By on April 6, 2010

Last evening, U.S. Transportation Secretary Ray LaHood declared he’d be seeking the maximum penalty from Toyota. That’s $16.4m, because “they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families.” That’s the largest civil penalty the U.S. Department of Transportation has ever sought. According to Reuters, “previously, the largest fine was $1 million against General Motors Co for failing to promptly recall windshield wipers in 2002-2003 model vehicles.” One would think Toyota can pay that out of petty cash. But the matter has Toyota concerned. Plaintiff lawyers are rubbing their hands.

There is no better way to tell the impact and importance of a news item in Japan than taking the fever of the Nikkei wire. One mention a day = no worry. Two mentions = eyebrows go up. Multiple mentions = Red alert!

Today is such a day.

At 9:37 in Tokyo’s morning, The Nikkei [sub] remains sanguine: “Toyota treads water after U.S. fine” is the headline as ToMoCo’s stock is unimpressed and trades at round 3820 yen, higher than the previous day’s close. The matter receives a few lines on the wire, and The Nikkei goes on its merry business.

Half an hour later, Japan is worried. The stock drops to 3750. At 10:38, The Nikkei [sub] sees the matter worthy of a bigger story. “Toyota to face largest civil fine over recalls” is the headline of a lengthy article.

The surprise is buried deep in the article. Flabbergasting U.S. commentators which “expect Toyota to appeal the fine,” as Reuters put it, the Nikkei carries an official Toyota statement “that it is unlikely to lodge a protest against the penalty.” Toyota even ”understands that the NHTSA has taken a position on this recall.” Admission of guilt? Lawyers in the U.S. who are still awake and sober reach for their cells and call their partners: “Did you hear what the nips just said? We’ll be rolling in dough.”

Thirty minutes later, The Nikkei [sub] ticker spits out another Toyota message: “Toyota falls on U.S. fine, S Korea recall.” To add insult to LaHood’s injury, South Korea ordered the recall of 13,000 Toyotas.

Five minutes thereafter, 11:15, The Nikkei [sub] reports that the Japanese government chimes in. It’s taking a wait-and-see position. The U.S. move is ”based on laws in the United States, and therefore it is difficult for the Japanese government to make any direct comment,” says Japanese Economy, Trade and Industry Minister Masayuki Naoshima. That’s Japanese for “we have no idea of what to do, please get lost.”

11:29, the next Toyota News: The Prius was Toyota’s best selling car in the 2009 fiscal year, says The Nikkei [sub]. “So what?” says the market.

11:45, the next Toyota News. Detail on South Korea. Affected are 13,000 Lexus ES350, Camry and Camry Hybrid: Accelerator pedals are getting entrapped by floor mats again. The market is taking a lunch break.

Back from lunch, The Nikkei [sub] reports at 1:09 pm that Toyota is between a rock and a hard place: “Admitting to the charge could strengthen the cases of car owners suing the firm, while refuting it risks inflaming U.S. public opinion.” There are more than 100 lawsuits pending against Toyota. The Toyota stock goes down.

Later in the afternoon, with no other news on the ticker, the stock inches back up to 3775 Yen.

Rough day at Toyota. And a bright morning for lawyers in the US.

“Ms. Dingelfinger, get me some brochures for that 150 foot Sunseeker.”

“Yes, Sir. Gulfstream just called, and are we still interested in that G5?”

“Tell them we’ll call back.”

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64 Comments on “Rough Day At Toyota...”


  • avatar
    Mr Carpenter

    Dear Mr. Toyoda: It’s only money. You see, the United States is bankrupt, and these people in the District of Control are power hungry, clinically insane, evil, and out of control. What this $16.4 million is, is a means of simply grabbing a little of what you’ve got under the guise of legality. Quite interesting, given that this government is very probably illegitimate. The truth will come out some day, and once it is proven that the Occupant in the White House isn’t an American citizen (and probably never was), then of course, that means that anything done during “his” administration at the Federal level is entirely illegal. But that’s another story for a future day.

    At least look at the bright side; it’s not $16.4 billion.

    We American subjects (once citizens) are getting the same kind of extortion with menaces by means of extra police patrols, red light cameras, speed traps and “legal” confiscation of monies (in places such as Texas) by the “police forces” (highway robbers).

    So hopefully you’ll be able to write off this proverbial drop in the bucket for Toyota Motors and realize that once this anti-business, anti-success, anti-automobile regime is gone, you shouldn’t have the same problems that you’re having now.

    Any of us out here with brains, Mr. Toyoda, knows that this whole thing with your cars has been nothing more than what may be described as a “witch hunt”. Those of us who are “car guys” realize that your cars are well above average in most categories, and you already know about the “driving excitement” thing and we know you are working on that since we understand you’re one of us (car guys). Don’t forget the Celica name – it still carries a little cachet. Oh, and by the way, for the Subaru version of the upcoming sports vehicle that you’re sharing with them? Go ahead and spend the money, encourage them to go all wheel drive with rear wheel drive on the Toyota version. i.e. don’t do a simple sheet metal badge engineering job – don’t want to emulate Gov’t Motors, eh?

    Sincerely,

    Major Carpenter

    • 0 avatar
      thebeelzebubtrigger

      I see you’re a birther, which probably means addressing anything else you’ve said is futile, but — There is one single difference I see between the policies of our last prez and the current one — so-called “health-care reform” (perhaps more properly described as “health care insurance regulation reform”). The puppets in DC are following the same orders from the same corporate overlords regardless of party affiliation, and to believe otherwise shows a serious disconnect from reality. IMO.

      As for Toyota, I think they pretty much did all they could have done. The floor mats could have been more thoughtfully designed perhaps. Floor pedal “ergonomic issues” ? I really doubt it. I’d be very interested in seeing what happens in the wake of several people feeding the media similarly alarmist reports about any randomly chosen make (non-government owned) of car. My money would be on that make getting similar treatment, because that’s how our media-fueled society of “consumers” operates. One person cries wolf, and suddenly the TV reports packs of wolves in every town and village. Within a week or two everyone knows someone who knows someone who had a scary experience with wolves. The media alleges that several people were killed by wolves, and a couple even made cell calls and described the wolf about to devour them (would that person know the difference between a wolf and a husky-shepherd mix?) At the end of the day nothing can be proven, but the avalanche of likely unfounded allegations “looks bad”, so the authorities dispatch teams to “do something about the wolf problem”. And it was all because someone somewhere felt threatened by a dog they mistook for a wolf.

  • avatar
    HerrKaLeun

    Have they shown us one single case of UA yet that wasn’t a balloon boy or just someone too stupid to drive? I have the feeling every witness of UA they had produced, turned out to be some wacko.

    • 0 avatar
      Geeky1

      http://abcnews.go.com/Blotter/toyota-driver-abc-news-videos-helped-save-life/story?id=9618954

      “‘I remembered the safest thing to do is to go into neutral and control the car, and that’ s what I did.’

      After getting the car under control, Haggerty called the dealership on his cellphone. He realized he was close to the interstate exit that would take him to dealership. They had told him they had never witnessed the acceleration first-hand — now he was going to show them.

      “I called the service manager,” said Haggerty. “I told him I’m having the problem right now.” They told him to bring the car in.

      The car kept trying to accelerate, but switching from neutral to drive and back again as needed allowed Haggerty to steer the car onto an off ramp and the three miles to the dealership.

      When he reached the dealership, the brakes and the tires were smoking. Haggerty put the car in neutral. The engine was still revving.

      The first thing the service manager did, said Haggerty, was check the floor mat. The mat was still in place, attached to the floor with factory-installed brackets. ‘He even confirmed to me,’ said Haggerty, ‘that it’s not the floor mat that’s the problem. It was accelerating and he witnessed it. He sat in the seat and he witnessed it accelerate.’

      The service manager called a Toyota representative. According to Haggerty, the Toyota representative told the service manager to replace the gas pedal and the throttle and their sensors.”

      The vast majority of these UA cases are people that shouldn’t be driving. Too old, too uncoordinated or just too stupid to operate their vehicles correctly. However, Kevin Haggerty’s case-and, indeed, Rhonda Smith’s case (so long as you understand that she’s not a car person and make some educated guesses as to what she actually experienced)-are both indicative, in my estimation, of the fact that these cars do have a real problem.

      It’s apparently not a problem that occurs frequently enough to be of any significance, and it wouldn’t stop me from driving a Toyota (assuming, that is, that I was somehow stupid enough to buy one in the first place), but it’s hard to dismiss the Haggerty case in particular as being simply someone that can’t drive.

  • avatar
    Runfromcheney

    No, the government isn’t trying to kneecap Toyota to help GM! No, not at all, thats silly!

    The only good thing that can come of this is that I have had my eye on the Camry SE, and because of this UA witchhunt, I will probably be able to get one for a four digit price when I graduate college in two years.

  • avatar
    ash78

    I’d love to see them try this 8-10 years from now with a Chinese company. I wonder if Washington could ever be so bold as to bite the hand that feeds them.

    Prediction: This won’t hurt TM stock at all (just like none of the previous stuff has)

    • 0 avatar
      tced2

      Japan ($765B) holds a similar amount of US Treasury debt as China ($889B). So Japan and China are “feeding” the US Treasury in similar amounts.

    • 0 avatar
      ash78

      tced,

      I was not aware Japan’s share was still so high. Interesting how it gets a much smaller share of the news (I suppose because China’s purchases of Treasuries have been more recent and accelerating). That, plus the whole communism thing.

  • avatar
    1996MEdition

    The guilty even if proven innocent philosophy of the US government regulatory bureaucracy prevails.

  • avatar
    Robert.Walter

    This is the consequence of not taking ownership for bad design (pedal packaging and ergonomics, not necessarily including electronics), and reporting it withing a 5-day window, even after introducing remedies in other markets. This is the consequence of putting the consumers and regulators in your best market in a 2nd row compared to those in other markets.

    And specifically, this is a prime case-study why quickly recognizing, accepting, and attacking a product problem is so much more preferable to letting it smolder until it bursts into flames not at a time, or under conditions, of your chosing.

    Unless I misunderstood the timeline, there is only one answer to: If Toyota is innocent, why did they begin making changes in overseas markets before informing US regulators as required under US-law?

  • avatar

    Employees at US Toyota dealers carry a 2″ x 3 3/8″ plastic card that includes a mission statement. It indicates that one of Toyota’s core values is “respect for people.”

    According to the National Highway Transportation & Safety (NHSTA) agency, Toyota withheld critical information about defects from the public. This behavior on the part of Toyota indicates that profits are more important than safety.

    There is clearly a disconnect between the company’s mission statement and its actual behavior. To regain the trust of the consumer, top management at Toyota must start “walking the walk” as opposed to “talking the talk.”

    • 0 avatar
      psarhjinian

      Mission statements mean nothing.

      Read it again, because it’s important. Mission and vision statements mean nothing. I’m generally pretty soft on business management or human resources as professions, but this is one area where those disciplines missed the boat.

      Mission/vision statements mean nothing without the corporate will to act on them. Conversely, if you have good leadership and a good culture, a mission statement is largely unnecessary and amounts to little more than corporate self-gratification on the part. You either have a mission and a vision, or you do not, and no amount of intra-company marketing is going to substitute for it; policy and dogma is not a substitute for good leadership and technical controls.

      It’s very much a “cart before the horse” situation. There’s reasonable evidence that mission/vision statements (and quality committees, etc.) actually make the problem worse: they promote the process and the gesture; the idea that the process is more important than the result.

      According to the National Highway Transportation & Safety (NHSTA) agency, Toyota withheld critical information about defects from the public. This behavior on the part of Toyota indicates that profits are more important than safety.

      This isn’t entirely correct. There’s good reason to not bring this kind of thing to the public and it has everything to do with a) the magnitude of the issue, b) that the real cause isn’t understood and c) the public is not very smart about this kind of thing.

      Full disclosure when you don’t have an idea of the core issue (or it’s the kind of thing that people Ludditize) and when the problem is not particularly symptomatic (what, 20-50 out of several million?) is recipe for a shareholder lawsuit.

      Toyota’s handling of this is not really that bad: it’s akin to how software security vulnerabilities or bugs are handled (because it’s quite similar in nature) and not at all like how drug or food contamination is handled (because it’s nothing like it).

      Bertel made a point a while back: what should Toyota have done? They were far more proactive and far less hostile than Audi, and yet they still got pilloried by an overzealous and disingenuous media and “Christine syndrome” on the part of the general public.

      Even on TTAC–among people who should know better—we have people railling against electronic throttles when both engineering theory and empirical evidence have shown that electronics result in fewer SUA incidents and safer cars across the board, and that pedal confusion and entrapment have proven the most likely cause in the majority of incidents. Toyota going public without a good handle on the issue isn’t “profits ahead of people”, it’s sensible PR and issue handling. If the symptom rate was higher (say, if it was a tend of a percent rather than a thousandth) then maybe they’d have cause to, but that’s not the case.

      And now we’re seeing that it isn’t really affecting their sales figures appreciably, especially as the media’s attention span wanes. It’ll take time, but it possibly won’t affect their objective quality rankings, which have been and are the one of the best in the industry, either. So perhaps this wasn’t that badly handled at all?

    • 0 avatar
      b1msus93

      “Full disclosure when you don’t have an idea of the core issue (or it’s the kind of thing that people Ludditize) and when the problem is not particularly symptomatic (what, 20-50 out of several million?) is recipe for a shareholder lawsuit.”

      That sounds like “thinking about $ before customers safety” to me. And it shouldn’t haven taken them months to at least notifiy someone that something was wrong. There were more complaints about SUA from Toyota vehicles than from any other manufacturer, so Toyota must have known something even before September 2009. Besides, Mr. Toyoda’s already acknowledged the company’s mishandling of the situation, so I don’t know how you can defend the company’s actions.

  • avatar
    b1msus93

    LOL at some of you.
    If Toyota “knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families”, they deserve this fine. No witch hunt here.

    • 0 avatar
      wsn

      The problem is, how do you define a “dangerous defect?”

      Define by number of complaints? We know the complaint system is not scientific, as anyone can file multiple complaints without any physical proof.

      Define by death rate? Then you will probably have to shut down Chrysler before even finding any fault with other car makers.

      Law enforcement is only valid if it’s applied to everyone equally. Otherwise, it’s a witch hunt.

  • avatar
    Mr Carpenter

    Exactly; how do you define “dangerous defect”?

    The most dangerous defect relating to most of these “unintelligent acceleration” scenarios have been the loose nuts behind the wheel.

    Not entirely Toyota engineering. Some of it could be (as with Audi in the 1985 debacle) pedal placement decisions made by engineers, as well as other possible defects.

    Look at the numbers as previously posted here at TTAC; Toyota are towards the upper end, but not even top end, of unintended acceleration (at least, were until the “news” came out).

    It’s VERY illuminating to me that these fines come about against Toyota when Ford, GM and Chrysler have had a worse recall record – by far.

    Pretty well anyone can see it’s a witch hunt, unless they’re predisposed to adore the current people in power and thereby believe that they couldn’t or wouldn’t act like mafiosa, or predisposed to hate Toyota, or both….

    • 0 avatar
      b1msus93

      “It’s VERY illuminating to me that these fines come about against Toyota when Ford, GM and Chrysler have had a worse recall record – by far.”

      This fine’s for Toyota’s mishandling of the situation. Until we hear something about D3 manufacturers hiding information, I don’t see why they should be penalized with this particular fine.

  • avatar

    They will have to fine GM for failure to recall 9 million trucks (73 – 87) for side mounted gas tanks that exploded in accidents – GM has paid out 495 million in court cases without a recall. They’ll have to fine Ford and Chrysler for rear mounted “behind the bumper” gas tanks that exploded in accidents, in short, the government is going to look very biased in the issuance of fines since the ones mentioned above have resulted in deaths and court settlements but no recalls. I’d say these examples are relevant – I wonder what a Judge will say?

    • 0 avatar
      Truckducken

      +2.5

      I expect a bunch of corporate lawyers from Detroit to hop a Learjet stat, and try to convince LaHood (now there’s a name) he’s out of control. If GM is ever held to this standard, they’re doomed!

      Oh wait, they can just ask for more money…never mind, cancel the plane.

  • avatar

    The light of day has been seen by the March sales figures. Toyota is up and you can’t give away GM or Chrysler cars. There is an obvious conspiracy by both US and Canadian governments to torpedo Toyota because they threw away money on dead companies.
    My brother was looking at a GM dealer last week for some new wheels and had to listen to the sales spew about the rusty, dangerous imports that should be pulled off the road when the 2010 Malibu he test drove had the check engine and ABS light on with 34km on the odometer. He is now purchasing a Corolla instead.
    Toyota has reacted promptly and humanely to a problem that’s not even there. Goodbye GM and Chrysler-remember fool me once shame on you-fool me twice shame on me!

  • avatar
    ponchoman49

    I love how the Toyota cult fans are sweeping this under the carpet like they are faultless and our big bad government is picking on them to prop up GM and Chrysler. Talk about conspiracy theorists!
    EVERY car company has recalls and must report them in a timely manor. GM was called out on there truck fiasco and has paid much in fines. Toyota in there infintate arrogance has sat on this since September knowing that faulty “lesser” parts have been installed on many of there exported cars and chose to ignore it. Toyota has known about problems with there cars dating back to 2004 in fact. The more they probe the more Toyota defects and coverups are being found. Toyota is now on a level playing field with everyone else and must suffer the consequences. SUA does happen and is real. Yes there are greedy people out there that like to captitalize on these things. But in the end I have seen and witnessed SUA from a Camry that was demonstrated to us from a Toyota salesman that floored the pedal, lifted his foot and the car was still acting like it was floored. Of course he just put it into neutral and safely coasted down to a stop but that may not always be the case in all situations and this defect needs to be addressed now before we have to add more deaths to the already record numbers!

    • 0 avatar

      I’d like to know the name of the salesman and the dealership he worked at. If what you say is not due to a floor mat or other obstruction you and your friends may have been the first people in the United States to witness a defective pedal in a Toyota. It is absolutely critical that your story be verified to lend credibility to the other thousands of suspect NHTSA complaints.

    • 0 avatar
      Angainor

      I call BS on Poncho too. As we’ve seen with this SUA baloney, anyone can make an anonymous claim about anything and some fool will believe it. Give us the details about this “incident” and let us see for ourselves.

    • 0 avatar
      LectroByte

      What “record numbers” of deaths are you referring to? The only ones I can even recall are the 4 people in the Lexus, and that one was from extra floor mats, not a pedal sensor problem.

  • avatar
    mikey

    Reading the Toyota fanboys stuff is, if nothing else,entertaining.
    On the other side of the debate,we have those that are hooked on to reality.

    Robert.Walter seems to have it figured out. bizphilosphy1 lives up to his handle. Ponchoman 49 brings up a few good points.

    Face Toyota fans. Your beloved car company,done the deed, and tried to cover it up. Then to make matters worse,they got caught!

    • 0 avatar
      wsn

      If reality is what you want, get this:

      The driver of any Chrysler is at least 50% more (sometimes 100%) likely to die in an accident than the driver of a Toyota of the same class. (as per IIHS)

      Be safe, drive a Toyota, or Honda, or Subaru, or anything but Chrysler and GM (yes, GM is worse than Toyota too, but not as drastic as Chrysler).

    • 0 avatar
      mikey

      WSN…..Figures lie,and liars figure. Take your “we hate any thing domestic” head out of your ass,and quote some real stats,with real data to back you up.

    • 0 avatar
      srogers

      Maybe someday you will figure out that not everything is about ‘who hates domestics’ and ‘who hates foreign’ cars.

      You might not believe this, but I (1)happily drive a Ford, (2)like European cars and (3)think that Toyota is being unfairly treated. How is this possible in your world?

    • 0 avatar
      mikey

      In my world, srogers,it seems to me ,that your no fool with your money. You drive the Ford cause you got great value,for your buck. You like the overpriced, overated, European garbage,but not enough to deal with the issues of ownership. You feel that Toyota is being treated “unfair” because you believe that the UAW and the Democrats,cooked the whole deal up.

      But when it comes time to part with your own nickels and dimes, you buy domestic.

    • 0 avatar
      PartsUnknown

      @srogers,

      Mikeys world is black and white, and the hypocrisy is palpable. Criticizing others for having their “we hate everything domestic” heads in their asses, while his “I hate furrin’ cars” head is planted firmly up his arse. It’s easy to get him going, foaming at the mouth and all.

      For the rest of us in the real world, and not on a GM pension plan, the world view is a little wider. Similarly to you srogers, I have a Ford Taurus X and a new Accord in the garage. They represented the best combination of safety, economy, price and features among their competitors, regardless of country of origin. I have long owned and loved European cars, including Porsche, VW, Saab, BMW and Land Rover, and enjoyed them immensely. I also think this business with Toyota is overblown nonsense and would buy any Toyota model without hesitation (if they made anything that didn’t make me sleepy).

      Point is, the automotive world is a wide and varied place. “Foreign vs. domestic” is a tired polemic for the simple minded.

    • 0 avatar
      mikey

      Oh “simple minded” it is….I can live with that.But we are going have to rename the B%B to the Best and the Brightest,and the Simple
      Minded.

    • 0 avatar
      srogers

      Mikey,
      You’re somewhat correct. I bought the Ford (used) because it was the best value/sportiest little hatchback that I could afford(whether Japanese, Domestic or Euro). But being a Focus, it is a Ford engineered in Europe.

      But I don’t believe that there’s a UAW/democrat conspiracy. But do I believe that there’s an North American anti-Japanese bias involved though. Many people hate that domestic products are often considered second rate to what the Japanese produce, and this is a chance to put a Japanese company in their place, even if it’s not justified.

      I’m not so sure that I’ll be buying domestic again. I’ll look at all the options for small, sporty, fuel efficient hatchbacks(whether Japanese, Domestic, Euro or Korean) and buy what I feel is the best combination of those attributes. Nationality of the manufacturer won’t be playing much of role in my decision.

      But thanks for giving me credit for being a good value shopper. Cheers! (ps. tell my wife).

      My previous cars (in reverse order) were: 87 BMW 325, 88 SAAB 900 Turbo, 89 Proton(Mitsubishi) Colt Turbo, 78? Rabbit, 1970 BMW, 71? Mitsu Colt, 69 Ford F150, 74 Dodge Dart, 70 Dodge Challenger. So country of origin = US, Germany, Sweden, Malaysia and Japan. So you see, my shopping isn’t limited much by geography or politics.

  • avatar
    tparkit

    Toyota management thought it bought itself some protection when it forked over $250 million to the UAW et al.

    http://www.thetruthaboutcars.com/toyota-pledges-250m-for-nummi-closure/

    All the company managed to do was declare itself a duck in Ray DaHood’s shooting gallery. Stupid, stupid.

    • 0 avatar
      wsn

      Yep, they didn’t learn from Bush Junior’s “fight terror with terror.” They should have paid nothing. Prolong the legal battles with the Nummi workers for as long as possible. Playing nice simply isn’t the American way. You got to, did I say it, “fight terror with terror.”

  • avatar
    Mark MacInnis

    Toyota will be fine. This fine is the equivalent of the margin on about 8,200 cars, or about what they sell in 1/3 of a day, worldwide. Yawn….. probably will pay it out of petty cash. When your Income statement rounds to the nearest hundred million $, $16 million won’t move the profit meter much…..just sayin’.

  • avatar
    Canucknucklehead

    Gee, this couldn’t be politically motivated, could it? Nahhhh, no way!

    Regardless, Toyota is moving metal like no tomorrow and their stock price is doing very well, thank you.

    I bought Toyota stick at $71. Glad I did, too.

  • avatar

    When you play in the big leagues, you have to expect a few curve balls. Unfortunately, aggressive gov’t regulators and mercenary trial lawyers are part of the system here.

    Go ahead and call me a jingoist, but it seems to me that many manufacturers outside of the US have regarded the American market as a very fact and rich goose to pluck. Their US operations follow the letter of the law (as I’m sure US firms do in foreign jurisdictions) but my impression is that is done as a business necessity, a concession to a quaint local custom, if you will, rather than an embrace of the American system.

    Toyota has followed an intriguing path in establishing its identity with American consumers. They tried to pitch Toyota as part and parcel of the fabric of American life. Building plants in heartland America, Kentucky and Texas, even putting a billion dollar R&D center in Ann Arbor (muting Michigan’s Gov. Granholm), Toyota tried to sell itself as American as apple pie. In fact, Toyota pretty much succeeded in replacing Chevy in the secular trinity of America. Mom’s been bring you her apple pie in a Camry for a while.

    The irony, of course, is the the sub rose pitch of Toyota is “buy our cars because we’re Japanese and don’t make American crap”.

    I agree with Lutz and Delorenzo. This, though nowhere near a fatal blow to Toyota, will make them seem to many consumers as just another car company, capable of screwing up like all of them.

    In the short term, Toyota will throw money at incentives to buoy up sales, which seems to be working and with $35 billion in the bank, they can afford to do it for a while.

    The B&B, though, know that money on the hood is a fool’s errand, buying today’s sales at the cost of decreased resale value. If the retail Toyota purchasers are going to take a depreciation hit, they might as well consider Hyundai next time. Those who lease won’t care, but when those Camrys come off those $199 leases, they’ll sting Toyota when they don’t fetch traditional “Toyota” prices at auction.

    Attn: Steve Lang: What do you think Toyota’s incentive campaign will do to prices on used Toyotas and Lexi?

    • 0 avatar
      psarhjinian

      Go ahead and call me a jingoist,

      Ok, you’re a jingoist. Ba-dum-ching!

      When you play in the big leagues, you have to expect a few curve balls. Unfortunately, aggressive gov’t regulators and mercenary trial lawyers are part of the system here.

      I would say that the problem is compromised, lax or slow regulation, rather than overmuch. Regulators were not really equipped to deal with these complaints correctly. This is pretty common: we (and by “we” I mean most western nations) been nickel-and-diming services, regulations and oversight into a state of powerlessness for years, only to pay, and pay big, when our cost-cutting efforts present their bill years or decades down the road and we’re forced to be reactive.

      You are right about the legal system: it’s not well-geared for serving society as a whole.

      What I would add would be the “Fifth Estate Gone Wild”. The media is in a kind of feedback loop: they’re losing money, so they have to shout louder, get to press more quickly and be more sensationalist in order to grab eyeballs. Being shrill and shallow gets more eyeballs, but it also erodes loyalty and makes your customer base fickle and likely to switch to your shriller, shallower competition. So you get a kind of race to the bottom that results in the kind of coverage of the issue we see here. The American media market is one of the most hypercompetitive in the world and is further along this curve than most other western nations; as a result you don’t see this kind of hysteria elsewhere.

    • 0 avatar

      This is pretty common: we (and by “we” I mean most western nations) been nickel-and-diming services, regulations and oversight into a state of powerlessness for years, only to pay, and pay big, when our cost-cutting efforts present their bill years or decades down the road and we’re forced to be reactive.

      Ah, the statist’s usual refrain, “We need to spend even more money, doing more regulation.” Statists never admit that the state is incapable of efficiently providing many, if not most, services. Statists never admit it when their beloved state screws up.

      When a business’ business model doesn’t reflect reality they change or go out of business. When a government agency doesn’t work they never admit failure and “just” need more money from the taxpayers.

  • avatar
    psarhjinian

    That sounds like “thinking about $ before customers safety” to me. And it shouldn’t haven taken them months to at least notifiy someone that something was wrong.

    That’s my point: what should Toyota say? The truth pretty much works out to “We have an unidentified problem with sudden acceleration that’s probably caused by floormats trapping the accelerator pedal, but in other cases is probably an ergonomic issue.”

    That’s pretty close to what Audi did, and it worked out spectacularly badly for them. Even now people are still asserting that there “must” be an electronic problem, even through ergonomics and entrapment are far more likely candidates, both empirically and theoretically speaking.

    There were more complaints about SUA from Toyota vehicles than from any other manufacturer, so Toyota must have known something even before September 2009.

    Possibly, but if we break it down by brand, Ford’s Panther cars have ratings nearly as high as the Lexus ES, but no one is recalling them.

    SUA is not “it might catch fire if it gets wet”. It’s certainly not “it’s contaminated with cyanide/listeriosis”. I know this sounds callous, but it’s the way things work: you don’t admit to an unspecified, barely-documented issue that you cannot reproduce and supposedly already fixed (with the zip-ties, which were cheesy) unless you are intending to commit sales suicide, never mind opening themselves up to a world liability and cracker-jack lawsuits.

    Besides, Mr. Toyoda’s already acknowledged the company’s mishandling of the situation, so I don’t know how you can defend the company’s actions.

    Because I don’t work for Toyota, I can make statements like the ones I have. I’m not going to be tried as an agent of the company in the kangaroo court of public opinion. Akio Toyoda, Jim Lentz or whomever can’t go out and say “We fixed the problem, the rest is just scaremongering, showboating and uninformed hysteria” unless he wants the media and more sensationalist members of the government to gut his company like a fish.

    In a similar vein, it’s all well and good to say “Toyota ought to have made a huge PR statement in mid-2009 saying they have a SUA problem” when you don’t work for Toyota or have to suffer the repercussions of such an open-ended statement.

    I’ll ask Bertel’s question again, by proxy, because it really is a good one: how should Toyota have handled the issue? Assume you work for Toyota, specifically in PR or Legal, by the way.

    • 0 avatar

      Wakarimasen.

    • 0 avatar
      ajla

      how should Toyota have handled the issue?

      1.Build a time machine.

      2.Go back in time and give all their vehicles a brake-throttle override, or off whoever first decided to put a push button ignition in a street car.

      3. If no time machine can be made, resort to massive bribes.
      ____________

      Once the media and the feds got their hooks into this issue, Toyota was screwed. There is nothing they can do but keep apologizing and wait it out.

  • avatar
    psarhjinian

    I don’t think this is politically motivated, at least not in the way most people think.

    It’s good optics to “take a stand for the consumer’s safety”, just as it’s good optics to “be tough on crime”. That’s probably about as political as it gets. Any number of politicians get to grandstand a little and, in a few months, get to put a bullet-point on their campaign pamphlets about what a good job they do looking out for the little guy.

    It’s more akin to what the media does: a big public-relations pile-on in an attempt to look proactive. Government involvement in GM or Chrysler doesn’t fit in at all.

    • 0 avatar
      b1msus93

      AND NHTSA is trying to save face themselves.
      They were just as responsible here.

    • 0 avatar
      YotaCarFan

      I agree that regardless of brand or brand nationality, the politicians (including NHTSA) had as at least one motive the desire to get brownie points for “standing up for the little guy”. This is not much different from the class warfare tactic used when the rich Detroit CEOs were crucified for flying expensive corp jets to meet Congress to beg for money. It’s a tried and true political tool. But, I have to agree with “Mr Carpenter” that the Toyota investigations, coverage, and fine seem like a witch hunt. The intensity & duration of the hand wringing exceeds the norm for what DC & the media normally dish out. Normally, they’d be on to some new issue to hype by now. Plus, there have been dangerous defects in other brand cars clearly resulting in deaths that haven’t gotten even close to the amount of coverage PedalGate has gotten (flaming Ford cruise controls and flipping Explorers come to mind – were Ford or Firestone fined by the US Govt?).

  • avatar

    Well, that’s the Chicago for you. Kiss the ring and all that. Consumers still can push back by buying exclusively Toyota.

  • avatar
    Odomeater

    Only here do we find sympathizers for a foreign behemoth that intentionally deceived the American public via cover ups, lies, etc. Truly laughable. Unintended accelleration? What? Never heard of such a thing. Maybe. Whaddya mean the prius can’t stop? Whaddya mean people died/

    • 0 avatar
      LectroByte

      Folks got killed by their Prius? You got a cite for that? The only one I heard about was that California dude who was on the gas pedal 250 times.

    • 0 avatar

      Never heard of such a thing? Truly amazing you Americans. Your a bit late on your news – it was 1989 and a blue ribbon panel of independent experts cleared the Audi 5000 of any defect and laid the blame on “brake pedal misapplication”. In Canada we call it “driver error” – here’s a link to one of three pdf files on SUA so you can catch up on your news. When you get through the last 21 years of facts let me know – we have a lot of new stuff for you all.

      http://www.autosafety.org/sites/default/files/1989%20NHTSA%20SA%20Study%20Report%20&%20Appendices%20A-D%281%29.pdf

  • avatar
    Geo. Levecque

    I think people like Mikey should thank the Canadian and Ontario Taxpayers for giving General Motors Money so these retired GM workers can have a Pension, as both the CAW(old UAW) and GM did not put enough money aside for Pensions!
    Its very obvious that its a Witch Hunt against a Foreign owned Company, Mr.LaHood better be careful, Toyota might just yank there Factories out of the USA and place them in Mexico, and still be able to sell there vehicles in the good old USA, stranger things have happened!

    • 0 avatar

      Mexico? Come to Ontario – its the new “Detroit of the North”

    • 0 avatar
      mikey

      The CAW or the UAW was never reponsible fo our pensions. The NDP government give GM a free ride in the early 90s. The theory being GM was too big to fail. The Conservitive govt of Mike Harris chose to ignore the problem,as did the Liberals.

      If GM had failed the Ontario pension guarantee fund would have been broke within 6 months. With 30,000 retired and 15,000 active,and maybe 20 percent of us financialy solvent. Do the math Geo, This is Canada Geo,the socialist utopia…..dude, 36,000 on the wefare rolls.

      So instead, the province and the feds cough up 6 billion or so they end up owning a piece of Chrysler,a piece of GM 20,000 jobs saved and the pensioners live hapily ever after.

    • 0 avatar
      psarhjinian

      To be fair to mikey and other autoworker pensioners, I don’t think people fully appreciate how badly things would go if all those people in Whitby/Oshawa, Brampton or St. Catharines/Niagara who depend on those pensions suddenly lost them.

      That’s a lot of spending power concentrated in a few small places. Take that money away and those towns go downhill but fast, and the ripple effect wouldn’t stop there.

      Backstopping those pensions and propping up the automakers isn’t largesse, it’s self-defense.

      The CAW or the UAW was never reponsible fo our pensions. The NDP government give GM a free ride in the early 90s. The theory being GM was too big to fail. The Conservitive govt of Mike Harris chose to ignore the problem,as did the Liberals.

      This is dead, bang-on correct, and a large part of the problem of running government like a business: instead of being proactive and planning decades in advance (eg, building up a surplus and banking it for the next recession) governments become populist opinion-chasers, avoiding making hard decisions and small bills now in favour of big bills later.

      You see this sort of stupid, short-sighted behaviour when governments cut taxes in good years. You keep taxes flat or raise them slightly when times are good and cut-and-spend when it’s bad so that you can ride out the bad times.

  • avatar
    CamaroKid

    Just wondering did we ever find out what, if anything, was wrong with the Woz’s Pruis?

    • 0 avatar
      Runfromcheney

      From Wikipedia:
      In February 2010, multiple media reports claimed that Apple Inc. co-founder Steve Wozniak had suggested that faulty software may be part of the problem. However, in a subsequent CNN interview, Wozniak stated, “I haven’t really said those things. They have put those words in my mouth”.

      When asked to describe his cruise control problem, Wozniak said, “It’s a little more of a procedure of upping the speed, upping the speed, and then suddenly it just sort of went like it thought you told it to go to infinity.” As for alternative explanations, Wozniak said “If you’re panicked and your car takes off, you don’t think of these things.”

      Automotive journalist John Voelcker’s analysis of Wozniak’s description blamed the issue on user error, and not being familiar with the design differences of the adaptive cruise control system. In the Prius, unlike some other cars, holding down the accelerate button increases speed in 5 mph increments continuously; Voelcker suggested Wozniak was holding down the button for longer than necessary, setting the cruise to a high set speed, and thus resulting in the “smooth” acceleration to high speed he experienced.

      http://en.wikipedia.org/wiki/2009-10_Toyota_vehicle_recalls#Possible_cruise_control_cause

  • avatar
    daga

    $16M is like the contribution on a few thousand cars. that’s really nothing.

  • avatar
    werewolf34

    I look forward to lower resale values on used Toyotas.

    But if it’s a witch hunt, let the hunt continue to other car companies. At the end of the day, you might have a safer fleet of cars on the road and some US and foreign businesses respecting the role of regulation.

    Start with the US companies but pursue the German ones as well. Get Ralph Nader back on the case

  • avatar
    Buffs Fan

    Toyota is being fined for mishandling a recall on their vehicles. There is a problem with the vehicles, or Toyota would not have recalled them. When a company finds a defect with their vehicles, the law is very clear — they have an obligation to notify the government and the vehicle owners. The Department of Transportation investigated, and found that Toyota did not do this. That is why they are being fined. Not because Obama is a Democrat and beholden to the UAW, or because Toyota closed NUMMI, or because the government owns stock in GM. The fine is large because the violation is substantial.

    It’s amazing how many people are vehemently stating that Toyotas don’t have a problem with SUA. Toyota has clearly stated that they believe their vehciles have a problem, that’s why they recalled them. While some cases are undoubtably pedal misapplication, and some people are very likely trying to scam Toyota, it doesn’t change the fact that the pedals are defective.

    Toyota has handled this badly from the start. I believe that is the lesson for other Auto Manufacturers. All of them have had recalls, and will likely have more in the future. Some may even be more dangerous. That’s not the point. It what Toyota did (or didn’t do) when they knew they had a problem that made their vehicles potentially unsafe to drive.

    • 0 avatar
      b1msus93

      “It’s amazing how many people are vehemently stating that Toyotas don’t have a problem with SUA. Toyota has clearly stated that they believe their vehciles have a problem, that’s why they recalled them. While some cases are undoubtably pedal misapplication, and some people are very likely trying to scam Toyota, it doesn’t change the fact that the pedals are defective.”

      Ding ding ding. And I think even Toyota realizes that this case isn’t like Audi 5000. They wouldnt have recalled 8M vehicles if there was nothing wrong, ESPECIALLY after that Audi incident.

  • avatar
    rpol35

    If the unintended acceleration problem is because the drivers are, as one poster surmized, “too old, too uncoordinated or too stupid” how come this problem isn’t affecting cars like the Honda Accord, Nissan Altima, Chevy Malibu, Ford Fusion, etc.; all similar cars driven by the same cross section of automobile drivers.

    I don’t want to get into the politics of this matter because I’d rather stay on point regarding the problem with Toyota’s cars, their handling of this matter and the lack of this problem surfacing in competitor’s models, ostensibly driven by the same type of driver.

    • 0 avatar
      psarhjinian

      The Grand Marquis and Town Car show similar rates to the Lexus ES and more than the Camry. The fleet-intended Crown Vic and the Camry-derived-yet-bought-by-younger-buyers Sienna don’t.

      Toyota has a problem, but it’s likely ergonomic (and more PR than anything at this juncture) and not due to the Christine factor.

      Ford has a similar problem, and across the board it’s more prevalent among shorter, older and (usually) female drivers. Again, we’re probably talking ergonomics again.

  • avatar
    rpol35

    If it’s ergonomics, then wouldn’t it be more prudent to change the shape/size/material surface of the pedals, move the brake/accelerator further apart, etc. as opposed to looking at shims, sensors & pedal electronics (CTS vs. Denso) which is some of what Toyota is proposing?

    The focus on the fix, nevertheless, seems clouded. My sister has an ’09 Camry and the recall notice that she received focuses on “pedal modification” (gnawing off the bottom of the pedal) and mat replacement; nothing to do with actual pedal assembly replacement. I’ve driven her car many times and find the ergonomics of pedal placement, shape, etc. to be fine. I can’t see how her car is any different than similar, competing models which I have driven, thus leading to my previously suggested post.

    Also…..any information on unintended acceleration in manual transmission models? I have heard nothing on that possibility which if that’s the case would then, I guess, point back to ergonomics of the automatic transmission models, i.e. pedal placement. I’ll assume automatics and manuals use the same pedal assembly (don’t know for sure).

    • 0 avatar
      psarhjinian

      I don’t think it’s anything obvious to someone who isn’t an egonomist or kinesiologist. That it’s not happening to youth-oriented Toyotas in any significant numbers, but is happening to fogey Fords is kind of telling.

      I really wish I had a few days, a Grand Marquis, Lexus ES, Buick LaCrosse and an adjustable kinesio dummy.

      The pedal shim might help matters a little, as will brake/throttle interlock. Tying the floor mats down and cutting the pedal probably helps a lot more. But the statistics are funny: they don’t quite line up with mechanical problems with the pedal or electronic issues with the ETCS**—but they do point to something in how certain demographics interact with their cars.

      **(you’d expect less age bias; you’d also expect the Camry to place right with the ES in SUA rankings instead of well below it)


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