By on February 9, 2010

The gentlemen at Reuters asked me to pen an op-ed on the Toyota situation (as of last weekend) for them, so I did. My conclusion, in a sentence:

If there’s a lesson to Toyota’s tumble, it’s that easy assumptions aren’t enough to keep you safe on the road, or in the showroom.

Read the whole thing here.

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39 Comments on “TTAC At Reuters: “Toyota’s Exceptionalism Came Back To Bite”...”


  • avatar
    xyzzy

    Bravo Edward. Articulate, balanced, and hit the nail on the head.

  • avatar
    Cammy Corrigan

    I agree. Excellent, balanced article. You argued that maybe Toyota’s reputation was due a correction but this whole media frenzy is unwarranted.

    Also, that picture you use, makes you look like a thug!

  • avatar

    Toyota has millions of satisfied customers. They can take the hit.

    • 0 avatar
      86er

      Are you saying they’re “too big to fail?” ;)

    • 0 avatar
      mikey

      I agree, Mr Farago,they can indeed take the hit. I also believe, that you and I both know that same attitude didn’t bode so well for the former big three ,now did it?

    • 0 avatar
      baldheadeddork

      Come back in six months Robert and we’ll talk about what’s happened to Toyota’s average incentives per vehicle and where their profits have gone.

    • 0 avatar
      Robert.Walter

      If these recalls and media had happened to any other OEM, it would be sliding into bankruptcy … residual reputation and hope are mitigating worse damage to Toyota’s rep.

    • 0 avatar
      Brian E

      So does GM. What does THAT mean?

      Toyota could have taken the hit if they had managed this disappointing. They didn’t. Now they’re commercials telling me how they’ve failed me and how disappointed I am. If that isn’t a way of destroying their own reputation, I’d like to know what it is.

    • 0 avatar
      rnc

      And at this point they have millions of unsatisfied customers, who bought cars in a time frame that Toyota knew they were selling them defective vehicles. The full impact won’t be known until those 3-5 year loans are paid and new vehicles are purchased, that’s when we will be able to trace migration.

  • avatar
    levi

    “… if Toyota hadn’t enjoyed its reputational advantage, the current recalls would hardly have raised an eyebrow among consumers and the media. For proof of this, we need only look to last week’s recall of nearly a million Chevrolet Cobalt power steering systems, which addressed a loss of control comparable to Toyota’s unintended acceleration, but garnered little of the media attention lavished on the Toyota recall.”

    Great insight. Very balanced. Keep up the good work.

    • 0 avatar
      rnc

      As the comment on Reuters pointed out, there is no actual recall for the cobalt yet and that it doesn’t make the car undrivable, at this point it’s being looked at as a noise issue.

  • avatar
    baldheadeddork

    Good piece, Edward.

  • avatar
    Christy Garwood

    Edward, good piece of writing.

    I realize it is the op-ed page, but I believe the Cobalt does NOT have a power steering recall. There are ongoing investigations into complaints but no recall that I could find.

    Yes, I work for GM, but it is easy to check public records to see if in fact the Cobalt has a recall.

    • 0 avatar
      Robert.Walter

      @Christy, I’m surprised there is not much talk of Cobalt’s EPS being produced by JTEKT, a Toyota-subsidiary.

    • 0 avatar
      psarhjinian

      True, but the supposedly-ok pedal was from Denso, whom Toyota also owns.

      Who “owns” Cobalt steering issue depends on the same not-quite-answered questions as the Toyota pedal: a) did the supplier get stuck with a problematic design or did the OEM get stuck with a bad part, and b) is the end product the responsibility of the OEM anyway?

    • 0 avatar
      th009

      The ultimate responsibility always lies with the manufacturer whose logo is plastered on the grille of the car. Whether they are at fault or the supplier is can be debated, but ultimately they are responsible for both their own designs and their selected suppliers’ quality.

    • 0 avatar
      Robert.Walter

      @psjar and th: Nice theory. Nice words. Neither representative of the situation that awaits an OEM supplier who causes a recall; I Know this from Direct Experience.

    • 0 avatar

      I’ve sent a correction to Reuters requesting that they replace the word “recall” with “NHTSA investigation.”

    • 0 avatar
      psarhjinian

      Nice words. Neither representative of the situation that awaits an OEM supplier who causes a recall; I Know this from Direct Experience

      My point is that it’s not easy to see where the dart will land. I don’t have automobile manufacturing experience enough to say, but I recall from, say, the Capacitor Plague that it’s the integrator/OEM and not often the supplier that bears the brunt of the PR damage.

      Sure, there will be intercompany legal repercussions and maybe mention in a calss, but it’s not the supplier who’ll have to meet the press and the public, or at least to the same degree. CTS and JTEKT aren’t household names; not even the likes of ZF, Delphi or Getrag are. About the only time I can recall a supplier getting pilloried is Firestone, and again that’s probably because of the name recognition: had it been Hankook or Wan Li I suspect Ford would have eaten far more of the bad press.

      The Cobalt steering issue might be JTEKT’s fault, but Pedalgate might be CTS’s. Would it really matter?

  • avatar
    Dynamic88

    I think they can take the hit, but now they have more to deal with – unintended veering on Corollas. I wonder if it’s related to the too short power steering hose?

    I think they’ll just spend whatever it takes to make the cars right – cars made right are their whole reason for being.

    Remember too, this isn’t costing the customer anything out of pocket.

    If customers do more research won’t they still end up buying Toyotas? I mean, they still make a damn reliable vehicle for the most part. At the price of a Toyota is there really anything more reliable?

  • avatar
    97escort

    For extra cautious Toyota driver, a high-speed death:

    http://www.reuters.com/article/idUSTRE6183UL20100209

  • avatar
    jkross22

    Ed, Excellent article.

    If this recall had been a one off and Toyota had handled it in a way consistent with the sludge problem (i.e. keeping it on the down low), we wouldn’t be having this discussion.

    Toyota blew it – the perception is that they didn’t come clean when they should have (or at least that’s the narrative that played out in the public). Americans are willing to forgive mistakes, but if the mistakes keep happening, we have a nasty habit of switching loyalties. Just ask GM, Ford and Chrysler.

    • 0 avatar
      Roxer

      I totally agree – but with the way the Chinese economy is going and their hunger for cars, who cares about American car buyers? Focus on china and the money will flow like never before. Maybe Toyota will move their factories to Canada and remove thousands of employees from jobs in the states – will that ever happen? No. But it is interesting to think about.

  • avatar
    Adub

    Good editorial, although I agree you need a better picture (less thuggish).

    After all, you are the editor of one of the more reliable automobile-related websites, and have penned editorials appearing in places like the NY Times. At least put on a shirt with buttons and smile!

    As for the “Old lady killed by Camry” story link, the situation was very unfortunate and I wish her family all the best in their lawsuit against Toyota.

  • avatar
    Robert.Walter

    Anybody remember the “House of Quality” aspect of QFD (Quality Function Deployment)? This was a tool (good for both initial design as for value-re-engineering exercises) for matching the ‘what is wanted (by the market)’ with the ‘how to do it (correctly and cheaply)’ it was made famous by japanese manufacturers …

    All the recent problems at TMC gave me cause to a) realize TMC seems to have the ‘whats’ right and the ‘hows’ wrong, and b) wonder if HoQ or QFD are in use anymore….

  • avatar
    Steven02

    I think the article was good, but I think the comparison to the Cobalt is a bit odd. I am not sure that it is recalled yet, but from my reading, it soon will be. But second, I think that it is far easier to know what to do when you lose steering. You hit the brakes and slow the car. I have talked to several people about the Toyota issue, and almost no one says they would put it in neutral.

    Also, as you state that the UA incidents could have been prevented. That is untrue. The outcome could have been different, but the UA incidents would not have been prevented.

  • avatar
    Telegraph Road

    Very well written, Edward.

  • avatar
    lawstud

    Shifting the car into neutral?

    Having experienced “unintended acceleration” in my Buick I can tell you that its not that easy. I was in a parking lot and hit the brakes only to go faster. I was in bewilderment that they weren’t working and I couldn’t look down to see since I was going too damn fast through the parking lot to take my eye off, I kept going. I steered like a mad man to avoid hitting this car only to swerve onto the main road narrowly missing another car. I then just kept my feet off both pedals until coasting to a stop alongside the road. Mechanic said my brake booster was broken…. Was it me, I don’t know. But when you expect to stop hitting the brakes and you go faster right at somebody switching to neutral isn’t going to help much in that instant when you’re trying to figure how not to hit them and to accelerate even more.

    10 people in Santa Monica weren’t so lucky, the guys Buick accelerated to +80mph through a crowd of people, killing them and running over others.

    http://www.cnn.com/2003/US/West/07/17/farmers.market.crash/index.html

    • 0 avatar
      rpn453

      Having experienced “unintended acceleration” in my mother’s Sunfire GT (aftermarket floormats) I can tell you that it is that easy, provided it’s something you’ve thought about before; and it is something you should have thought about before since it’s not that uncommon. When it happened, I instantly hit the brakes and put it in neutral.

      Of course, in my younger automatic-transmission-driving days I also tended to shift to neutral during any hard braking in less than perfect conditions, so it’s something I had done a hundred times before, though in much different situations.

  • avatar
    Potemkin

    Toyota may be able to take this hit but the gas pedals and brakes are just the tip of the iceberg. I have no doubt that for years Toyota has used the Detroit 3s playbook and used their lobbyists and huge advertising budget to block or mitigate reports of quality problems with their products. Like Detroit things will catch up with Toyota and this may be the beginning.

  • avatar
    CarPerson

    I respectfully disagree that Toyota can just ride this out.

    When Toyota embarked on a mission of world automotive domination, they grew fangs and claws for the job ahead.

    We’re now at a point where several very powerful organizations are clamoring to be first in line to de-fang and de-claw Toyota.

    This is a car company deep in the jaws of getting its heart ripped out of it. This whole deal will total up be a watershed event that will spit out a different car company then what went in.

    Wait for it.

  • avatar
    zoneofdanger

    I liked the 1989 Camry ad you included: it reminded me of my 1989 Camry LE V6, which was an exceptional, high quality car. It drove well, had lots of nice features, was comfortable and felt the opposite of cheap. It was pricey for the time: the sticker was about $19K, which isn’t much less than the MSRP of a bare bones 2010 Camry today.

    • 0 avatar
      Martin Schwoerer

      Yeah, that was a great car. I think at the time there were only two cars that got the “excellent” rating at Consumer Reports: the Camry and the Benz S-Class. Not aware of Toyota’s excellent quality, I remember thinking “wow, Toyota seems to be something altogether different”.

  • avatar
    Martin Schwoerer

    Great article, Ed.
    You need a new photo. The current one makes you look like you’re 19.

    I agree with what you say in the piece, and would add: *the field is open now. Toyota no longer owns the quality space.*

    If another car maker went in and said, “we are the new quality brand. Try us, please trust us. Our cars are good for 200k and ten years with minimized hassle. Machines as such may go wrong every now and then, but we’ll cap your repairs per year for the next ten years to $1k/year and give you a free loaner every time you’re in the garage outside of regular maintenance” — that would give them a quick piece of Toyota’s pie.

    • 0 avatar
      Patrickj

      That $1000 deductible warranty over a decade would be a powerful marketing tool, and not very expensive for a decently built modern car.

      People’s concern with older cars comes from spending thousands of dollars and very often NOT getting the car fixed properly.

  • avatar

    It would take more than a handful of recalls to seriously affect how the great majority of people view Toyota cars. Even with these recalls Toyotas are still more likely to age gracefully than any other cars, except perhaps for Hondas. OK, so people might think that Toyotas are not the saints of vehicles any more, but they are still more likely to work reliably past the warranty stage than Nissans, Hyundais, Kias, Mazdas. As Psarjhjinian (dude, that’s some complex nickname) already mentioned, a recall is not such a big deal, especially when it’s a voluntary recall, and when it’s handled well. OK, maybe Toyota’s PR hasn’t handled these recalls in the best way, but 99.9% of Toyota owners and potential buyers are not aware of that. People who buy Toyotas are usually not car enthusiasts and thus they don’t follow the bread crumbs. If (let’s say) Ferrari did that, the impact would be much worse for them, because it’s customers and potential buyers follow the news more closely. Hopefully Toyota has learned a lesson from this. One of the biggest challenges for a financially successful company is not to fall asleep, not to get arrogant…to keep their feet on the ground.

  • avatar
    DweezilSFV

    Great article Mr EN. Didn’t know you were running a “GM hate site”, though.

  • avatar
    mpoccia

    I just clicked over to the Reuters article. Dead on. I might add that there are many who were instrumental in quality turnarounds at other auto companies who will credit Toyota’s model for their own successes. Some of those companies are now going through their second or third turnarounds since. The problem (from an outside perspective, at least) seems to be a syndrome we used to call “fat, dumb and happy.” Maybe Toyota has caught that, and maybe the world is noticing.


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