February 11, 2010

Toyota: Success is Dangerous

It will be years before we know the full implications of Toyota's recall problem, but a few things are already evident. In its relentless push to become the world's number one car manufacturer, Toyota lost its corporate soul (to the extent, of course, that any corporation has a soul). As with any business, performance measurement is a month to month, year by year priority. At this point, it appears that Toyota's primary measurement involved gross sales. Since 2003 the company has ignored alarming signs that their quality control was slipping dramatically. Long known as the producer of reliable, if somewhat pedestrian, cars, Toyota tried to become all things to all drivers. They expanded production capacity across the world as their market share grew. They buried the competition, but in doing so, dug a rather big hole for themselves. They will surely survive, but what form will the survival take?

The old adage "be careful what you wish for" should be engraved over every Toyota plant. They wanted to dominate the market and now they dominate the market. Alas, their cars are prone to uncontrollable accelation and compromised braking. A rather unfortunate combination, to say the least.

Acceleration and Stopping
As evidence of the acceleration problem accumulated - going back to the mid-2000s - Toyota entrenched itself in a denial stance. Finally, they acknowledged a problem with the floor mats. They fixed that. Then they admitted to a defect in brake pedal design, which is the subject of the current recall: they are attaching a small plastic shim to the brake pedal to fix that. Now there are indications that a problem may exist in the computers that determine gas feed. To date, Toyota has not conceded on this last potential source of the acceleration problem. If they are wrong on this one, it's virtually three strikes and you're out.

The braking issues in the Prius involve a sophisticated mechanism which seeks to transform the natural friction in braking into energy to charge the car's battery. The good news is that the battery runs longer. The bad news, of course, is that you might not be able to stop the car.

From a risk management perspective, rapid growth is frought with dangers. On the employment side, you are bringing in (thousands of) strangers to make your product. On the management side, your lines of communication are stretched to the breaking point (no pun intended): a work culture that was successful for a relatively small company might prove inefficient and even disastrous for a world-wide organization. Toyota executives may think that today's company is simply an extension of the modest, diligent operation that entered the world market some decades ago, but size matters. Toyota the Giant is no longer "the little engine that could."

Blame the Media?
One dealer thinks the media has created the problem. Tammy Darvish, who operates 4 dealerships in the Washington, D.C. area, thinks Toyota's commitment to safety is equal to that of other manufacturers. "I don't want to minimize importance of any safety matter. But I think the media has made a sport out of sensationalizing something that is very common: a recall. I sell Chryslers, and they had 18 recalls last year. Did you read about any of those?"

So Toyota's commitment to safety is no different from any other manufacturer. That's a comforting thought! True, the whole problem has been sensationalized. The image of 3,000 pound vehicles hurtling out of control is, well, sensational. It would be nice to think that Toyota will do a little soul searching and re-commit to the values that made them successful: producing a safe, high quality vehicle that accelerates when you want it to and stops when you press the brake. Anything less from Toyota at this point would be, to put it bluntly, criminal.

| 2 Comments

2 Comments

This tends to happen to some companies that simply try to get too large. All that happens in the end is that safety of the product suffers.

I bought a 2004 Camry with a manual transmission having driven stick shift cars my whole life. Within 6 months the manual transmission died. Before this car, I had driven stick shift cars my whole life even taking my driver examination with a stick shift. Toyota attempted to blame it on me saying that I did not know how to drive the car and on top of that, that this was not covered under warranty and wanted to charge me (I cannot recall, but it was substantial).

I considered filing suit, but ultimately decided to trade the car in and purchased a Jeep instead. Toyota pulled every sinister tactic in attempt to alleviate their responsibility for this lemon vehicle. The Customer Service was horrible and blaming the customer mentality is ridiculous especially on a car so new. In any event, this is no surprise to me at all given the culture and the way I was treated by Toyota. I would never purchase a Toyota again. Hopefully Toyota learned a lesson here in ignoring customers and will be paying a steep price just to save a few bucks.

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This page contains a single entry by Jon Coppelman published on February 11, 2010 12:14 PM.

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