By on June 2, 2007

tundra2.jpg Japanese society is known for its rigid social stratification. Depending on the listener’s relative status, there are four ways to say “this is a book." Individuals within this system are well aware that anyone who moves upwards from their "natural" place in the pecking order risks ridicule, jealousy and attack. Hence the ancient Japanese proverb: “The nail that sticks out gets hammered down." Automotively- speaking, Toyota is the tall nail these days, and boy, is it getting hammered.

Earlier this year, Toyota passed General Motors as the world’s largest automaker. Last month, Toyota’s U.S. operations ended Ford’s 76-year reign as America’s second biggest automaker. If you’re wondering why Toyota hasn’t celebrated these accomplishments with a bit of good old American swagger, see paragraph one. The Japanese carmaker knows it’s in the crosshairs. For now, the company figures that silence is the better part of valor. 

The problem is simple: Toyota’s reputation exceeds them. The automaker is famous for building vehicles that never break, rust, fail or fall apart. Automobiles that are so well-built they’ve stood the old ‘70’s idea that “made in Japan” means cheap on its head. Toyota’s reliability rep is so strong that a disgruntled aircraft owner recently evoked the company’s mythical mechanical prowess on an internet forum: “I want Toyota to make a single engine piston [airplane].” 

For some time, domestic supporters have been trying to tell American consumers to stop drinking the Toyota Kool Aid. Citing independent surveys, they claim The Big 2.8 have narrowed the quality gap to the point where it’s statistically meaningless, making the discrepancy a matter of [misinformed] perception. More to the point, they say the Japanese company is no stranger to product delays and recalls, and mechanical issues. Which is true.

While Toyota’s design, parts and production process remains second to none, carmaking is such a vastly complex business, and Toyota such a vast enterprise, that mistakes are inevitable. No carmaker– or car– is perfect. Toyota’s recent problems with the new Tundra pickup’s defective camshafts illustrate the simple fact that shit happens– especially when you’re building a new product in a new factory using new suppliers.

Still, there’s no question that Toyota’s rapid expansion in the North American market is giving the company growing pains– or should I say, continuing to challenge the storied Toyota Production System. Ironically enough, Toyota is suffering from a perception gap. Their quality problems are not significantly worse than before, but the company’s newly assumed tall poppy status makes them seem so. Simply put, people are paying attention.

Well, the media is, as witnessed by the relatively prominent play given the Tundra screw-up. That said, it would take at least a decade of crap Toyota products and bullet-proof Detroit metal to reverse the curse. And no matter what The Big 2.8 do or don’t do, Toyota is not about to let its products suffer from endless rounds of mechanical mishaps and expensive recalls.

Toyota is taking radical action to sort out its North American quality woes. The company is currently retraining ALL of its North American assembly workers. This “back to basics” course is designed to identify and correct defective working practices and highlight the need for increased front line vigilance. At the same time, Toyota is devolving decision-making powers and back office support from its Erlanger, Kentucky headquarters to regional centers in California and Texas.

Anyone who thinks Toyota will ease-up on its commitment to product quality, brand integrity and customer satisfaction is delusional. The automaker is nowhere near the peak of its global or national ambitions, and they know exactly what they have to do to get there. And make no mistake: Toyota’s current production problems are NOT a reflection of corporate hubris. They're a direct result of their desire to keep a low profile. To avoid the hammer.

How’s this for an inconvenient truth: building vehicles abroad would be the easiest way for Toyota to assure product quality and increase profits. They refrain from doing so for political reasons. The Japanese automaker knows that their top dog status makes them the logical scapegoat for failing American automakers. Planting factories on U.S. soil at least partially protects them from the slings and arrows of outraged patriots.

Speaking to Automotive news, management guru Jim Womack went further. The co-author of a seminal book on Toyota’s lean, mean production machine claims that the American political landscape makes it difficult for Toyota to be Toyota.

"The short-term rate of expansion in the States is not being driven by long-term judgment about what is truly best for the business as a business," Womack said. "Rather, it's being driven by an assessment of what is necessary for the company due to short-term politics.

“Toyota is terrified that it will be blamed for the collapse of Ford and the potential collapse of Chrysler, followed by GM."

If you were wondering how such a successful automaker could have such a paranoid corporate culture, it's best to think of Toyota's psychology as the reverse of Abraham "hierarchy of needs" Maslow's aphorism. When you're a nail, everything looks like a hammer.

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58 Comments on “Toyota: Quality is Job Two...”


  • avatar
    sightline

    Toyota’s (and Honda’s, and Mercedes, and BMW’s) motives for building America factories has as much to do with financial hedging as it does with any political gains. Selling cars in dollars and paying your employees and suppliers in yen means you get hammered every time the dollar depreciates, which it has been doing pretty steadily for the past six years or so. By keeping production in America, Toyota and the rest of the “foreign” manufacturers insure themselves against currency fluctuations.

  • avatar
    Dorian666

    I would think Toyota is more vulnerable to loss of Quality name tag due to its bland offerings. A large number of Toyota buyers want a vehicle just to run and not be a hassle. If Toyata loses this default choice for non car types , they will take a reduction in sales.

    Right now their biggest asset is an enpowered head office who reacts quickly to these reliability issues before they fester. This has managed the perception but seems they are still struggling a tad on quality . With the vast size of the Toyota operation the odds of having issues increases also so it is not unmanageable. I think is just the nature of the beast to be in the top three/four and get into the new model cycle with so many units flying out the door.

  • avatar

    sightline: Exchange rate fluctuations are definitely a deciding factor in plant location– especially when automakers are looking at importing cars from the Eurozone. Still, it's a case-by-case decision. For example, Saturn's new economy car, the soon-to-imported Astra, is inherently unprofitable. There's just not enough margin in it. Meanwhile, BMW's X-model success down South shows us that higher profit margin models can be built in– and exported from– the States. And don't discount the importance of "homeland" quality control. Lest we forget, VW was the first mainline foreign automaker to build a factory in the USA, and that didn't turn out well AT ALL.  Anyway, there's no getting around the fact that Toyota needs US production for political reasons. Imagine the debate if The Big 2.8 went belly-up and Nissan, Toyota and Hyundai DIDN'T have US factories. 

  • avatar
    KatiePuckrik

    Despite being a Toyota person through and through I will try to remain impartial! :O)

    Whether you’re domestic fanboy or an import enthusiast no-one can deny that what Toyota have done in the last 40 years in nothing phenominal. In 40 years, Toyota have set benchmarks in quality and reliability and continually raised them. It doesn’t matter whether it is a perceived gap or not, the fact is, this reputation didn’t come from thin air; it was partially based on fact. Now, 40 years later they are within touching distance of officially usurping GM as the world’s largest automaker. It seems there nowhere for Toyota to crack. So it would seem….

    You see, despite Toyota’s ascent to the top (an ascent which will be read about in business classes for years to come) they still have plenty to do. now they’ve nearly got there, they have to stay there. Which means, investing more in quality and reliable products, devising more efficient production methods to keep profitability high and keep their eye on the ball on which technologies will be viable. We’ve seen Toyota drop the ball a few times in terms of quality (engine sludge, snapped camshafts, etc) but nowhere near the level of other manufacturers. But reputations can only get you so far. You’re only as good as last product.

    Not to mention the increased competition, I doubt that GM and Ford (should they survive) will happily accept that Toyota have stolen their crowns without a fight. Also, the rise of Indian and Chinese manufacturers. The biggest worry for Toyota (and they acknowledge this, by telling their suppliers NOT to supply them) is Hyundai. Hyundai is repeating history by rising slowly through quality and reliable products at value prices. But because while Toyota blazed a trail through unchartered terrorities making mistakes, as well as successes, Hyundai are doing this at a much more accelerated rate because they are using Toyota’s plan against them.

    In summary, Toyota’s plan to stay at number one is simple:

    1: Keep quality and reliability at the front of your mind and in your products. That’s what got you here!
    2: Build your products with the customer in mind, not an accountant.
    3: Look at GM and Ford and learn from their mistakes about how to fall from grace.
    and finally….
    4: Always look over your shoulder. Hyundai ae just as ambitious as you and will slit your throat to get there!

  • avatar
    jc

    If you really and truly want to see evidence of how far Toyota has fallen, just go sit in one of the new Camry or the Prius.

    The plastics in those cars and the way the dashboard pieces line up are vintage GM/Ford from the 80s/90s.

    Attention to detail used to be a Toyota hallmark. Now they’ll sacrifice the small details to get a product out the door quicker. Not necessarily cheaper, but quicker. You still have to pay for that “Toyota Quality”.

  • avatar
    Gardiner Westbound

    Customers pay Toyota a premium because of its focussed consistency. Every product betters its predecessor and bristles with unmatched durability, quality and reliability – until recently.

    The poorly managed engine sludge issue, stonewalling Lexus owners with engine hesitation complaints, the fit and finish deficient Avalon, defective Camry transmissions, and now flawed Tundra camshafts point to a quality malaise and portend a crisis in confidence.

    We recently chose an Infiniti over a Lexus. The feature-rich Infiniti offers superior value, performs well and demonstrates superb attention to detail. Time will tell if we were right.

  • avatar
    mrdweeb

    Quality is as much about perception as reality. And perception starts with clever design. During the 1980s, American manufacturers aligned the bottom of the truck lids directly with the panel below it. Invariably, they never lined up quite right, with a larger gap showing on one side or the other. Every one following the car could see this “poor quality”. Japanese and European manufacturers designed the truck lids to hang over the rear panels and license plate openings. They weren’t aligned any more accurately, but no one could see it. Multiply this design trick a hundred times and you have a “quality” vehicle.

  • avatar

    I’m collecting reliability data on a few Toyota models, and have yet to see evidence that their reliability isn’t among the best. If it does start slipping, though, it’ll quickly become apparent, as my results are updated quarterly.

    Latest results:

    http://www.truedelta.com/results0307.php

    One thing to remember is that that media and forums can make problems seem much more common than they actually are.

  • avatar

    Mrdweeb perception may be a part of the quality equation but please don’t assume it was simply body panel alignment that gave Toyota and Honda their reputation for quality and GM and Ford their reputation for a lack of quality. The durability of domestic vehicles was clearly inferior.

  • avatar
    sightline

    Robert, I don’t disagree that there are political calculations being made – it’s just that I’m not sure how much of it is hedging against the dollar and how much is hedging against Congress. I’ll bet in the case of the Germans it’s almost completely financial, but Honda and Toyota are different stories, and with that comes some ramifications.

    There seems to be a a lot of people who believe that cars built in Japan are of better quality than those built in the US, just as some people think Porsches out of Zuffenhausen are better. If (big if) this is the case, it brings up an interesting ramification for Toyota, namely that they are unable to have it both ways, i.e. the warm fuzzies of being built locally and the bulletproof quality they’ve become known for.

    And in that case, which is more important? We all know what the “old” Toyota would have chosen. But what will “the new GM” do?

  • avatar

    I’ve seen the “US bad, Japan good” attitude more on Acura forums than anywhere else. People there not only want a vehicle that’s assembled in Japan, but engineered there as well. The perception is that American engineers aren’t as sharp as Japanese engineers.

  • avatar

    I have no doubt that if management at Toyota has expressed a fear of a backlash, that they do have such a fear. Out here in Florida where there are no auto factories I can only say that it has been my observation that people will hate specific car models if they offend someones sense of style and they will hate a car company if they feel they got screwed over by them in a warranty claim or got a crappy car but I have never once seen the anti Toyota backlash.

    Most people down here are not involved in the auto industry so there have been no massive auto related layoffs. I work several jobs, one of them is in a 90 percent union (by choice) work environment of 500 people. About half the vehicles are imports.

    The only place I ever see the vehement anti Toyota or import sentiments is on internet forums and in many cases it is the threatened domestic industry employees simply venting.

    Most people simply don’t believe in punishing people or companies for doing a good job versus a company or people doing a bad job. After all most people use to own a domestic car. There is almost always a reason for why they left domestics.

  • avatar

    Sherman Lin: Unfortunately, it's not about vox populi. Any anti-Toyota backlash would/will have its locus in Washington, and we all know how rational THAT place is.

  • avatar

    Robert in that case Toyota has been correct in spreading the wealth so to speak among the different states as opposed to concentrating its facilities in one state. I use to live in Lagrange Ga where Kia is setting up a plant. I find it ironic that the sentiment expressed by many on internet forums that people should buy a car to support a particular company as opposed to buying a car simply on its merits will shortly (if it hasn’t already) be bitting the domestic car companies in the rear. My experience has been that Southerners (and Florida doesn’t count) has strong regional loyalties. Toyota and other import brands will be seen as homegrown and GM and Ford as outsiders or worse as Yankees.

  • avatar
    jthorner

    Recalls are not a big issue if they are handled well. Ford built 20,000 Taurus SHO engines with a short lived connection of the drive sprocket to the camshaft. Enthusiasts now routinely have these welded or pinned together at their own expense. Ford never took responsibility for the problem and has constitently ducked it.

    Toyota, on the other hand, finds some problems with their new engine for the Tundra and seems to be dealing with it on the up and up. Hopefully Toyota learned a lesson from their very American style bungling of the sludge issue and will continue to own up to and fix at their expense design and manufacturing issues which do come up.

  • avatar
    wlsellwood

    When it comes to growth in the automotive world, Toyota is going where few companies have gone before, both in size and velocity. This would stretch anyone’s production system. And, as the cover story of Businessweek notes this week, highly process-driven companies tend to squelch the kind of product-innovative thinking that is also critical to success, especially in turbulent times.

    As a former Secretary of Defense put it: “This is hard stuff.”

  • avatar
    labrat

    As a domestic supporter (or apologist, fill in the blank) who tries to keep an open mind about all things automotive, I still have to say that Toyota is my least favorite company. Why? Not because they have stolen sales from my beloved Big 2.whatever. They earned that honestly by performing where the domestics did not, and I do not begrudge them the success that comes with that. My issues with this company is how they have influenced the rest of the industry in the past decade, particularly the late 90’s, early 00’s. Because the white bread Camry and it’s huge success, many other companies have been led down this ‘car as commodity’ trail, and we ended up with swill like the Saturn LS, the 97 Malibu, Mazdas and Nissans that were once sporty but were reduced to transportation specials to try to capture that Camry sales magic.

    Luckily, the rest of the automotive world seems to have woken up and are carving out their own identities. Nissan and Mazda are back to sporty, The domestics are improving their quality and capitalizing on their design heritage. The Germans were, and remain, the driving machines. Where does this leave Toyota? As the purveyors of panel perfection, Consumers Guide red dot accumulation, and little else.

    I don’t think anyone can say that Toyota’s ongoing success is a sure bet. The rest of the world’s quality, manufacturing efficiency, desirability and even hybrid production are rapidly catching up. What’s left is the product itself. Here, things are not so stellar. Look at the bread and butter Camry, separate from it’s perceived superiority, JD Power rankings, etc. In comparison tests, this thing consistently loses to the aging Accord, and frequently to the Altima, Fusion, Aura, etc, etc. TTAC’s reviews seem to confirm this. No problem for now, as Toyota’s momentum will carry it along for awhile. But with the newfound #1 status and accompanying increase in media criticism, this may change over time. The Exalted One will have to step it up, get their design staff (assuming there is such an entity) off their prozac-induced haze and into art school, and teach their chassis development team how to speak German. I’m not here to wish them bad luck. I’ll just say that as someone who appreciates at least a little something interesting in a car, there are no Toyotas in my immediate future.

  • avatar
    NICKNICK

    Well, it’s the weekend, and I see no need to think too critically. Allow me to be my version of an armchair patriot:

    Toyota Hilux built in Japan: Bulletproof
    Toyota Tundra built in USA: Junk
    Ford Focus built in Europe: Good
    Ford Fusion built in Mexico: Good
    Ford Anything built in Detriot: Junk
    Saturn Aura (Opel): Good
    Chevy Uplander from Georgia: Junk

    The pattern I see is not of Toyota’s slipping quality, rather it is of the US workforce’s waning abilities. I don’t think it’s Toyota’s fault that its US plants are turning out garbage. Toyota may have done some amazing things in their rise to #1, but what will be truly miraculous is if they can get an American plant to build a decent car.

  • avatar
    Prado

    I do not credit Toyota’s U.S. success on the reliability of their vehicles. Overall, they have just done a superior job at building vehicles that the average person likes better than the competition.

  • avatar
    AGR

    Toyota wants to be indentified and considered a domestic North American manufacturer on the same league as the big 2.81 (lets round it off to 3).

    Nextel All Star Race, Lowes, Charlotte, the epicentre of anything and everything NASCAR, the pace car is a Camry.

    Toyota’s concern is inheriting GM’s position as #1 for both the good and the bad, GM being the biggest was the “normal target”, now it will be Toyota.

    Ten years ago M-B with a new plant in Tuscaloosa, new product, imagine if blogs existed in 1998 / 1999 the M Class would be immortalised and a few other things. Toyota is exepriencing the same learning curve.

    In many instances its the same suppliers that supply the majority of manufacturers. The engineering is dispersed across the planet. If the knowledge base for system “A” is better in that subsidiary or supplier lets get then to do the engineering.

    Its the customer with his money that is empowering Toyota, and putting Toyota in the slightly embarrasing position of selling more and more cars and trucks.

  • avatar
    mrdweeb

    Sherman Lin–of course you have to start with a solid, reliable platform. My Celica had it, my Camaro didn’t. As mentioned here many times before, however, “quality” can be a bit subjective once you move beyond reliability. I drove a new Lexus ES the other day, and it literally oozed quality (to my accumulated broad understanding of the term). Some of that is intuitive design. For example, to increase the airflow, you tap the big up arrow on the console. In many new cars, you have to consult the manual to perform this and other functions.

  • avatar
    Detroit

    Toyota’s engine sludge “PROBLEM-FAILURE-CRAP DESIGN” (take your pick) had to go to class-action lawsuit status for them to stop blaming the customer for it. Even customers with all receipts of 3k mile oil changes sill were blamed! There clearly is lofty, corporate arrogance at Toyota, they just conceal/control it better then the Big-3’s overpaid clowns.

    The only reason Toyota is acting fast on this Tundra camshaft issue is that it is in the last holy grail in the market: pickups. If it were not for that, they would say these Tundra owners abused them, and would sweep it all under the rug.

  • avatar
    jthorner

    “Because the white bread Camry and it’s huge success”

    When the Camry first started climbing the sales charts in a serious way it’s US based competitors were the Ford Tempo, Ford Taurus and Chevrolet Lumina along with badge engineered variations on them for Mercury, Pontiac, etc. . The Taurus was #1 in sales.

    To call a Camry white bread in comparison to those vehicles is rather misleading. I’m no Camry fan, but the Lumina was hardly a great vehicle either and the current Impala isn’t exactly soul food.

  • avatar
    jp3209

    A couple of observations:

    1. ref: Mr Karesh’s comment that many people on Acura forums want vehicles engineered & built in Japan, because they think American engineers can’t hack it… wow. That’s a pretty crappy attitude in my opinion. Essentially, you’re saying: ‘We suck’. Which makes me wonder why someone with that attitude doesn’t move to Japan. After all, the elevator they;re riding in at 50 stories up was installed by an American worker, and very likely is an American product. Same thing with the bridges they drive over in their Acuras… wow, that just floors me. It is interesting to note, that Bob Lutz commented on American Engineering schools teaching too much management & business side of things. It’s been a while since I was in school and I was Civil, so I’m curious if there are any recent engineering grads who can comment on their design curiculum.

    2. Also for Mr. Karesh, is there a way to include country of manufacure in your results? I realize this could get difficult, with say, a Mexican assembled vehicle with a high percentage of US parts, but an Aisin tranny.

    3. Does anyone know who the supplier for these camshafts is? Have they had these problems before?

    4. Isn’t there a law that says specifically that Trucks have to be built in the US? I remember reading something about that, there was a specific law regarding truck imports, and it didn’t apply to cars.

  • avatar
    Bill Wade

    NICKNICK:
    June 2nd, 2007 at 3:55 pm

    Well, it’s the weekend, and I see no need to think too critically. Allow me to be my version of an armchair patriot:

    Toyota Hilux built in Japan: Bulletproof
    Toyota Tundra built in USA: Junk
    Ford Focus built in Europe: Good
    Ford Fusion built in Mexico: Good
    Ford Anything built in Detriot: Junk
    Saturn Aura (Opel): Good
    Chevy Uplander from Georgia: Junk

    The pattern I see is not of Toyota’s slipping quality, rather it is of the US workforce’s waning abilities. I don’t think it’s Toyota’s fault that its US plants are turning out garbage. Toyota may have done some amazing things in their rise to #1, but what will be truly miraculous is if they can get an American plant to build a decent car.

    Would you agree the Toyota Tacoma is a good vehicle? A lot of people do.

    It’s built in the joint GM/Toyota UAW plant in California.

  • avatar
    Nemphre

    We’ve had a Camry and Corolla that were both built in the US, and have both been of excellent mechanical quality. I love how you just don’t have to do anything. Just change the oil occasionally and drive. The Corolla has taken some real abuse as well and just keeps coming back. I don’t think there’s a problem with American auto workers, although I’ve heard some horror stories about Detroit UAW workers.

  • avatar
    NICKNICK

    Bill Wade:
    “Would you agree the Toyota Tacoma is a good vehicle? A lot of people do.”

    Yes, I believe I would agree. If it weren’t for the fact that it’s so close in size to the Tundra, I would consider it a viable option. But that’s design, not quality, and it’s the right size for other people, so nevermind that.

  • avatar
    gunnarheinrich

    Nice editorial. One could challenge the critics by noting that Toyota’s placating D.C. nationalistic politics is perfect business practice if that’s what keeps them going in the world’s number one auto market.

  • avatar
    Robert Schwartz

    “I want Toyota to make a single engine piston [airplane].”

    No, but Honda is now building a very nifty little jet for about $4M.

  • avatar
    Gardiner Westbound

    I’ve seen the “US bad, Japan good” attitude more on Acura forums than anywhere else. People there not only want a vehicle that’s assembled in Japan, but engineered there as well. The perception is that American engineers aren’t as sharp as Japanese engineers. – Michael Karesh

    USA Today automotive guru James R. Healey recently published this exchange.

    Los Angeles, CA: Good afternoon Mr. H, Long time first time. My question is – Have you noticed a difference in quality with Japanese cars made in the US compared to Japanese cars made in Japan? I bought two Toyota Camrys in 1999 for my business, one was made or assembled in Kentucky the other was made or assembled in Japan. The one made in Kentucky immediately had electrical and ignition problems while the Camry made in Japan still drives like the day it was driven off the dealership and currently has 170K miles. The Camry from Kentucky was eventually traded for another Toyota, only this time I made sure it was made from Japan. Your thoughts

    James Healey: Anecdotally, yes. Definitively, no. But here’s something that gives pause. When Toyota begin building Lexus RX SUVs in Canada two years ago — first time a Lexus was made outside Japan — Toyota Motor Corp.’s head of North American manufacturing fretted about being able to maintain quality. In Japan, he told me, suppliers have an average 15 flawed parts per million. In North America, he said, it’s 500 per million. Makes me a litte wary.

    It is no coincidence our cars were engineered and assembled in Japan.

  • avatar
    kornjd

    jp3209:
    June 2nd, 2007 at 6:23 pm

    A couple of observations:

    1. ref: Mr Karesh’s comment that many people on Acura forums want vehicles engineered & built in Japan, because they think American engineers can’t hack it… wow. That’s a pretty crappy attitude in my opinion. Essentially, you’re saying: ‘We suck’. Which makes me wonder why someone with that attitude doesn’t move to Japan. After all, the elevator they;re riding in at 50 stories up was installed by an American worker, and very likely is an American product. Same thing with the bridges they drive over in their Acuras… wow, that just floors me. It is interesting to note, that Bob Lutz commented on American Engineering schools teaching too much management & business side of things. It’s been a while since I was in school and I was Civil, so I’m curious if there are any recent engineering grads who can comment on their design curiculum.

    jp3209,

    I don’t think Mr Karesh was conveying his opinion. He was referencing what he’s seen on the forums and what the perception seems to be. Any post I’ve seen from Mr Karesh has been pretty neutral, as he has to be impartial to a degree (because of the nature of his website).

    My .02

  • avatar
    wibblywobbly

    What is Toyota doing that Nissan isn’t? While Toyota isn’t perfect, look at all problems Nissan has had with the plant in Mississippi. The stuff coming out of their plant in Mexico doesn’t seem to be holding up so great either.

    The “American made = junk” sentiment isn’t limited to the Acura boards either. It seems pretty prevalent among the Toyota crowd too.

  • avatar
    Geotpf

    jp3209:

    4. Isn’t there a law that says specifically that Trucks have to be built in the US? I remember reading something about that, there was a specific law regarding truck imports, and it didn’t apply to cars.

    There is a 25% tariff on imported pickups. All other light vehicles, including SUVs and vans, only have a 2.5% tariff. So, there is an extreme incentive to make pickups in the United States-or Mexico or Canada, since there are absolutely zero tariffs on light vehicles made in both countries, due to NAFTA. So, there are a lot of pickup plants in Mexico.

  • avatar
    EJ

    Good piece, Robert.
    Toyota is very, very smart at the way they do things. Always underplaying and overdelivering, despite occasional hiccups.
    In May’s sales numbers I see big breakthroughs for Toyota:
    1. Prius breaks into the top 10 best sellers.
    2. The Toyota brand becomes the #1 brand in the USA, ahead of the Chevrolet and Ford brands.
    3. Toyota retail sales (excluding fleet) are about equal with GM and far ahead of Ford.
    4. Toyota pickup trucks are steadily rising and now about equal with Chrysler pickup truck sales.

    Wow….

  • avatar
    KixStart

    In re, Toyota sludge: This has to be way overblown. I know at least 8 people with the 3.0L V6 and no one has encountered a problem with it.

    The Detroit Fan Club seems to be looking at Toyota quality issues and thinking that will be the resurrection of Detroit. Don’t count on it. Toyota has enough goodwill in the bank right now to weather some problems.

  • avatar
    PerfectZero

    “I’m curious if there are any recent engineering grads who can comment on their design curiculum.”

    I graduated with a degree in mechanical engineering last year (and about get my second this month), and I can guarantee you that the engineering curriculum in the States is just as rigorous as what’s found elsewhere. An engineering degree from the States is still considered pretty prestigious internationally, regardless of what the public here may think (although that may change with the way student visas are handled these days.

    The bigger engineering problem is with the auto companies themselves. I know plenty of insanely bright, motivated guys who would love to work in the automotive field, but wont even consider it because they know they’re going to spend all their time figuring out ways to shave pennies off an air conditioning knob. Its not far fetched to say that GM et al. could face a serious talent shortage in the next few years.

  • avatar
    pb35

    I prefer my cars built in the manufacturers country of origin. We have a 2004 G35x (wifes), made in Japan. 3 years old, 26k mi, still tight as a drum and no mechanical defects. We also have a 2005 Mazda 6, built in Flat Rock and while the quality is ok I had the clutch replaced at 13k, the radio replaced 2x and it has a myriad of rattles when i go over bumps. Now I know that Mazda is perceived as a “lower-end” brand than “premium” Infiniti but my G35 is but a Nissan in Japan. I’ve also owned a 96 Probe GT (built in Flat Rock) that was trouble-free. The Probe was a Ford with a Mazda drivetrain and the 6 is a Mazda with a Ford drivetrain built in the same plant. Have I come full circle?

    Before the Infiniti we had a Toyota Paseo (wifes, made in JP) and it was the same story; tires and oil changes until we sold it at 95k. I don’t even like Japanese cars that much but you can’t deny the reliability. We bought the Infiniti because nothing in the Toyota/Lexus stable really excited me at the time.

    I am trying to strike a deal to trade the Mazda. Not because I am overly concerned about reliability, I just want something nicer.

  • avatar
    Rastus

    It’s funny that we are talking about pecking orders, status, etc.

    In Japan and many other places in the world, Engineers are looked upon very highly. Yes, that’s correct…Engineering is a very highly regarded profession and conveys a high degree of “status”.

    Let me ask you this: Here in the States, why on earth would anyone look upon an Engineer with high regard, when it is the flunky Finance folks who run the show??? Or the Marketeers??

    Rich Wagoner wouldn’t know the difference between a convolution integral and a toilet plunger. Yet, HE runs the show!! And by God, you as an Engineer…you’d better fall in line!

    Engineers in our society are looked upon as a technician with a degree.

    I know, as I am an Engineer. If I had to do it again, I would most definitely choose another profession.

    So, when Peter M. DeLorenzo claims “GM’s problems are America’s problems”, to some extent he is correct (see Autoextremist.com).

    I don’t particularly like the tone of his latest article, because he sounds as if he “blames” America…when he needs to be a little more blunt in his criticism of GM/Ford/Chrysler “leadership” (or lack thereof).

    But I would certainly agree with the argument that America has its priorities slightly “skewed”. Do I really care about the latest American Idol? No…hell no. But that’s what sells, just like Coca Cola and Coco Puffs.

    Anyone with a brain nowadays in America would be wise to follow Trey Parker and Matt Stone (of South Park fame), or better yet….create the next Stone Brewing Company.

    As far as Toyota: Their time-horizons span decades. You have to have a PLAN to get to where you want to be.

    GM and Ford, ….well, just re-read all the Death Watches….its quite clear there is ABSOLUTELY NO PLAN…and there never HAS been.

    In warfare, be it military or economic, …you have to have leadership!

    Ricky?? Are you listening???

    Don’t underestimate Toyota. They will make things right. When you are committed to your PLAN, you may sometimes undershoot, you may sometimes overshoot, but the target is still in sight.

    They know where they are going.

    The question is: Does Ricky, Mr. Boeing, and Mark Fields??

    Again…stick to South Park!!!! UmmmKay??

  • avatar
    210delray

    I agree that the sludge thing has been blown way out of proportion. It’s only because of the class action settlement earlier this year that the story has been resurrected. We all know who rakes in the cash from such settlements — the lawyers involved.

    I had one of the potentially affected cars — a ’97 Camry 4-cylinder, built in Japan by the way. In 2002, after Toyota had received numerous complaints, including a spirited debate on Edmunds in which a Toyota rep participated, Toyota agreed to an 8-year, unlimited mileage warranty on all vehicles potentially affected by the problem. This was after Toyota had received 3,400 sludge complaints (out of how many million cars sold)? The program was offered to owners of 1997-2002 Toyota and Lexus vehicles equipped with 3.0-liter V-6 or 2.2-liter four-cylinder engines.

    I received a letter explaining this warranty extension. The letter was similar to a recall letter, so it was obvious that it wasn’t junk mail. If there was a problem, the owner had to show evidence of reasonable maintenance, meaning at least one oil change per year.

    My car did NOT have sludge. I changed the oil myself at 5000K mile intervals or less (3+ times a year) using conventional oil. I had the car for 7 years and 111K miles and sold it only to upgrade to a side-airbag equipped 2004 Camry. It is still not clear to this day if the sludging issue was due to faulty engineering or inadequate maintenance.

    I have seen some articles that discussed changes that were subsequently made to the V6 engine, but I have yet to read about ANY changes that were made to the 4-cylinder.

    This ’97 Camry was the most reliable car I have owned for that length of time and mileage. I now own 2 US-built Camrys — the 2004 with nearly 45K miles mentioned above plus an ’05 with nearly 21K miles. I’ve had no problems with the newer one, and only a couple of minor issues with the ’04 — there’s some kind of weird “stiction” in the steering when I turn the steering wheel a certain amount when making a left turn at 20-25 mph, and I’ve recently noticed a barely audible rattle from underneath that could be loose heat shield or something similar.

  • avatar
    mastermik

    well, being the poor engineering college student that I am, I drive a 92 corolla, and it has never broken down EVER since it got in my hands about 4 years ago. Its a FACT that toyota builds very reliable cars. There’s no reason for them to deteriorate now that they’re at the top…

  • avatar
    jthorner

    It is interesting to note, that Bob Lutz commented on American Engineering schools teaching too much management & business side of things.

    Bob Lutz says stupid things all the time, and this is but one of them. I’m an electrical engineering graduate and I know plenty of other engineers. The management and business aspects get little to no coverage in most engineering programs.

    Lutz blowing _____________ is so common that I wonder why anyone listens to him!

  • avatar
    mike frederick

    Toyota Motor Corp.’s head of North American manufacturing fretted about being able to maintain quality. In Japan, he told me, suppliers have an average 15 flawed parts per million. In North America, he said, it’s 500 per million.

    The most trained,quality ingrained workforce at an assy.plant will never know if a camshaft is going to snap.Considering most powertrains are shipped to the plant and simply wait for attachment to the vehicles chassis– shell–this reinforces the statement above.

    500 parts per million is no longer accepted by any manufactuer.So in the end you have Vistion & Delphi,which leads to the domestics to seek a supplier on the market that can deliver the goods.
    If one supplier cannot preform ( delphi ) G.M. is no-longer held to buying whatever it is they are supplying.Especially if they,company & workforce,after attrition and new contracts cannot look to G.M.,as an example,and say ” why momma?”

  • avatar
    starlightmica

    jthorner:

    Although not an engineer, I went to an engineering undergrad (RPI) where it seemed that everyone took a management class or two. The department had its own building on campus, and
    of course all of the hockey scholarship jocks were all management majors.

    I joke now to the engineers that I run into about management being the ultimate promotion for a US-employed engineer, as it seems to be the way things are after you’ve been on the job for a couple of decades.

  • avatar
    ihatetrees

    I’ve always favored Japanese makes.
    After learning on manual shift domestic trucks and cars in the early 80’s (the four speed Chevette did great donuts in six inches of snow), I drove a five speed Civic. It was a revelation. Then, I knew, the domestics were in trouble.

    Yes, Toyota is having a few quality issues. And the domestics have closed the gap in recent years. But look at the big picture – Toyota’s (and Nissan’s and Honda’s) problems are small comparted to the Big 2.x’s.

    I’m certain Toyota can iron out their problems faster than the domestics would ever have been able. (It helps to have a non-union work force when dealing with problem workers quality issues.)

    Worse, when you look at the whole ball of wax regarding quality, service, and warranty coverage, Toyota is a profitable company with a market cap ten times+ that of GM. I’d rather take my chances with their products.

  • avatar
    26theone

    “In Japan, he told me, suppliers have an average 15 flawed parts per million. In North America, he said, it’s 500 per million.”

    I remember studying a similar topic back in a U.S. business school regarding Japanese quality control. A Japanese auto maker was looking for a vendor to manufacture brake pads. They sent a sample of the pads they wanted to several vendors (including an American company) and asked them to make some pads and return them for review. The American product was rejected due to their brake pads not being the correct size. Long story short the American company didnt even have a measuring device capable of meeting the Japanese companies strict size tolerances for the brake pads.

  • avatar
    Johnson

    The Tundra camshaft issue is linked to an outside supplier … not sure exactly which supplier, but Toyota is very dissapointed with them. Also the Camry’s 6 speed transmission problems were linked to several American suppliers who were not building the transmissions to exact Toyota specs. Toyota dropped all of those suppliers.

    The pattern here is that Toyota is relying more on outside suppliers because it’s resources are stretched so thin. With more outside suppliers, Toyota is losing some consistency, so this is why some of Toyota’s future models are being delayed to make sure quality is up there.

    And Toyota recently stated that quality was their top priority right now, and that they would work on improving quality even at the expense of profits. Seems like quality is ‘Job One’ for them.

  • avatar
    enbeem

    My mom handed me down her 2000 (Gen. 1) RAV4 because she wanted a little bigger and more rugged SUV, so she bought a new Jeep Liberty. I used to deride the RAV as "el Jalopo" because of fit and finish problems (squeaky door hinges, exterior door handles with springs that sprung) and the overall feeling of driving a tin can down the Interstate, but I take it all back after living nine months with the Jeep. The RAV may be small and tinny, but we've never had any mechanical problems with it; however, we've taken the Jeep to the dealer three times in 800 miles because there's a loud squeak when backing up on cold mornings (the dealer replaces the brake pads even though the squeak doesn't happen when the brake pedal is pressed). I understand that the discussions are focused on Toyota and GM, but the Jeep was manufactured in the Toledo, Ohio plant–a plant with abnormally high morale and quality (or so a USA Today article went). Both vehicles were manufactured in "best case scenarios," so it comes down to engineering. The RAV was engineered to be a lightweight, efficient hatchback on stilts, while the Jeep was engineered to cost $X,000 (or less) to manufacture while looking like a $25,000 vehicle. These days, the priorities while engineering the vehicle matter more than who made the car. Both vehicles may be imperfect, but I'll take a squeaky door over a mechanical problem that refuses to go away, so I'll be contributing to Toyota's success when I buy my next car.

  • avatar
    jurisb

    although toyota has not been recently been building top design cars like honda does, still toyotas has managed to stay front line. why? because their reliability charts are more than convincing. there is nothing better than a spiderweb on your car`s hood. there is nothing better than if the owner after 5 years of driving still doesn`t know which knob opens the hood. what makes them excel? 1. quality improvements never stop.( if they stop, they slide down). 2. FAIR GAME. we build our own engines chassis etc,and don`t pretend to manufacture.we use our japanese suppliers as much as possible, like omron, denso, fanuc.( unlike gm, rebadging russian Niva as chevrolet) 3. ADDDDDDDDDDDDDDD new models. 4. cycle. car doesn`t sell? make a new generation , much better. 5. products speak for us, not commercials or empty promises. we take care of the products, sales take care of themselves. of course there are other significant points, but i have already mentioned them before. Actually all japanese companies excel.( and shut up about isuzu). whether matsushita, fujitsu, or sony. and you now what? there stands nothing behind them, nothing…. except a lot of good products. Diversity, quality, fair game. funny, the same refers to solid marriage bonds.

  • avatar
    jerry weber

    Let us not forget the quality pyramid theory. As all mfgs. get better at building cars,)lately the Koreans and B brand Japanese have joined the Americans in building and backing good cars) Toyota and Honda no longer have the stage alone for quality. In fact the others are saying buy our quality for less money than toyota. In truth, I drive a (consumer reports) unreliable car, a chrysler 300C. It has never been to the shop save oil changes in 1.5 years. The statistical difference between my badly built chrysler and a well made toyota avalon are now so small that I might have no more trouble than a toyota owner. However, no magazine is going to write this and then go out of business for lack of material.They simply take the small quality difference and print it as if it were a huge gulf ala 20 years ago. Also, mercedes and bmw have a joystick to run their systems in the car. All auto magazines and many drivers hate it for it's complexity. This figures hugely in the bad review for reliability of these cars, in fact it may be the main problem these german luxury cruisers have. Point is, maybe the Koreans are right. Buy our quality for less because it is statistically insignificant to toyota's.

  • avatar
    Roger Hislop

    An interesting point about the status of engineers in the US… where once engineers were the drivers of the American way and creators of American wealth (look no further than the consumer tech boom of the 50s, 60s), they are now the poor grease monkees at the end of a long chain of bean counters, lawyers and finance wonks. It's normal for engineers to create great startups that make money out of tech (Andy Grove, Bill Hewlett, Thomas Edison) — the company grows, diversifies, moves trans-national, and business-types take over. But the engineer, once the source of the wealth, is now regarded as a glorified technician – cleaner fingernails than the guy that fixes your fridge, but little more. In many other parts of the world, the respect given to engineers is vastly different… in Germany, in Japan, in Italy, in Arab countries, your business card says "Engineer Frederik Schmidt" or "Engineer Abdul Nazeem", much the same way you'd be "Doctor Smith" or "Judge Adams". Is there any wonder the smart, bright, ambitious school leavers are not looking at engineering, when society has little or no understanding of the difference between a technician and an engineer? And I'd lay the fault for that at the door of universities and professional engineering bodies, which did not protect the title "engineer", allowing it to get muddied and watered down and used generically by anyone from pest controllers to garbage collectors. Unfortunately, Joe Public has no idea of the difference between someone who can correctly fix your gas stove, and someone who can do finite element analysis on a structural member from first principles to understand vibration transfer modes.

  • avatar
    BostonTeaParty

    A lots been mentioned about engineers on here, i have to say there is something in it. I don’t know if its just the big 3 engineers or if it relates to every auto engineer in the states but theres a definate laziness in not trying to open their minds to new ways and to challenge the envelope. What was done before can be used again attitude, it sucks and no wonder product is rubbish when its based on past engineering. Theres definately more respect in europe and asia for engineers than here, but theres a reason for that.

    As for Toyotas Quality, it does have its issues, although i love the FJ (i’ll get shot at GM if i mention that out loud) the interior is so cheap and has such poor plastic quality, that if GM or one of the other big 3 did it you wouldn’t hear the end of it. And thats the general feeling i’ve got from driving their recent product range when evaluating their vehicles. They’ve suckered everyone in and can now churn out cheaper materials as the perception is there that its quality when actually its far from it.

    Lets not mention the Tundra and its latest driveshaft problems and the rumoured $150+ million to fix just that issue. Bet they’re glad they built that now on top of the plant over running budget, other issues with the vehicle and the incentives to shift it.

  • avatar
    TexasAg03

    I joke now to the engineers that I run into about management being the ultimate promotion for a US-employed engineer, as it seems to be the way things are after you’ve been on the job for a couple of decades.

    I think that is the ultimate goal of some engineers, since there is usually more money in management. However, there are some who still prefer the engineering aspect.

    I graduated in May 2005 with a degree in mechanical engineering. I did not take any classes that dealt with business or management. We were required to take an ethics class, and in many classes the business aspects of design were discussed, but it was a small part of the class.

  • avatar
    kestrel

    To chime in on all this engineer talk, I would submit most students coming out of American high schools have poorer math and science skills than their foreign counterparts. Having TA’d classes at Stanford, I’ve had many a mechanical engineering student come up to me to ask how to solve even the simplest separable differential equations. There is also a lot heavier reliance on computers and calculators among American students. To top it all off, skilled American engineers tend to go to places like NASA or Lockheed or Google. It is reflected in American cars; often the ideas are pretty good, but the execution/analysis is done poorly.

  • avatar
    Mark A

    jthorner: Ford built 20,000 Taurus SHO engines with a short lived connection of the drive sprocket to the camshaft.

    I’m pretty sure Yamaha of Japan was entirely responsible for the engineering /casting /machining /assembly of the heads /cams /valvetrains for all SHOs.

  • avatar
    Mark A

    The RAV may be small and tinny, but we’ve never had any mechanical problems with it; however, we’ve taken the Jeep to the dealer three times in 800 miles because there’s a loud squeak when backing up on cold mornings (the dealer replaces the brake pads even though the squeak doesn’t happen when the brake pedal is pressed). Both vehicles may be imperfect, but I’ll take a squeaky door over a mechanical problem that refuses to go away, so I’ll be contributing to Toyota’s success when I buy my next car.

    I guess all the German cars I’ve ever owned were truly low quality. They all squeaked and gave off an awful amount of brake dust. Maybe it was a defect. Guess I should buy a Toyota.

  • avatar
    indi500fan

    As long as the serious bucks go to MDs, JDs and MBAs, don’t expect any but the most gearheaded of the USA’s top students to bother with engineering. :-(

  • avatar
    theflyersfan

    Quick comment on the built/engineered in Japan vs USA observation: I am a major Honda/Acura fan (having a few friends that work with them in Marysville and Anna, OH helps) and maybe it is my perception, but yes, I do feel there is a difference. My last new car, an Acura RSX Type-S was one of the few Honda products still designed and built in the Land of the Rising Sun (I verified – mind is drawing a blank, but I want to say it was built in Hiroshima – I remember I had to wait for it to cross the ocean and arrive in Seattle before crossing the country to the east coast.) While the interior door panels bordered on spotty given the hard plastic, the rest of the interior and exterior looked and felt solid and reliable. At one time, I was recently looking at the S2000, and it is the same story – although I’ll agree with any critics that the “metal” panel that covers the stereo is terrible. The new Civic, however, seems to have taken a slight step backwards in terms of interior quality. I don’t think the drop is as steep as a Camry (having friends and family with several generations makes a great measuring stick.)

    On the other hand, explain the Korean manufs?
    When they came here, they improved with each generation and they were no pushover in their home market.

    Toyota is still well above average in correcting their problems which borders on stunning given the size of the company. In my “home base” area around Cincinnati, their growth (shout out to Erlanger) has been rapid and 70 miles down the road, the massive complex in Georgetown hires tens of thousands of Kentucky workers to stable and secure jobs that assemble reliable cars. Personally, I’ll take that any day of the week instead of the constant worry that GM, Ford, and whatever Chrysler will call themselves – that they will continue to shed jobs, ruin lives with closings, and destroy their suppliers from around the world.

    One other thing – speaking of improving an initially “damaged” product, how about Nissan/Infiniti? When the new leadership team took over, Nissan was coming out with some striking designs, but the interior quality was just terrible. With the recent refresh of the Maxima and 350Z, far more soft-touch plastics and better quailty seat materials were installed. With the redo of the Altima and G35, they nailed it right in terms of a quality feel. Toyota can do the same. Maybe, like Nissan, they need to reel in costs for the time being. Once the purse strings are loosened a bit, they can improve the Camry and Avalon interior.

    Of course, that doesn’t excuse the junk that replaced the xB.

  • avatar
    Nemphre

    Toyota’s interiors have never been all that great in my opinion, save for Lexus. Take a look at the Celica and MR2 Spyder before they met their demise; those are positively trashy. The current tC isn’t that much better. If you want something nice, you pretty much have to go with Honda or something European.

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