Feb 01 2010

Toyota’s Multi-Year Problem With Deep Denial

Published by Patrick Di Chiro at 12:03 pm under Idea Driven Marketing

Toyota’s US president and COO James Lentz finally went on the Today Show this morning to try to quell the growing concern and outright fear over Toyota’s massive vehicle recall.

As pretty much everyone knows by now, the mounting crisis grew out of Toyota’s problem with sticky accelerators that could cause, and have already caused, SUA (Sudden Unintended Acceleration).

Lentz’s appearance on Today was a smart move, but late in coming. Every day that Toyota has been silent on this unfolding crisis, the company’s famous and hard won reputation for quality, dependability and safety declined a little more. Brands are dynamic things. They can rise and fall based on how your treat and manage them.

Toyota’s big announcement today was that they had developed a "fix" for the sticky accelerators and would be shipping it to dealers as early as this week. The repair involves the inserting of a steel reinforcement bar into the pedal assembly that supposedly reduces the surface tension that can cause it to stick. The other repair that Toyota already announced was a modification to floor mats, which would prevent the pedal from getting trapped under the mat.

In his comments today, Lentz claimed that the Toyota vehicles under recall "are safe to drive, even before the repairs are made, unless drivers experience signs that the pedal has become worn or more difficult to use." Don’t know about you, but that is not exactly a vote of ringing endorsement from the Toyota president. To me, it is kind of a vague and slippery explanation.

The dirty secret here is that, according to some experts, the "fix" outlined by Toyota might not even solve the SUA problem in the long run. Toyota stated that they don’t believe that the electronics of the gas pedal operation (these "drive by wire" accelerator pedals no longer function mechanically, like the old days) have anything to do with the sticking problem. The truth is, however, that Toyota can’t really claim that with 100% certainty. They will just have to make the repairs and hope that the fix works.

Even more damning for Toyota was the front page article in today’s NY Times, reporting what other news organizations have also been saying recently, which is that Toyota had to be brought kicking and screaming into this recall and factory shut down. In fact, Toyota knew about serious problems with Sudden Unintended Acceleration in some of its models as early as 1999. Apparently, the government finally convinced (more like forced) Toyota to launch the recall to fix the problem.

Of course, Toyota finally took the step it had so long avoided because of the negative publicity over the terrible accident of a Toyota-made Lexus ES 350 sedan last August 28 near San Diego that killed four people. Prior to that crash, a panic-stricken man in the Lexus was heard on a 911 call saying that his car’s "accelerator is stuck." Then the crash happened and all four passengers in the Lexus were killed.

According to the Times piece, prior to last week’s recall announcement Toyota had already received more than 2,000 complaints of SUA and had gone through multiple government investigations since 2002.

Wow. That looks to me like a company that truly is in deep denial. Even by the standards of automobile manufacturers, who historically have never been known for their deep commitment to consumers’ safety and well being,Toyota’s head in the sand stance on this problem has been pretty breath taking in its irresponsibility.

Which leads us to today. Toyota is finally starting to react to the problem and communicate to the public. That is after keeping its customers and dealers pretty much in the dark for the past week. Before today’s appearance by President Lentz on TV and the company’s announcements, Toyota’s US management had been effectively silent on the issue. Ad Age just weighed in on the issue today, saying that the Toyota brand faced a billion-dollar battle ahead to regain its formerly gold plated reputation.

As I have stated previously, Toyota has not exactly distinguished itself so far in its handling of this major crisis. When Lentz stated in a Wall Street Journal interview that he believes the impact on Toyota sales will be "minimal," it sounded to me like a severe case of wishful thinking.

Toyota still has a long way to go to repair the reputational hit the brand has taken, and continues to take, because of this crisis. So far at least, a lot of those hits have been self inflicted.

 

 

 

 

 

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