Tuesday, January 26, 2010

Little unknown fact about Toyota's Recall

As most of you know, Toyota announced a recall of 2.3 million cars and halted immediate sales of the following cars due to an unintended acceleration problem:
• 2009-2010 RAV4
• 2009-2010 Corolla
• 2009-2010 Matrix
• 2005-2010 Avalon
• 2007-2010 Camry
• 2010 Highlander
• 2007-2010 Tundra
• 2008-2010 Sequoia

A few people have called me and asked if I could provide any insights.  While I am going to refrain from attempting to explain in detail about what might have caused the issue, one common theme becomes very evident when I saw the list above.

First, all of the cars above are US-built cars, and second, they all use an accelerator mechanism built by two suppliers: Denso and CTS Automotive.  The Japan-produced Camry hybrid and Highlander hybrid, for example, are NOT in the recall list.

What is fascinating is that the Denso-supplied acceleration mechanism does not appear to be causing the issues. In fact, the reported issue appears to be coming from vehicles equipped with CTS automotive-supplied parts.  It's interesting to note that Denso - Japan's largest automotive supplier and Toyota's number-one rated supplier - is supplying an accelerator system that is slightly differnt than CTS's.  CTS Automotive, which is now in the center of this investigation, is an American-based supplier located in Indiana.

I am not in a position to point fingers or make any dramatic statements, but yes, there is a "pattern" and "cause and effect" going on here.  I am sure that once Toyota completes the investigation, the root cause will be crystal clear, but this is as much insight as I can provide at the moment.

I am careful to point out that this is not a "Japan vs US" supplier issue, nor am I implying that US-built cars are inferior to Japan-built ones. In fact, in JD Power's quality surveys, the US-built cars are often rated the same or even higher than Japan-built vehicles. 

I am simply pointing out the facts and you can make your own conclusions.

So how is Toyota handling to solve this problem?

On Jan. 11. 2010, Yoshi Inaba, president of Toyota North America, said that Toyota, will deal with the first recall involving floor mats, by installing a brake-override system on all new Toyota, Lexus and Scion vehicles, beginning this month. He also said the new system and reshaped pedals "absolutely" should resolve the problem of unintended acceleration. "Inaba was appointed to his post last year to deal with sagging quality and increased recalls affecting Toyota's North American–built vehicles. We must be closer to the market. Every day is a lesson. This is one we learned the hard way," said Inaba.

As you would expect from Toyota, they are not HIDING the issue or running away from it.  For that matter, they are facing it head-on and solving it actively in a spirit of kaizen.  You may want to note that the recalls are "voluntary recalls," meaning that Toyota was not forced to recall by the authorities.  They are proactively recalling the vehicles to ensure that all possible causes are eliminated immediately, to ensure the safety and satisfaction of their customers.

 Toyota is not a "perfect" company, but instead, I see them as a "learning" and "problem solving" company.  They will learn from this and emerge as a stronger company, I am sure.


greg.cameron said...

I spent 14 years working in various managerial capacities at Ford Motor Company. I have also spent years and years admiring Toyota and TPS principles from afar and in the last while immersing myself in the disciplines of TPS. So at this time it's interesting to sit back and watch the vast contrast between the two companies in times like these.
Toyota has faced the press and went into action (questionably a little late) but nonetheless they have moved forward and shuttered sales, operations etc and have embraced this 'problem' and put the whole company at work toward resolution.
Rewind to Ford when the Firestone issue happened. Ford immediately went into damage control mode in the press, kept on producing, dropped Firestone like a hot potato. Subsequently Ford and Firestone spent the next few months and probably years slagging each other and pointing the finger.
Who's right? Who's wrong?
I do know one thing; I would much rather be part of a 'problem solving' organization then not.
I love TPS, but obviously still have a great love for Ford Motor Company (I have a lot of pension money tied up there!!!)
So my point of view is this; I hope Toyota flourishes and comes out of this stronger than ever. Why would an ex Ford guy say this? It's simple, if they do they are stronger. Competition will only keep Ford and other competitors on their toes, forcing them to raise the bar and further embrace TPS and all it's principles!

Lean Sensei said...

Thanks Greg for your great comments. I appreciate your "can do" attitude and your desire to make everyone and everything better everyday - that's what kaizen is all about!.

Josh said...

Just imagine if it was a domestic manufacture…. It’s quite possible that there wouldn’t be a recall let a lone all the media attention. In the past, domestic manufactures have simply marshaled their accountants and statisticians behind closed doors and concluded that its cheaper take no action at all. The Pinto being a case in point and something Ford should never be allowed to live down.


Ironically Ford will likely be one of the larger short term beneficiaries of Toyota’s high ethical standards which have compelled Toyota to make its largest recall ever.

Lean Sensei said...

So true...because in Toyota's case, they proactively moved forward with the recall. In the past, other manufacturers were often forced to recall the cars because they refused to do so voluntarily. Despite the negative media exposure, Toyota is managing it the best they can, I believe.