Sale and Production of Eight Toyota Models Halted

January 27th, 2010

2009 Matrix wagons at a Colorado dealer

Toyota has finally acknowledged that it has a major safety problem with unintended acceleration. The sticking pedal has reared its head again, after a 4.3-million-vehicle recall last fall and after the floormat issue (which sounded like a coverup to many). Now with a 2.3-million-vehicle recall last week, Toyota isn’t really sure what the cause is, so they must halt sales and production of the most popular Toyota models. This is a rare and serious action for an automaker.

The story has gained wide circulation and comment, of course, in the business and automotive press. You can find good basic coverage here and here. The cars include: Camry (gas, not hybrid), Corolla, RAV4, Matrix, Avalon, Tundra, Highlander, and Sequoia. Dealers are freaking out, the stock is tanking, and the company is taking an enormous hit in public confidence. The NHTSA said Toyota is “legally bound” to stop selling cars in the U.S. it knows are defective. Wham-o.

Commentators have compared the company’s action to what Johnson & Johnson did in 1982 with the Tylenol scare. J&J pulled the product off store shelves—all of it, everywhere in the country—and the president of the company went on TV with effective, regular updates about what was being done, the speed of the recall, and risks to consumers. It was a classic case in damage control.

Toyota’s problem is not limited to a few bottles of poison-tainted painkiller, however. And it may not be limited to defective pedal assemblies, which the company was quick to attribute to one supplier. There are suggestions that the drive-by-wire system, used in almost all its vehicles, could be at fault. (The company says no.) These computer-driven throttle-relay systems are found in all new Toyota and Lexus cars. Think about that for a minute.

It will take time and engineering analysis to find out the cause of at least 19 people dying in accidents attributed to unintended acceleration. But why has it taken so long? That’s just one of many questions Toyota will have to answer. It will also take time to get 2 million replacement pedals made, after they determine the proper design. And who will get the parts first? Factories or dealers?

Akio ToyodaMeanwhile, the company’s reputation for quality and consumer confidence is bound to suffer. People will begin to wonder whether they should be driving these cars. Audi, faced with the unintended acceleration issue some years ago, tried to stonewall the problem—and almost drove the company to ruin. Let’s hope the new regime of Toyota management has learned from that. Japanese companies seem to be more sensitive to public opinion. Now Akio Toyoda (right), new president and grandson of the founder, has shown signs of concern about the company’s reputation.

He’s supposedly a reticent man, but a thoughtful one. We would urge him to lose his reticence and get out front with the media—immediately—and never forget what happened to Audi.

Do you think Toyota has handled the unintended acceleration problem well so far? They have indeed done a right thing by stopping production and sales. Can or should they do more?

—jgoods

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  1. panayoti
    | #1

    You said it all in your opening. They’ve known about this for months and like someone caught with their hand in the cookie jar, did what everybody else does. They denied, grudgingly admitted a problem, partially disclosed the minimum of information, recalled vehicles and now, with the NHTSB putting a gun to their head, finally fessed up.

    What puzzles me is why has it taken so long to find a solution to the problem. We know that the assembly unit was made by two companies. One had the problem and the other didn’t. Doh?? These are supposedly smart guys that ate our lunch for years and now they can’t figure this out??
    Cynical ole me suspects that there might be more hiding under the bed.

  2. jgoods
    | #2

    @panayoti
    You may be right about more to come. Toyota has always run a very tight ship and doesn’t disclose things willingly. Maybe that will change with Akio in charge. Given this disaster, it has to. Good story in the Economist back in December re the company’s problems: http://www.economist.com/displaystory.cfm?story_id=15064411. But they sure as hell don’t know how to do PR or crisis communications.

  3. Filip
    | #3

    Well, I’m sure glad I bought my 2010 Tundra three weeks ago, today it would have been impossible

  4. Filip
    | #4

    Ok, on the serious side. The authors of this blog love to point out as soon as any flaw is found in Toyota quality. Why, because of their unbeatable reputation for quality. If I was the author, I would do the same thing, it creates a more interesting read. If we constantly wrote about the poor quality of brands like Chrysler, it would be old news.

    The irony of the Toyota recall and how it relates to this blog entry is that Toyota is getting their accelerators from two manufacturers, one American company in Indiana, and one Japanese company. Having a 2010 Tundra I of course contacted my dealership. The first thing they told me, “check if your pedal has CTS stamped on it”.

    Could it be that we loath in the Toyota quality recall only to find out that the recall only affects components made in America?

    We’re about to find out….

    In the meantime, keep the foot off the pedal, and switch to neutral if the car accelerators (assuming you havent turned on cruise control:)

  5. TravisG
    | #5

    Filip makes a good point here… I don’t think its so much the quality issue, but the cover ups that seem to have been going on. If Toyota’s CEO would just fess up with the public and talk to us about this issue, it would go away much faster. Instead, denials have created a storm that keeps damaging the reputation.

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