By now, you've seen and heard about the massive safety recalls that Toyota is undergoing. You know that Toyota has had to recall more than 8 million vehicles worldwide for various safety issues, ranging from floormats to accelerator pedals to brakes and, soon, steering systems. At least 34 people (UPDATE: 56 as of 2/28) have died from these issues, hundreds have been injured, more than a thousand have been involved in accidents, and hundreds of thousands have been inconvenienced and are beginning to see their resale values drop. No fewer than 46 class-action lawsuits have been filed against the automaker, with claims ranging from vehicle loss-of-use and lost value to wrongful death.
The National Highway Traffic Safety Administration forced Toyota to stop production and sale of the 8 affected models because, 5 days after Toyota announced the problem with no fix ready, Toyota was still building and shipping cars with faulty parts. And from the day the production halt was announced to the ads Toyota is currently airing, the company has been taking credit for that decision when they were legally forced into it.
Not one day of this entire recall/safety debacle has provided the public with facts that have added up. Few people, if anyone at all, seem to be in on what the issue is, including Toyota itself. Toyota has pointed fingers at CTS, the supplier that builds the accelerator pedal assemblies, saying that CTS was building them with flaws. CTS has pointed its fingers right back, saying that they've built the pedals to Toyota's exact specifications. ABC News released a story showing a college professor replicating unintended acceleration through an electronic fault that failed to show up on mechanical diagnostic equipment. Toyota has questioned the professor's methods.
Congress has hauled Akio Toyoda, grandson of the founder of Toyota and CEO of the company, to D.C. and asked probing questions. Jim Lentz, Toyota North America's COO and President testified, as well, mentioning that it's possible Toyota's fixes may not mitigate future instances of sudden unintended acceleration. Both have vascillated between admitting and denying that Toyota's rapid expansion since the 1990s has contributed to the quality, safety, and oversight problems they currently face. Congress has subpoenaed sensitive whistleblower documents from Demetrios Biller, a former lawyer for Toyota, which showed damning evidence that Toyota willfully covered up safety faults in the past, as well.
Other documents surfaced showing that Toyota took credit for saving $100 million by negotiating with the Federal government to limit the scope of its floormat recalls. Other "safety wins" as described in the document involved the company dragging its feet on recalling defective vehicles, and delaying their meeting compliance requirement for safety equipment.
Questions of what Toyota knew and when they knew it have continued to go unanswered. As information about past Toyota acceleration-related recalls have been released, more and more it appears that the company has taken an extremely active role in suppressing, obfuscating, or denying safety and quality concerns. In 2004, Toyota hired away officials from the National Highway Traffic Safety Administration (NHTSA). From that point on, the NHTSA revised its investigative guidelines to overlook instances of sudden unintended acceleration that lasted 2 seconds or more.
And the hits keep on coming. The day after Ray LaHood, the Secretary of Transportation, accused Toyota of being "a little safety deaf", reports broke that Toyota erroneously printed on its legally regulated window stickers that certain 2010 Matrix models were equipped with knee-protecting airbags. When owners discovered that their vehicles did not have the airbags, they contacted their dealers, who informed them that their cars could not physically be equipped with the features. Toyota then sent each customer a token $50 American Express gift card and a letter of apology.
And news reports have been filtering in about a Minnesota man, sentenced to 8 years in prison on counts of vehicular homicide. He was returning home from church in his 1996 Camry with his pregnant wife when he stuck and killed three people in their car at 90 mph. He claimed in his defense that his vehicle accelerated involuntarily. When he attempted to brake, the vehicle was unresponsive. No mechanical faults were found with the vehicle, so the jury convicted him. That case is now under review.
The torrent of ink falling on Toyota's safety foibles has turned into an overwhelming flash flood. And through the endless reports and the media hysteria, it's been tough to know which way is up. Some have speculated that the Federal Government, fresh from having bailed out GM and Chrysler, is unfairly burdening their biggest competitor with these recalls and investigations. Others see the fever pitched media hype as dubious, recalling the unwarranted panics from the '80s and '90s with Audi and GM safety concerns that turned out to be without merit.
Clearly, Toyota is in trouble. The money spent in issuing recalls, fixing vehicles, stopping production, and lost sales is massive. Even greater still is the degree to which Toyota's once impeccable reputation for quality and safety has been torn to shreds in an instant. But Toyota themselves have not helped their cause. Their PR department, sending at first no information, then a sea of confusing and often self-contradictory information, has been at a loss to control the story. Advertising hasn't helped much, either. Continuing to promote the "Moving Forward" tagline amid the unintended acceleration investigation has shown the company to be shockingly tone-deaf. And releasing a zombie-themed ad for the Corolla in the face of a mounting accidental death toll was clearly a bad idea, too.
Civil and criminal investigations are also proceeding. So there is a sense in which, for all we know now, we've seen just the tip of the iceberg that the Toyota supertanker "moved forward" into.
The short-term aftermath is already making itself known. As mentioned earlier, resale values on Toyotas have dropped. Current owners are saying that they're more likely to consider other brands first at trade-in time. Some publications have predicted that Toyota's February sales will announce Toyota's poorest market share showing in 5 years, with competitors Nissan and Hyundai taking up much of the slack.
The long-term effect on Toyota is tougher to gauge, and it depends greatly on how this mammoth maelstrom changes the company from the inside. If Toyota does make changes to its management structure, its safety and engineering policies tighten, and it lets sunshine in on problems and concerns, they'll certainly take a hit, but they'll recover. The American consumer has been shown to have a short memory span with issues like this.
Ford and Firestone were dealt a blow (or is that blowout?) 10 years ago with the much-publicized Explorer rollover epidemic. The problems weren't quite as deep or wide-ranging as what's coming out about Toyota. But still, all the major publications bought reams of paper by the truckload to report on it. Customers got scared and companies got investigated. And the longstanding relationship between Ford and Firestone was put in serious jeopardy. But now, 10 years later, Ford is growing from strength to strength. Customers are back in droves, bursting with patriotic pride, more than happy to consider the brand's products at purchase time.
So, given enough time, can Toyota recover? Absolutely.
Given the level of corruption, negligence, and incompetence that Toyota has exhibited, should they recover? If they right the ship, yes.
Will they recover? Stay tuned.
As you alluded above, one of the unanswered questions is, "Does Toyota actually know what the root problem is with the unintended acceleration?"
ReplyDeleteThe evidence you present here suggests you feel they might not have a clue as to what the actual problem is. I believe Toyota knows exactly what the issue is(my own hypothesis is the problem is electronic); their disastrous PR attempts seem characteristic of the way Japanese corporate culture tends to handle massive problems such as the one Toyota is facing: Minimize the damage, don't call attention to the problem, and if at all possible, fix it quietly while not admitting guilt. Obviously in this case, it has terribly backfired. As a Toyota owner, I hope they can own up to their mistakes and handle this issue responsibly, i.e. the opposite of how they've been proceeding thus far.