Are you following the Toyota saga?

If you watch the news, read the paper or listen to radio, no doubt you are aware of the public relations nightmare that Toyota has faced the last several weeks. Once the hallmark of quality, recent problem after problem leading to 8.5 million cars being recalled has severely damaged a reputation for quality Toyota built up over the last 25 years.

Toyota stock has fallen approximately 22% during this time period. The company has provided fodder for several nights of Leno and Letterman and now owners are even contacting their insurance companies to make sure their Toyota is covered in an accident.

Hyundai, Ford, GM, etc. have all been the beneficiary of this horrible publicity. Sales spiked in January for most of Toyota's competitors.

Can Toyota recover from this mess? No doubt Toyota will solve all their qualtiy problems and return to building a quality product. But will Toyota ever regain the reputation that it once enjoyed? My guess is that Toyota will get it's stellar reputation back but it will take several years. In the interim, Toyota's problems represent a "significant opportunity" for the american automobile industry.

What is the point of my blog?

First, the big banks have all had their reputations damaged. Irresponsible investments, huge bonuses, irresponsible lending, etc. have given the big banks a real "black eye." There has never been a better opportunity for community banks and credit unions to take core deposits from the big banks.

How will your institution respond? Are you investing in the people, products, technology, marketing, etc. that will enable you to capitalize on this opportunity?

Second, just like Toyota, the reputation of the big banks will be restored over time. They will spend millions of dollars on advertising to restore their image, they will poor money into supporting community projects in the markets they serve and they will continue to invest in people, products, technology, marketing, etc..

Point being, the window of opportunity for community banks and credit unions will not be open forever. The time to respond in now!

Have a great week/weekend!

Mike Witsken

PS - I am slowly getting over my Colts Super Bowl loss and already looking forward to next season.