Akio Toyoda will sit before a panel of U.S. congressmen Wednesday and try to explain why Toyota—the world's largest automaker and a company founded by his grandfather—sold cars with runaway accelerators, erratic brakes and undependable steering systems.
As Gerald Meyers sees it, the senior management of Toyota would love to do the right things for the company, for their customers and for the regulatory agencies—if only they had a clue as to what the right course of action was.
“What they should do is easy,” said Meyers, the former CEO of American Motors, the Detroit auto company bought by Chrysler in 1987. “Every crisis management expert will tell you to be transparent. You have to be quick, get the bad news out, get it all out, bury it and move ahead. That’s what every crisis-management expert will tell you.
“But they have evidently run into something that is so puzzling that they don’t quite know what is wrong, and they don’t know quite what to do, and they don’t know if they can do it even if they did know what needed to be done.”
Finding the right path will be difficult as Toyota is tugged in several directions. The National Highway Traffic Safety Administration (NHTSA) launched its fifth, separate, simultaneous investigation into possible procedural, technical and criminal violations by the giant car company in its handling of four different problems throughout the Toyota fleet. The latest investigation is into the manner in which Toyota handled complaints that the power steering failed in some 2009-2010 Matrix and Corolla models.
The investigation launched last Thursday came two days after NHTSA announced it is seeking documents from Toyota to determine when the company learned of problems with accelerator pedals that either stuck in one position, preventing the car from slowing down, or inexplicably increased acceleration. Under federal law, companies selling cars in this country have to notify NHTSA within five days of discovering a safety defect, and then launch a recall. Failure to do so could result in fines of up to $16.4 million, the maximum permitted under the statute.
This is a departure from the agency’s past relations with the Japanese automaker. Previous investigations have relied on Toyota’s assertion that acceleration problems result from mechanical issues, primarily sticking pedals and shifting floor mats.
It is also an unusual microscope for a company which has the fourth least number of complaints—after the Smart ForTwo, Mercedes and Audi—out of the 40,000 filed monthly with the federal transportation agency.
In addition, at least three congressional committees have announced they will hold hearings into Toyota’s actions in handling the various technical problems and the oversight provided by NHTSA. The regulatory agency has come under the congressional microscope because during the Bush administration, safety complaints about Toyotas were essentially left to the company to resolve.
“They built a public perception of a firm that paid great attention to detail, very high quality and very customer conscious,” said Meyers, now a professor of management and organization in the Ross School of Business at the University of Michigan. “That’s all crumbling down now.
“They are fast building a reputation over the last 90 days of being slow, inept, opaque and insensitive. That’s a reputation they built in 90 days, which is overcoming, for the moment, the reputation of the last 30 years.”
From the company’s perspective, the problems are not systemic—they just happen to be coming to a head all at once. John Hanson, Toyota’s national manager for environmental safety and quality communications, says the pedal problems forcing the first two recalls were separate matters.
“We are in a climate where the term unwanted acceleration is very broad, with the media reports about all manner of situations where vehicles are out of control,” Hanson stated.
The pedal entrapment by the loose floor mats “did involve high-speed injuries and death,” he said. That was different from the sticking pedals, he said, “though they are often, unfortunately melded together. Both recalls involve the accelerator pedal, but for different reasons and with different results.”
Toyota is even more frustrated with its latest recall of Prius models with brakes that appear to temporarily fail when the car hits a pothole or goes over a rough stretch of road.
In reality, said Hanson, the anti-lock braking system and its accompanying, electronic stability and traction control system “is functioning as it was designed, but appears it is more aggressive than previous generations with regards to predicting the pending loss of traction.”
In essence, Toyota has designed a braking system whose computer brain can decide to overrule the driver and refuse to apply brakes as ordered when the driver hits the brake pedal. That does not, he said, mean the car has a loss of brake control. But the control is in the silicon network of the computer chip, not the foot of the motorist.
But confidence in its engineering prowess hurts Toyota when changes are made and motorists are not alerted. The latest recall, involving the steering in the Matrix and popular Corolla compact sedan, was deemed significant enough that Toyota altered the system on new cars being produced—but did not alert existing owners to a potential problem. But that is part of the insular atmosphere at Toyota and overconfidence in their technological ability.
“Part of the disagreement between people on the outside who are now critics of Toyota, and people on the inside who are engineers is that the people on the outside think there are safety issues and the people inside Toyota do not,” says Jeff Liker, professor of industrial and operations engineering at the University of Michigan.
Liker, the author of Toyota Culture: the Heart and Soul of the Toyota Way, said once the firm’s engineers determine a problem is not a safety issue, the company will make a “running change” at the factory but see no need to go public and mention the complaints or the remedy.
Still, Toyota could have avoided the crisis if it assumed the worst and acted on the possibility that its engineering systems were faulty, rather than insist that the accident victims were to blame. And that is where their public image crashed.
Toyota was caught, said Liker, between insisting that the problems stem from mechanical systems or inattentive drivers, or stating that they sold unsafe cars. “At that point, it was a no-win situation for them.”
Meyers, who headed American Motors when its flagship Ambassador sedans had runaway accelerators triggered by faulty cruise commands, said Toyota’s public image will continue to be battered until their multiple technical problems are solved.
“The only thing they should be doing is getting at the root cause of the sudden acceleration and nail it. Once it’s nailed, do a fix, then tell the world that you found it, we are going to fix it immediately and irrevocably, and resources are incidental.”
Roger Witherspoon is a New York-based journalist who writes the auto blog, Shifting Gears.