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Secretive Culture Led Toyota Astray (wsj.com)
48 points by DanielBMarkham on Feb 10, 2010 | hide | past | favorite | 42 comments



I'm not sure why everyone thinks Toyota has failed. If two of the US automakers hadn't been bailed out by the US Government, Toyota (with all of its current challenges) would have bought up thousands of dealerships and dozens of plants in the US and would be poised to totally dominate the worldwide automotive market.

Instead, it had a bit of bad luck (requiring a recall) and it now faces stiff competition from two companies kept in business by massive government subsidies.

I think most people would still rather buy a Toyota than a Chrysler, Ford, or GM vehicle, on the basis of both safety and reliability -- and increasingly performance and styling.

The fact is, Toyota already won in the marketplace. It deserves to have a near monopoly because it fought harder and smarter for decades, slowly earning customer confidence and loyalty. What were the fruits of its labor? Now it gets to fight against massively subsidized ghosts from its past who have already lost the battle but are reanimated by politicians waving American flags, etc.

And now the American press seems to be having a field day claiming that Toyota has failed after one major recall. Note that similar stories about Toyota's demise surfaced after the firm had its first unprofitable quarter ever at the same time that two US automakers became insolvent.

This anti-Toyota propaganda really boggles the mind.


They hid a problem that was killing people. That is why they are now getting negative publicity.


Are you serious? The only reason any car companies do recalls (ever) is if the cost-benefit analysis favors it.

cost of recall < possible bad publicity + lawsuit damages


Could we have a little more in-depth analysis than "I saw fight club?"



I didn't see fight club, fyi. Not sure what you mean. Are you under the impression that the recall decision is more complex than that? Most bugs are fixed in the next model year or ignored.


I have been involved in automotive recalls as a quality engineer and believe it or not things have advanced in the last 40 years and this is no longer how recalls are handled. In fact the cost of the recall is usually one of the last things discussed after the decision has already been made.


The failure is not the recall -- that happens. The failure is that they knew about the problem and lied about it.


All cars have lots of "known bugs", many of which could cause loss of life but are not subject to recall.

Why? Because there is a cost benefit equation that car companies use. If the cost of doing a recall is less than the possible bad publicity + lawsuit damages.

Toyota is no different, if anything, that they decided not to mention it suggests it's a low risk (if the cars killed even a few dozen people the cost the recall would have been obvious from the beginning).


It was not a case of "not mentioning" the problem. They actually hid the truth and lied.


First, Ford didn't take any government money and actually reported a profit for the past year.

Second, there's a difference between a subsidy and loans. GM and Chrysler got loans. Now, they were loans they couldn't have gotten on the open market because they looked too toxic. However, GM is now saying they'll be able to repay the loan pretty quickly. That indicates that investors misjudged the risk. Granted, it could have turned out otherwise (and I was one of the people that thought that it would have).

And I think that people feel betrayed if a company has a potentially fatal flaw in their devices. This isn't an issue of mere reliability. If my car is unreliable, it's annoying and I have higher repair bills. If my car speeds up to 100MPH and I can't stop it, I can die. Those two things sit differently with consumers. And it looks like Toyota tried to write it off as nothing when it was something and tried to protect their image rather than their customers lives.

It's one of those things: if a company has produced a wonderful, superior, reliable vehicle that kills 1 in 100,000, are they better? Most would say no, but it's easier to hide and it looks like Toyota was trying to hide their problems.

Toyota isn't failed, but this will be a huge setback for them (and it should be). If you hide problems that are fatal to people, you deserve to have your sales drop. There's an outrage over that.

Toyota screwed up big time for many years. The US auto makers also screwed up for many years. The US auto makers troubles came to light slowly in a way that was mostly about finances, wages, etc. Toyota's screw up is about human fatalities and came to light very quickly. That's a lot of the difference in the way it's being treated by the media.


The "Cash For Clunkers" program which cost the tax payers billions was an indirect subsidy for dealerships and automakers.

The most popular new car under the program was the Ford Focus so Ford did benefit from government spending.

Edmunds estimates that the Cash For Clunkers program actually cost tax payers $24,000 for each additional new car sold.

http://money.cnn.com/2009/10/28/autos/clunkers_analysis/inde...

http://autos.yahoo.com/articles/autos_content_landing_pages/...


Excellent point. Note too that the program only subsidized certain sorts of vehicle upgrades (the kind that benefit US companies).

Most anyone could have improved overall MPG by simply buying a Prius, but the incentives were structured not to give any additional incentive to such purchases.


>If my car speeds up to 100MPH and I can't stop it, I can die.

Is it just me, or is this a design problem just waiting to be solved.

Not the accelerator design, but to counter the fact that although there are numerous ways to either slow down the car or bring it to a halt that consumers simply weren't aware of.

Yes, you can shift into neutral. However, drivers didn't realize that. Yes, you can also turn off the engine. However, drivers didn't think of that.

I had a friend years ago (college days) in which the brakes in his Trans-Am decided to not do much of anything. Boiled off brake fluid? Bad master cylinder? Overheated rotors? Who knows. Rather than downshift, or put it in neutral, or turn off the engine -- and then wait and use the handbrake -- he figured putting it into a tree at 60mph was his best option.

The fact that drivers will not think to employ a variety of methods to slow down the car screams to me that there's something that doesn't exist, that should, that better caters to the average driver's instinctual reaction (which currently is depressing the brake pedal as hard as possible, and not giving up until the car stops).

I realize that the vehicle could've taken both brake and accelerator inputs and simply given total priority to the brake, which would've mitigated many accidents, but there are other situations (like my friend who didn't think things through) which probably merit a "panic button" solution.


On the other hand, it shows just how reliable cars are that we don't think about those things.

Generally people are quite foolish while driving. Have you noticed how people driving heavy SUVs with 4 wheel drive (which get better traction in the snow) think that they can safely travel 65 mph on icy roads? It seems not to occur to them that the vehicle has lots of momentum and will slide on ice.


The fact that drivers will not think to employ a variety of methods to slow down the car screams to me that there's something that doesn't exist, that should

Real drivers education, and real demonstration of your competency to operate a vehicle before getting a license?


"Second, there's a difference between a subsidy and loans. GM and Chrysler got loans."

General Motors is currently a wholly owned subsidiary of the United States Treasury. This is a point of some significance and worth avoiding glossing over.


GM didn't just "get loans". It went bankrupt and is now majority-owned by the government.

The $7 billion "loan" GM received, and plans to pay back, is a tiny fraction of the $50 billion in assistance it's received. And GM is still losing money. So GM is really just paying back the loan with other subsidies it's received.


I didn't mention Ford getting bailouts, did I?

BTW loans at below market interest rates are a subsidy. Calling them loans is just doublespeak.

And turning off the key stops any car. The people who died when the car got to 100 miles per hour would probably also have died in the midst of nearly any minor malfunction that led to a bit of panic.

That's not to excuse the error, but as I mentioned, I think out of control speed "bugs" tap into the public psyche a bit more than all the other possible equally risky bugs.


Another uninformed comment.

If you drove a Prius (I do) then you would know A) Prius's don't usually have a key in the ignition and B) you can't turn the car off while accelerating.

Do you understand this is a software issue, chief? You have no clue what is going on. For all you know, the entire car might be unresponsive. Ever had a computer hang on you?


I also have a Prius, and though I haven't tried it, I've read that you can in fact turn it off while accelerating by holding down the power button for three seconds.

Though make sure you can go straight for awhile, as it will also disable power steering.


If you are going fast, which presumably in this situation you are, your power steering isn't giving you much boost anyway. Losing power steering doesn't mean you lose steering, you probably wouldn't even notice it until you slowed down


Most of the problems were no pre-Prius models which you could turn off w/ the key. The Prius may be an exception.

What difference does it make if a problem is "hardware" of "software" (or even user error for that matter), if it's common enough and if it results in loss of life?

I was not arguing that Toyota shouldn't fix the problem, only that bugs are routine and we shouldn't pretend that there is negligence here.


Jeez... I'm just saying it's not the drivers screwing up. You actually can't stop the car.


Sometimes turning off the key doesn't work: http://theage.drive.com.au/motor-news/cruise-control-terror-...

Also - has has already been mentioned - the Prius doesn't have a key.


So how is this different from say the Ford Pinto exploding gas tank or the Ford SUV/Firestone tire rollovers? Secretive corporate automaker culture hardly seems limited to Toyota.


I'm having trouble tracking down a citation, but Marketplace pointed out that this is the first of these recalls to happen since the burgeoning of social networking. Pintos got written up in newspaper headlines. The SUV/Firestone debacle probably got snarky bylines on Fark. The Toyota "crisis" happened in the full bloom of Twitter et all. The commonality of foreign cars means that Bob can post to Facebook to warn any and all of his friends that they should check their driveway for any of the recalled models.

Furthermore there's an angle on the story: Toyota's reputation is build on reliability. I can't speak for the Pinto, but I don't recall Ford's SUV having that reputation. With sentiments currently against big business, suggestions of deceit are juicy linkbait.

Beyond that, some speak of Toyota's timeliness in issuing an apology. The Asashi, 2nd leading Japanese national newspaper, accuses them of apologizing too late. I personally wouldn't know how much weight that holds, but I find it interesting.


All cars have "bugs" that could result in the death of the operator. It just depends on what the probability of death is (and how traceable it would be).

Car companies' risk management departments decide to do a recall when the cost of doing one is cheaper than not doing one. End of story.


All these stories made me thinking that it makes sense to have mandatory black boxes in new vehicles. This will help to investigate many safety problems and other accidents. It's more important to have such black boxes in the computerized cars: all this software needs to be debugged, and you can't debug if you don't know what happened.


I'll go along with it as long as you can't retrieve the data without a subpoena (which I assume is easy to acquire during an accident investigation, but much more difficult to acquire "by asking").


This was an interesting article if only for the nice summary as I wasn't completely aware of the situation.

The tidbit in the end surprised me though- Toyota is trying to hard to spin that they stopped selling cars as a safety precaution. Turns out the NHTSA forced them to stop selling.


Would you buy a Toyota today? I would. Do you really think that the NHTSA might not be doing this partly as a handout to the government's own auto companies (Chrysler and GM)?


It does benefit other auto-makers, but Toyota has admitted that there are flaws in its vehicles that can kill people. It doesn't mean that Toyotas aren't otherwise good, reliable cars. However, they covered up a fatal issue and they shouldn't be allowed to sell new cars with the issue and they should have to repair the ones with the issue.

Should Toyota be allowed to sell cars with this known fatal flaw? Of course not! Should they have to recall and repair cars with this known fatal flaw? Yes! Those are the things that have happened to Toyota. It's not some conspiracy case of the NHTSA trying to give domestic firms a leg up. It's a case of Toyota having to fix a fatal problem with its vehicles.

How is this different from the Ford/Firestone incident from the past? Was that the NHTSA trying to give Toyota a leg up by requiring Ford to fix that problem?


All cars have fatal flaws, they just occur with some probability between 0 and 1.

The flaw you are mentioning also has a probability of killing someone of between 0 and 1.

The point is that car companies decide when to do a recall based on a cost/benefit analysis and not just because there is a low probability flaw that could occasionally be fatal.


Did you miss the part where the NHTSA opened its investigation before the auto company bailouts?


Do you think the bailouts happened just as the auto companies were beginning to have an inkling that things weren't going well?


Not at all, but do you think the NHTSA knew anything about the bailouts years before they happened?


Hah, no, but the same sentiment of wanting to help out the domestic automakers that motivated the bailout existed prior to the bailout itself.


Automobiles are incredibly complex and I don't think anyone really faults a company for having to issue a recall to fix a problem. What's unsettling about Toyota, though, is the coverup. They attributed the problem to floor mats and even blamed drivers for adding extra floor mats. This wouldn't be an issue if Toyota had just been upfront from the start and not tried to sweep their problems under the rug.


The idea that a software/firmware bug in the electronics that controls the gas pedal could kill me is deeply, deeply unsettling. If you put electronics into basic systems of a car like this, I want it to be like plane electronics: three of everything, with a majority rule.


I've worked in an automotives parts plant, and let me tell you right now: be afraid, be very afraid.

Well okay, that's overly dramatic, but your expectation of cars being built like planes is just not happening, nor is it likely to ever happen.

The fact of the matter is, car prices are something that is constantly under intense consumer and competitive pressure. Every auto maker wants to make their cars cheaper and cheaper, and at the end of the day something has to give for the prices consumers demand... this includes redundancy and QA.

In the short time I was in the industry, I was involved in multiple recalls - none of which as deadly as Toyota's here, but all of which were the direct result of cost cutting. In two of those recalls, the blame lied solely on using cheaper, brittle plastic parts as a cost-cutting measure applied by the major automakers. Not that they're pocketing the savings of course, those generally get passed straight onto you, the consumer.

Shortly after I left the industry Toyota unveiled the Camry redesign - and I remember remarking that something bad had to happen with this car. It gave way too much bang for your buck, I cannot imagine the invisible corners that were cut to bring this vehicle to market. Now I suppose we know - and the age-old mantra still rings true: there ain't no such thing as a free lunch.

Keep that in mind when you buy your next car, seriously. The plant where I worked made parts for everything from cheapo Pontiacs to expensive Mercedes - and let me tell you, you do get what you pay for. Disregard ignorant laymen who insist that the expensive marques are nothing but branding, there is a very, very real difference in what you're getting (and that includes tolerances, redundancy, and testing level).


Reminds me of Fight Club.

"A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one."

What a gift this is to the lawyers involved in suits against Toyota for acceleration related wrecks. It appears they knew about the problem and stalled fixing it while people died. A jury will eat that up.




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