Posted by: David Welch on January 22, 2010
The bad news just keeps rolling in for Toyota. Even with some $29.6 billion in cash (as of Sept. 30) the company can’t seem to buy a break. On Jan. 21, the company said it is voluntarily recalling 2.3 million Toyota brand vehicles to correct a sticking accelerator pedal. This recall is in addition to the 4.2 million Toyota and Lexus vehicles that are being recalled to correct problems with floor mats sticking on the accelerator, the company said in a statement. The recalls came amid claims from some vehicle owners that either floor mats or the accelerator pedals were causing the car to lurch forward unexpectedly, causing accidents.
Plaintiffs’ attorneys have already been lining up. But for Toyota, the bigger damage could be done in the court of public opinion. Even though problems with the recalled models are not common, according to Toyota’s statement, this is just the latest in a series of large and embarrassing recalls. For its part, Toyota explained in its press release that, “the condition is rare, but can occur when the pedal mechanism becomes worn and, in certain conditions, the accelerator pedal may become harder to depress, slower to return or, in the worst case, stuck in a partially depressed position. Toyota is working quickly to prepare the correction remedy.” Here is the list of cars being recalled: 2009-2010 RAV4, 2009-2010 Corolla, 2009-2010 Matrix, 2005-2010 Avalon, 2007-2010 Camry, 2010 Highlander, 2007-2010 Tundra, 2008-2010 Sequoia.
Toyota is voluntarily recalling those cars to head off major problems or potential accidents. The company is known for handling recalls well. But the more pressing problem for Toyota is that these recalls and quality snafus can threaten the company’s reputation for quality. That image for great reliability is the foundation of the company’s sales success. For all of its prowess, Toyota is simply not known for having great styling or grin-inducing performance. Toyotaphiles appreciate the company’s quality, engineering and fuel-efficient technology.
Quality was supposed to be a given. And when problems started to appear, Toyota vowed it would make quick amends. Back in July 2006, former Toyota President Katsuaki Watanabe bowed deeply in apology at a press conference, according to a report in the New York Times. The company launched an initiative to solve quality problems, examine customer service and look at costs. After Toyota’s headlong expansion in the ‘90s and most of this decade, it seems they had lost control of some of the basic principles that made it such a great company. Watanabe was trying to reaffirm the company’s commitment to quality.
New CEO Akio Toyoda has redouble those efforts. If Toyota doesn’t get a handle on this issue, the company could make the same kind of missteps that Detroit’s automakers did when quality problems started cropping up in the ‘70s. Those problems gave consumers a reason to look elsewhere, creating opportunity for Toyota, Honda and Datsun—which became Nissan in the early ‘80s—to get a foothold in the U.S. market. It’s far too early to count Toyota out. The company isn’t near where Detroit’s carmakers were in the ’80s. But if the recalls continue, Toyota could be exposed to a resurgent Ford or to ambitious players like Hyundai-Kia and Volkswagen. Even General Motors is showing some signs of stability. All of those companies are on the march just when Toyota is stalling.