Midterm Grade for Toyota: 'C' for Its Accelerator Defect Response

Toyota Motor Corp. (TM) has announced a fix for its rogue accelerator pedals, which will come as a relief to drivers of the automaker's vehicles who been terrified that a stuck pedal might send them whizzing out of control. While it's too early to give Toyota a final grade on its handling of the accelerator pedal problem, I'd give the company a C for how it has dealt with it so far.Toyota's announcement this morning marks the beginning of a pair of long processes: fixing millions of vehicles, and restoring its reputation. The defects that will be repaired under the recalls affect the accelerator pedals in more than 8 million vehicles and come in two forms, according to The New York Times. In 4.1 million vehicles, worn pedals can become "hard to depress, slow to spring back or stuck partially depressed." In 5.4 million vehicles, a design flaw "traps the pedal beneath the floor mat." Several models have both problems and are covered by both recalls.

According to The New York Times, Toyota will begin fixing accelerator pedals in millions of recalled vehicles this week, with some dealerships staying open 24 hours a day to speed up the process. Toyota claims that it has "rigorously tested" its solution: installing a steel bar into the pedal assembly that reinforces the pedals to eliminate excess friction.

This fix will take time to complete. According to The New York Times, the parts needed are already on the way to dealers, and Toyota has already begun training workers how to make the repairs. But it will take weeks for owners of the affected vehicles to get letters from Toyota inviting them into the dealerships to get the repairs. Toyota is urging its customers to wait until they receive a letter before contacting their dealer for a repair appointment.

There are good and bad aspects in Toyota's handling of this situation.

On the negative side, there's the fact that Toyota knew about this problem as far back as 2004 and decided it was too small to announce to the public and fix. And I don't think the announced fix will do anything for those vehicle owners whose problem involves the accelerator pedal getting trapped under the floor mat. Perhaps the company plans a separate announcement for those owners. More broadly, as I wrote in a previous article, this problem reflects a 2002 shift in Toyota's values from quality to growth -- which threatens its long-term market position.

On the plus side, Toyota appears to have voluntarily taken some big financial hits -- both through stopping production and through paying for the massive recall to fix the problem.

It remains to be seen whether this pedal repair will work, and whether other quality problems will emerge that resulted from Toyota's change in values. To truly recover from this problem, Toyota must return to its original corporate values: The company will need to invest a hefty chunk of its $31 billion in cash in reinventing its design and production processes. Such a deep change in its operations will be essential if Toyota intends to restore its quality to the highest level in the industry.

People who have experienced the sheer terror of driving a vehicle that suddenly accelerates out of control will need to see years of top quality ratings from Toyota before they're willing to go back into a Toyota showroom to buy another one. To achieve that, Toyota will have to restore quality to its former first-priority status. Until we can look back on a few years of that effort, it will be too soon to give Toyota a final grade on its response to these defects in its vehicles.
Read Full Story