Wallace's World February 11, 2010, 4:39PM EST

The Real Scandal Behind the Toyota Recall

Fuzzy findings, media manipulation, and tort lawyers scare the public and destroy millions in shareholder and resale value, writes Ed Wallace

Story Tools

Following my own advice to go to the source, I called a few respected local Toyota (TM) dealers in the Dallas area to ask a simple question: "In the past 10 years, how many Toyotas have come into your service department with the complaint of unintended acceleration?"

The answer I got again and again? "None."

And they would remember: For new-car dealers across America, unintended acceleration is the most serious complaint a customer can make. Not because the situation exists as represented but because, as any auto industry insider knows, this condition can invoke a media firestorm whether it happened or not.

The newest story is that Toyota products are falling in resale value as a result of this issue. If true, this proves that our ability to remember widely reported, identical automotive complaints from the past goes down our collective memory hole intact.

Ask anyone who dealt in luxury cars what happened when the Audi 5000 unintended acceleration case panicked drivers in the mid-1980s. Owners of those vehicles rushed into competing dealerships trying to unload their automobiles, but retail sales for used Audis, already poor, had dropped off to nothing. Even wholesalers wouldn't buy them because they couldn't resell them. Audi dealers didn't want them. A typical bid for a one- or two-year-old Audi 5000 that originally sold for close to $30,000 often came in at $3,500.

Now, that's a serious hit to resale value.

A Trip Down Audi Memory Lane

What's ominous is that the Audi 5000 case seems to have set the example for how stories concerning serious defects in automobiles would be covered in the future.

Yes, there were people on TV (and in newspaper articles) who swore that their Audis, too, had become possessed and uncontrollable, and there's little doubt that they sincerely believed what they said. That does not alter the fact they were mistaken: In time, our government painstakingly tested every "possessed car," and no causative defect was ever found.

The Audi case seems to have foreshadowed a scenario occurring now with Toyota. This from Peter Huber's book, Galileo's Revenge, Junk Science in the Courtroom:

"The Audis, like other new cars, had come packed with sophisticated electronics to maintain idle, to regulate emissions, and to operate cruise controls. Never before had car engines been built around such sophisticated computers. So from the beginning, the car's electronics were numbered among the lead suspects. And after the accident, the brakes are always found to be functioning just fine. Always."

Sound familiar?

In the 60 Minutes piece on Audis' unintended acceleration that put this story over the top, they brought in William Rosenbluth to prove that Audis were defective on camera. As 60 Minutes correspondent Ed Bradley said, "We took a car that had already been involved in two sudden-acceleration incidents and, without his foot on the gas pedals, showed it could do this." Again from the book, Junk Science: "… and 30 million viewers saw it with their own eyes." What they saw was the gas pedal apparently moving under its own power.

But what the viewers didn't see was also revealed in Walter Olson's column, "It Didn't Start with Dateline NBC:" Off camera, they had drilled a hole in the vehicle's transmission and pumped extreme high-pressure air into it, which had the effect of moving the gas pedal down without the driver pressing it.

The audience and all of America came to believe that this Audi with two black marks against it was possessed. In reality, it was rigged.

As you'd expect, an Audi official appeared on that broadcast. He said his company had investigated these incidents and could find nothing wrong with their vehicles. Nobody believed him.