Some might say that Toyota’s current crisis is a result of enormously bad luck, and they might be partly right.
Yet Toyota’s problems also appear to have been the result of a series of tiny flops, over and over, ranging from quality control to public relations disasters.
For example, it shouldn’t have taken until today for its CEO to address its safety matters in public
99% of your hard work is meaningless when 1% of the time you’re a complete joke.
We’ve put together a quick guide to the amazingly unfortunate serious of events that put Toyota into its current situation.
In April 2007, Toyota surpassed General Motors as the world's largest automaker. It looked like nothing could take down the Japanese giant.
''I've been in this business for 37 years, and what I'm seeing now is the continuation of a trend that I've observed for 37 years,' said Jim Hossack, a consultant with AutoPacific Inc. in Tustin. 'Toyota is getting stronger and stronger, and the Detroit Three are getting weaker and weaker.'
Source: L.A. Times
'In a move almost too strange to be fiction, Toyota is apparently advising its Toyota and Lexus brand dealers to zip tie loose floor mats to the seats in the 3.8 million vehicles affected by the recent safety recall. Of course, it's phrased much more eloquently than that...
The 'plastic wire ties' obviate the need to turn out a whole new fastening system for the mats and vehicles, allowing Toyota and Lexus dealers to continue selling new and used inventory.'
Source: Car Connection
Unfortunately, there appeared to be more to Toyota's acceleration problems than just floor mats.
Questions intensified regarding potential design flaws for the pedal itself.
This set the Toyota crisis into overdrive...
U.S. automakers offered incentives to Toyota owners, luring them to make the switch back to American brands after all the Toyota scare stories.
In January, as Toyota sales fell 8.7%, sales for Ford and GM shot up 34.4% and 23.5% respectively. All three major U.S. automakers are planning substantial production expansions in 2010.
Brian Jacoby @ Goldman: 'Ford stated that most Toyota customers tend to cross-shop Honda; however, we believe that Ford and GM may see some sales benefit in coming months associated with the Toyota recall. We maintain our US light vehicle SAAR forecast of 12.0 and 13.0 million units in 2010 and 2011, respectively. Ford expects a US SAAR of approximately 11.5-12.5 million units in 2010, and GM revised their 2010 SAAR estimate to 11.5-12.0 million units from 11.0-12.0 million.'
Source: Business Insider, Goldman Sachs
Secretary of Transportation Ray LaHood said in a statement, 'We're not finished with Toyota and are continuing to review possible defects and monitor the implementation of the recalls.'
On CNBC he then let loose saying people should simply 'stop driving your Toyota now.' Toyota shares tanked, perhaps forcing Mr. Lahood to come back and clarify his position.
He said he had misstated and that he intended to advise consumers to take their recalled Toyota model to the dealer to get fixed. But the damage had been done.
As Toyota Motor Corp.'s recalls spread to at least 7.6 million cars across five continents, President Akio Toyoda's only public comments on the matter have consisted of an impromptu, 75-second interview with a Japanese broadcaster in Davos, Switzerland. More than a week after the world's biggest carmaker said it would recall vehicles in the U.S. to fix defective gas pedals linked to unintended acceleration, Toyoda, 53, still hasn't addressed other media. The grandson of Toyota's founder has left the task to U.S. sales chief Jim Lentz and to Executive Vice President Shinichi Sasaki, who is in charge of quality control...
Toyota won't comment on Toyoda's whereabouts, citing company security policy, according to spokeswoman, Ririko Takeuchi.
For 15 years, Tokyo taxi driver Kiyomi Hashimoto has been a loyal Toyota man. Not once has he considered changing brands or even the possibility of car problems. But now, sitting in his black Prius, pondering the news of Toyota's recent U.S. recalls, there are cracks in his once armour-plated confidence in the world's biggest automaker. 'I never once thought I'd have a problem before,' he said.
'Now, I'm not so sure.' News that the preeminent icon of Japanese industry had halted U.S. sales of eight popular models because of a design defect -- after issuing recalls of 7.6 million cars and trucks in the U.S. in the last few months -- has had a sickening effect on the national psyche.
Source: L.A. Times
'Toyota has been able to stage its astonishing assault on world markets by maintaining ruthless quality and cost controls...
But while the rest of the world fears Toyota, insiders are concerned about the company's ability to manage its growth and maintain the quality of its products. The company now has 260,000 employees in 26 countries...
rapid globalization and production expansion has begun to strain its manpower supply. ...
Extensive computerization of the entire car manufacturing process, from design to production and distribution, is one of the methods that Toyota is adopting for quality control and cost reductions. But 'the potential risk of too much computerization is that we might launch new cars that are not tested in actual driving environments, such as in high humidity and other conditions,' one top executive confides.
That might cause unforeseeable problems. He also noted 'an explosive growth' of warranty claims for certain models, though they have not led to embarrassing recalls.' (August 2004)
Source: The Chief Executive via BNET
'The company screwed up, and any consumer with an affected model should get it fixed immediately. But without minimising the issue, we are talking 19 alleged fatalities among roughly 20 million Toyotas sold here over the last 10 years. That's roughly one death linked to the recall for every million cars Toyota has sold.'
Source: MSN Autos
'Toyota said its biggest ever safety recall would cost it up to $2bn (£1.25bn) this quarter'
'Fallout from Toyota's accelerator pedal disaster is already slamming Toyota's financials. Tatsu Yoshide, a UBS auto analyst in Tokyo believes that lost sales are currently running at $155 million per week.'
Even if Toyota ends up averaging $100 million a week of lost sales for two years, it could still amount to a $10.4 billion gouge before considering the recall and new manufacturing expenses needed to overhaul their production processes.
Toyota shares lost $21 billion of stock market value in just a week because of the PR disaster, and could keep crashing.
'The entire ordeal has been a public relations nightmare, and as you'd expect, Toyota's stock is taking a hit. Last week alone shares in the automaker plunged by a jaw-dropping 14 per cent. That's a drop of $21 billion (with a B) in market value.'
Toyota's market capitalisation remains $20 billion below its recent January 15th peak.
'Toyota is sending dealers a piece of steel about the size of a postage stamp that can be inserted into the accelerator mechanism and eliminate the friction that causes the problem.'
Source: Yahoo News