’s Issues and Corporate Advertising Unit in the New York office. A graduate of Syracuse University, Tennyson has been a visiting lecturer on leadership and crisis communications at the Wharton School and an adjunct professor at New York’s Fashion Institute of Technology. He is co-author of “Driving Crisis Communications in a 24/7 Digital World,” featured in the PR News Crisis Management Guidebook, Vol. 3. Tennyson also co-authored entrepreneur Alfred Taubman’s New York Times best-selling memoir, “Threshold Resistance – The Extraordinary Career of a Luxury Retailing Pioneer,” published in 2007 by Harper Collins.

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