Toyota on Trial: Congressional Hearings Expose Deepening Scandal

Strategic Insights -

Toyota's U.S. sales chief, Jim Lentz, struggled to contain the fallout from the company's recent recalls, acknowledging that the automaker has "outgrown" its engineering resources and failed to keep pace with growing complexity in its product line. In a dramatic hearing, Lentz confessed to not being "totally" certain that the current recalls will prevent future cases of unintended acceleration. The company faces increasing pressure from lawmakers, who are demanding greater transparency and accountability over safety issues.

Key Takeaways:

  • The problem of runaway Toyotas is not solved, with some 70% of reports of unintended acceleration remaining unresolved by the current recalls.
  • Japan has historically made decisions about recalls, but this is changing, as evidenced by Toyota's global head, Akio Toyoda, accepting full responsibility for safety problems and apologizing for the Saylor family tragedy.
  • Toyota has not kept up with its own growth in the U.S., resulting in a failure to address engineering complexity and potentially contributing to safety issues.
  • The company will install brake-override systems on vehicles that can accommodate them, including those already in customer hands, to serve as another line of defense against unintended acceleration.
  • NHTSA has engenders as well as advanced electronic expertise and may be more prepared than initially assumed to investigate complex electronic malfunctions.
  • Toyota has not previously sent emergency teams to investigate severe cases of unintended acceleration, although Lentz agreed to do so within 24 hours of such an incident.
  • Rep. Edward Markey expressed skepticism over Toyota's claims of addressing the source of the problem, stating "You don't know if you've solved the problems, do you?"
  • The investigation by the U.S. Attorney for the Southern District of New York into Toyota's actions regarding recalls may bring more charges in the days to come.
  • Consumer advocates worry about Toyota's reasons for stumbleing, so their quickly recalled accelerators may knowingly break during driver shell shock.

Statistics:

  • 8 million: The number of Toyota vehicles recalled in the U.S. this year for two problems associated with unintended acceleration.
  • 70%: The proportion of reports of unintended acceleration that remain unresolved by the current recalls.
  • 34: The total number of deaths linked to runaway Toyota and Lexus vehicles by the government.
  • 125: The number of NHTSA engineers, including electrical engineers, to assess complex electronic malfunctions.

Sources:

  • [Healey, J.R., and O'Donnell, J. (2010, February 28). Toyota on Trial: Congressional Hearings Expose Deepening Scandal. Washington, D.C.: Washington Post.]
  • [Toyota. (2010). Annual Report 2009.]
  • [National Highway Traffic Safety Administration. (2010). Unintended Acceleration.]