Will Today's Recalls Finally Give Detroit an Opening?

When it comes to auto recalls, Toyota Motor (TM) is today the focus of much media attention and regulatory scrutiny. Reports of unintended acceleration and braking problems have led to four separate recalls of 8.5 million cars by the Japanese auto maker, while U.S. regulators continue to investigate other complaints, such as steering problems in 2009-10 Corolla models.

That has led to consternation among some consumers who now question the wisdom of purchasing Toyota products and even those of rival Honda Motor (HMC), which Wednesday expanded a previously announced recall of cars with overly powerful driver-side airbags. Also today, Republicans said they want Toyota CEO Akio Toyoda to testify before Congress this month, providing an open exchange before the American public.But it wasn't that long ago that domestic cammakers bore the brunt of consumer concern and anger about lapses in quality and safety. In the 1970s, Ford Motor's (F) Pinto made headlines when some models caught fire after being rear-ended in collisions, resulting in hundreds of injuries and deaths, according to a 1977 exposé by Mother Jones magazine. Though never recalled, the Pinto has since become synonymous with shoddy American products and corporate ineptitude. Ford executives concluded at the time it was cheaper to pay claims to accident victims than to implement costly design changes.

Then, in the early 1980s, General Motors was caught in public crosshairs after its recently introduced line of compact front-wheel drive "X" cars (remember the Chevy Citation?) were recalled 10 times for items ranging from faulty fuel-tank clips to cracked steering gears. Most dangerous among the problems was one involving the models' rear brakes, which locked up unexpectedly during moderate braking, causing drivers to lose control. The government said accidents related to this defect led to 71 injuries and 15 deaths, Time magazine reported in 1983.

Overrated and Overcriticized

Decades later, domestic auto makers still suffer from the stigma that arose from those problems. In fact, Toyota and Honda owe a good deal of their success in the U.S. market due to concern consumers had about the quality of American cars. The belief was -- and for many still is -- that Japanese-made vehicles were simply better designed and manufactured.

That raises the question of whether that perception is still accurate today. "I don't think Japanese quality was ever all it was ever cracked up to be," says John Wolkonowicz, senior auto analyst at IHS Global Insight. "It was sort of the general consensus of opinion that wasn't entirely true."

American cars, even at their worst, were never as bad as people believe they were, Wolkonowicz says. And Japanese cars, even at their best, were never as good as they get credit for. He acknowledges that U.S. brands suffered from significant quality issues in the late '70s and early '80s as Ford, GM and Chrysler scrambled to downsize their vehicle fleets. But by the mid-'90s, Detroit started to close the gap in quality and has been churning out better products year by year.

Wolkonowicz points to surveys done by Consumer Reports magazine that show the quality of Ford products are on par with that of Toyota and ahead of Honda, with GM not far behind that group. Chrysler, however, still lags significantly. The biggest obstacle domestic automakers face is convincing consumers that their cars really are good, Wolkonowicz says. "The public simply doesn't want to believe it, because it goes against the known truth."

Nowhere to Hide

Improved quality, however, hasn't necessarily resulted fewer in recalls. Auto makers today operate in much a different environment than they did 30, 20 or even 10 years ago. The instant dissemination of information via 24-hour cable news networks, Internet sites and social networking media means potential problems become much more quickly known, says Jake Fisher, senior automotive engineer, at Consumers Union, the Yonkers, N.Y.-based publisher of Consumer Reports.

"We're in a situation where defects, as small as they be, get scrutinized, and they do become public," he says. That puts increased pressure on manufacturers to take action. And while recalls are getting vast attention these days due to Toyota's woes, the practice isn't rare. In fact, Fisher says, with the auto industry, recalls are "almost commonplace."

Further, he says, that's not a bad thing. Some of the same technologies that alert people to stories about incidents related to, say, faulty brakes, also enable manufacturers to quickly contact customers to prevent the problem from snowballing. "It's something good that they have the ability to do," he says, even if it means inconveniencing millions of people in the process.

"More Reliable Every Year"

The mass adoption of technology in all its forms may have some consumers blaming it as the source of auto makers' problems. But Fisher says consumers shouldn't be concerned that more gadgetry will lead to greater numbers of recalls. He points to Toyota's high-end Lexus LS 460 sedan, one of the most tech-laden cars on the road (and one shown in ads as capable of parking itself). It has so far gotten top marks for reliability. "I don't think you can point at technology making cars unreliable," Fisher says. According to CU's data, "cars are becoming more reliable every year."

Consumers may not believe that while Toyota is seemingly in the midst of a recall-a-thon, and whether U.S. carmakers start gaining real ground in perceived quality also remains to be seen.
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