Accelerating Into Trouble:. An Analysis of Toyota Motor Company and its Recent Recalls. The multiple recalls of 2009 and 2010 concerning Sudden Unintended Acceleration involved over 10 million vehicles and resulted in tremendous financial losses for Toyota.
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An Analysis of Toyota Motor Company
and its Recent Recalls
The multiple recalls of 2009 and 2010 concerning Sudden Unintended Acceleration involved over 10 million vehicles and resulted in tremendous financial losses for Toyota.
Over the past 25 years, Toyota has had a steady increase in both sales and market share within the automotive industry.
Defined as “the unintended, unexpected, uncontrolled acceleration of a vehicle from a stationary position, low initial speed or at cruising speed, often accompanied by an apparent loss of braking effectiveness” by the National Highway Traffic Safety Administration (NHTSA) in 1989
Off-duty California Highway Patrol officer Mark Saylor was driving with three family members in a Lexus ES350 when it suddenly accelerated out of control, hits another car, tumbled down an embankment and caught fire. While the car was careening down the highway at speeds estimated to exceed 100 mph, one of the occupants called 911 and reported that the car had "no brakes." All four people were killed in the ensuing crash.
Source: Channel 10 News, San Diego, California
August 28, 2009: Lexus crashed in San Diego, CA and kills all four occupants. The 911 call recorded the passengers claiming to have “no brakes.”
November 2, 2009: NHTSA took the highly unusual step of publicly rebuking Toyota, calling statements made in the October 30th letter to owners "inaccurate" and "misleading.“
January 11, 2010:Toyota announced its brake override software fix, where the brake overtakes the accelerator if both are pressed, will be made global by 2011.
February 1, 2010:Toyota announced it had developed a plan to fix the accelerator pedals and that parts were being shipped to dealers so they can carry out the repairs. This occurs five months after the crash in San Diego.
February 24, 2010:Toyota President Akio Toyoda apologized during a congressional hearing for the Committee on Oversight and Government Reform. He pledged Toyota’s full cooperation with U.S. government officials investigating safety problems. He claims electronics are not to blame.
Soon after the recalls, an e-mail written by Irv Miller, then Toyota’s Vice-President for Public Affairs, surfaced on April 8th, 2010 that revealed Toyota had communication and transparency problems both externally and internally.
Initially, Toyota withheld information and misled consumers concerning information about the recalls. The true extent of how much was left unsaid my never have surfaced if it wasn’t discovered by mass media, which led many stakeholders to question the integrity of the company.
2. Prove it with action
Toyota expressed strong remorse for the trouble caused by their recalls through numerous apologies, but they never offered a solution. Toyota would have greatly benefitted by seeking a solution amidst the apologies.
3. Listen to the customer
It’s vital for Toyota to listen to their customers for obvious reasons. Their success as a company on that mutual relationship, and their expectations must be identified and fulfilled.
Toyota did both a commendable and condemnable job in regards to managing for tomorrow. While they rebounded well with public relations efforts, the short-term gain may be overshadowed by long-term problems ahead caused by clumsy communications at the inception of the crisis.
5. Conduct public relations as if the whole company depends on it
Public relations is not to be used strictly in times of emergency, and Toyota, like many other automotive companies, realize this now more than ever. A solid public relations presence will be crucial in ensuring Toyota doesn’t take steps backward in the wake of its recalls.
For nearly six months after the California accident, Toyota’s top management was nowhere to be found. In this study, character and integrity determined what course of action was taken and what would become of those actions.
7. Remain calm, patient and good-humored
Toyota did an excellent job at remaining calm during the beginning stages of the crisis. However, this patience eventually turned into inaction and launched the situation into a crisis.
1. Can simply seeking to embody the principles of The Toyota Way navigate the company back on the path of success?
3. What proactive measures could Toyota have taken leading up to 2009 that would have allowed them to prepare for the events that took place?
6. Will Toyota be able to improve its response in the future despite the cultural barriers?
Toyota has, for the past few years, has been expanding its business rapidly. Quite frankly, I fear the pace at which we have grown may have been too quick. I would like to point out here that Toyota's priority has traditionally been the following: First; Safety, Second; Quality, and Third; Volume. These priorities became confused, and we were not able to stop, think, and make improvements as much as we were able to before…We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that…I will do everything in my power to ensure that such a tragedy never happens again.- Akio Toyoda, statement during Congressional hearing on Feb. 24, 2010