April 20, 2024

Recall Study Finds Flaws at Toyota

The seven-member panel, created last year by Toyota and headed by a former United States transportation secretary, Rodney E. Slater, did not try to identify whether any electronic defects could have caused vehicles to accelerate suddenly. A federal investigation found no evidence of an electronic problem, mirroring Toyota’s assertion that the problems were limited to defective accelerator pedals and ill-fitting floor mats.

But Monday’s report said Toyota had been slow to discover the pedal and floor mat issues because it viewed complaints made to the company or to federal regulators about sudden acceleration skeptically and defensively. It said Toyota had failed to apply the principles of its manufacturing process, known as “the Toyota Way” and built around the concept of detecting and responding to problems quickly, to evaluate criticism from external sources.

The report described Toyota’s attitude toward regulators, which fined the company nearly $50 million for taking too long to initiate recalls, as “adversarial.”

“The very culture that works so well for them when things are stable and predictable really doesn’t work when you’re dealing with a fast-paced crisis,” Jeremy Anwyl, the chief executive of the vehicle information Web site Edmunds.com, said. “If you had to characterize a company that was sort of uniquely vulnerable to this, it’s Toyota.”

The recalls dealt a devastating blow to Toyota. The company has been struggling to overcome the damage done to its once-spotless reputation, and the effect has been evident in its sales.

Toyota was the only major carmaker to report a decline in its sales last year, while the rest of the industry experienced a 13 percent gain. It has continued to lag its competitors in 2011 even as small, fuel-efficient cars — its strength — become more popular.

The report said Toyota had treated safety differently from other manufacturers, by lumping it into the larger issue of “quality” and making it part of everyone’s responsibility rather than assigning it to specific executives and employees.

“Safety and quality are very different attributes, and a process that produces quality vehicles will not necessarily produce safe vehicles,” said one panel member, Brian O’Neill, a former president of the Insurance Institute for Highway Safety. “This safety philosophy might suffer from the old adage, ‘When everyone is responsible, no one is accountable.’ “

The panel members met with numerous Toyota executives, talked with the president, Akio Toyoda, shortly after the March earthquake in Japan by telephone and visited many of the company’s plants and offices to study what happened leading up to the recalls. The panel is made up of people outside the company who are being paid by the automaker, but members declined to reveal their compensation, citing confidentiality agreements.

Though some said they had been longtime Toyota and Lexus drivers, all insisted that they had acted independently, and they conceded that Toyota was unlikely to follow all of their recommendations.

The report said Toyota had taken some important steps toward improvement, including the appointment of a global chief safety officer, but it made many additional recommendations. It said, for instance, that Toyota should have a single executive oversee its North American operations, which now operate as separate sales, engineering and manufacturing organizations, each reporting to executives in Japan.

Some of the panel members suggested that the seriousness and frequency of the sudden acceleration incidents had been overblown.

“Any machine built by any company, as long as they employ humans, is going to be imperfect,” said one member, Norman R. Augustine, a former chief executive of Lockheed Martin. “The record for Toyota is that safety issues are so infrequent that, statistically, one should be very comfortable driving a Toyota or Lexus.” Mr. Augustine added that he drove a Lexus.

Among the top recommendations by the panel is for Toyota to decentralize its corporate structure and break down the “silos” within its organization that “hindered information-sharing and contributed to miscommunication.” The report concluded, “Toyota has erred too much on the side of global centralization and needs to shift the balance somewhat toward greater local authority and control.”

Toyota said it had already given more decision-making authority to executives outside its headquarters, particularly in North America, where it created a position of chief quality officer more than a year ago. The company also has added more time for testing into the development of new vehicles.

“Over the past year, Toyota has learned a great deal from listening to the panel’s valuable counsel,” Mr. Toyoda said in a statement. “Their advice has been reflected in the meaningful steps we’ve taken to give our North American operations more autonomy and become an even more safety-focused and responsive company.”

When Toyota created the review panel last year, company officials said it was intended to exist for two years. In its second year, the panel is charged with monitoring how well Toyota carries out its recommendations and their effectiveness.

Although the panel is financed by Toyota, analysts said they saw a genuine interest within the company in repairing problems uncovered by the investigation. The recalls, compounded recently by the earthquake in Japan that has disrupted production for months, have left Toyota on the defensive and eager to regain some of the momentum it lost.

“I have no doubt about their motivation,” Edmunds.com’s Mr. Anwyl said. “Now it boils down to execution.”

Article source: http://feeds.nytimes.com/click.phdo?i=8e353fb7394f7aa9560a0c1e4bd19ffd

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