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Ed Reingold: Toyota’s wrong turn

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Guest Blog
Tuesday, March 09, 2010

Who among us — at least those of us who are “of an age” — has not sat before our computer and watched in bewilderment as it performed, unbidden, some bizarre function we couldn’t understand, couldn’t use and couldn’t correct?

It gave us pause to hear Toyota executives say with certitude that there is nothing wrong with the electronic throttle system of the cars that have experienced unintended acceleration. They said they know because there is no evidence. Despite testimony of an automotive sciences professor that he was able to induce a similar malfunction in the system, the head of sales in the U.S. insisted that this was not a “real world” situation, it wasn’t one that could occur during normal driving activity, and therefore it didn’t amount to evidence. Toyota was sticking to the tangible evidence surrounding the accelerator pedal assembly.

It is possible that we will never know for certain why the often tragic and always terrifying runaway engine incidents happened. In the 1980’s the Audi 5000 was plagued with a spate of runaway accelerations that resulted in injury and death. Audi’s initial and unwise response was to blame the drivers, suggesting that some drivers mistook the accelerator pedal for the brake pedal; the harder they tried to brake the car, the faster it went. The actual cause of the incidents, if they were not driver-initiated, was never found. No evidence. And it is possible the folks at Toyota are right. They are a technically pragmatic lot. The eventual Audi “fix” was to require the driver to press on the brake pedal before the car could be shifted into gear. But public confidence in the brand was lost and Audi sales dropped for a decade before the company regained its place in the high end of the market in the U.S.

In Toyota’s case the hands-on guys have found the culprit a couple of times — too-thick floor mats, too-long accelerator pedals, sticky metal parts, all of which are being repaired. It is, of course, satisfying to find a cause, evidence. Toyota is certain there is nothing wrong with the electronics, although in the case of the braking problem in the hybrid Prius, a software fix is under way.

The drive-by-wire systems that are used to control late model cars are in use worldwide and are relatively new to the auto industry. They were employed first as fly-by-wire systems in the 1960s to activate the thrusters that “steered” NASA’s spacecraft in orbit and later in warplanes and heavy passenger planes where tugging directly on control cables assisted hydraulically was no longer practical or necessary. Aviation applications have multiple backup systems. In the case of automobiles the systems are a convenience to the owner, they enable many more functions to be controlled and are a cost savings to the maker.

The eventual impact of Toyota’s current problems is incalculable in terms of prestige and confidence lost. The financial cost of the massive repair work under way at dealerships all across the country, even for a company with Toyota’s wealth (the company is often referred to in Japan as the Toyota “bank”), are estimated in the billions. Other serious consequences are the drop in sales at a time of slower sales generally, the possible loss of resale and trade-in value, not to mention lawsuits sure to come.

Akio Toyoda’s contrition, his apologies to victims of accidents, and his vows to establish new systems to recognize and deal with problems in a timely and open manner are surely heartfelt. As a member of the founding family, he has the power to do much to reshape the company and perhaps regain much of the consumer confidence it has lost. He has an historic template that is not lost on veteran Toyota watchers. His grandfather, Eiji Toyoda, had just taken over as president of the company in 1967 when a recall scandal hit Toyota and other Japanese makers. The Ministry of Transportation put an end to the carmakers’ practice of keeping recalls a secret from the general public, a year before the same was done in the U.S.

Shotaro Kamiya, the head of Toyota’s sales company, then called upon the firm’s managers and employees to work for a return to the “customer first” policy and promised renewed efforts to regain customers’ trust.

Akio Toyoda used the same words last month in an attempt to mollify some testy U.S. congressmen and to reassure Toyota's customer base. It will take more than pledges to restore this proud company to the hard-earned reputation it has enjoyed for most of those 43 years.

Ed Reingold is a journalist who reported from Latin America, Africa and Pacific Asia for more than four decades. Since 1969 he has specialized in reporting on Japan, where he served as Tokyo and East Asia bureau chief for Time magazine. He retired from Time in 1992 and directed the University of Southern California's Center for International Journalism for four years. In addition he has published the books Made in Japan: Akio Morita and Sony; Chrysanthemums and Thorns, and Toyota: People, Ideas and the Challenge of the New. Reingold now lives in Portland.

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