Tesla Motors Inc (TSLA): Where Even Bad News Can Turn Out Good

Tesla Motors Inc (NASDAQ:TSLA) has not encountered too much in the way of bad news over the last several months, as its stock shot up 300 percent, its balance sheet showed its first profit in 10 years and its Model S sedan got a near-perfect score from the very discriminating Consumer Reports crew. Yes, CEO Elon Musk and the people  putting out the all-electric luxury vehicles are had a very good 2013 so far. You might say it is leading a charmed life about now.

In fact, one could make the case that the life of someone working at Tesla Motors Inc (NASDAQ:TSLA) is so charmed  that even when something bad does happen, it still is turned into a positive ore the company. And in this particular case, it seems that the Tesla PR machine knows the right buttons to push in situations like this and it can be a model for other companies as to how to handle a crisis.  Because, yes, for one of the few times this year, we are writing about a piece of negative news. But you likely won’t even notice it on the markets.

Tesla Motors Inc (NASDAQ:TSLA), already known for being a bit unconventional in its business practices, is again taking an unconventional step by publicly announcing a voluntary recall of about 1,200 Model S sedans that were produced after a four-week period that ended June 8. The recall, which accounts for 6 percent of annual projection unit sales for the company this year, involves what is described as a weak mounting bracket latch on the left side of the back row of seats.

Tesla reportedly will pick up the recalled vehicle and return it within a few hours with the new seat bracket. If needed, the company will offer a loaner Model S in the interim. The recall comes  in a proactive fashion in that the company is doing this without  having any complaints or reports of injuries or lawsuits from the problem. It just decided to do this on its own. Why is that unconventional?

Place this in juxtaposition with the recent massive Jeep recall that affected millions of vehicles with risk of fire and that recall is being handled very reactively can you kind of get the sense that Tesla Motors Inc (NASDAQ:TSLA) has a handle on its public-relations and knows what works and what doesn’t for the sake of the brand. What do you think about how Tesla is handling the recall? Is there a way to make a recall a positive thing for a company? Do you think Tesla Motors will be affected adversely by this? Give us your feedback in the comments section below.

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