A dent in Toyota Quality - The Growing Toyota Recall Problems

[Marc]

From the International Herald Tribune:

The news arrives in letters that no car owner wants to receive. The power steering of their hard-to-get hybrid could fail, some learn, while others are told the tires on the small pickups could bulge and possibly burst. Still more owners find out their airbags may not inflate during a crash.

These recall notices are not from an American carmaker, but from Toyota of Japan, long known as the crème de la crème when it comes to quality.

Just as Toyota appears poised to pass General Motors and become the world's largest automaker, it has a growing problem with recalls that is sullying its carefully honed image.

In the United States, Toyota's largest market, the number of vehicles recalled soared to 2.2 million last year. That was double the number of vehicles recalled in 2004, and more than 10 times the 200,000 cars it recalled in 2003, according to the National Highway Traffic Safety Administration.

In Japan, the number of recalled vehicles has jumped 41-fold since 2001, to 1.9 million last year. And because many of the recalls are for vehicles that are more than 10 years old, analysts fear that another wave of bad quality news may be in store.

The situation has alarmed Toyota's top executives and angered the Japanese government. It ordered Toyota to explain itself, which it did in a report delivered Thursday, borne by the latest in a series of apologies by Japan's biggest auto company. In it, the company promised to create a new computer database to obtain information more quickly from dealers on repairs and complaints. Inside Toyota, the spate of recalls has triggered a flurry of high-level efforts to diagnose and fix the problems, which have afflicted everything from its treasured Prius hybrid, which has become the gold standard among fuel-efficient vehicles, to the small Tacoma pickup and even cars in its Lexus luxury lineup.

At Toyota's annual executive meeting in June, its outgoing chairman, Hiroshi Okuda, its new chairman, Fujio Cho, and its chief executive, Katsuaki Watanabe, all vowed to the gathered managers that the quality issue would be addressed, according to a senior Toyota executive who attended the meeting.

"The quality issue is a big concern. They're embarrassed about it," said the executive, who insisted on anonymity because the meeting was private. He added, "You think about Toyota, and quality is in our DNA. We are concerned about looking like the rest of the pack. The market is forgiving because of our long reputation, but how long will they be forgiving?"

Read more....

[Helmut Jilling]

Well, it proves Toyota is not perfect either. Howver, note certain passages I pulled from the full article, which sheds a interesting light on the difference between US and Asian OEMs. The emphasis with bold and underline is my markings:

The situation has alarmed Toyota's top executives and angered the Japanese government. It ordered Toyota to explain itself,...

Inside Toyota, the spate of recalls has triggered a flurry of high-level efforts to diagnose and fix the problems,

"The quality issue is a big concern. They're embarrassed about it," said the executive, ....He added, "You think about Toyota, and quality is in our DNA. We are concerned about looking like the rest of the pack. The market is forgiving because of our long reputation, but how long will they be forgiving?"

But executives inside Toyota know they cannot let the situation fester, because it ultimately threatens Toyota's ability to grow. If Toyota is unable to get its arms around the problem, it will have to pull back on its expansion plans, which are set to include more assembly and engine plants for the United States, as well as factories elsewhere.

The primary reason for the recalls is Toyota's overloaded engineering staff, company executives and industry analysts said. Despite its global expansion during the 1990s, it failed to hire enough engineers to keep up with production increases. And it kept most of its development in Japan, although it built research and development centers in places like Ann Arbor, Michigan. At the same time, a new Japanese law limited the amount of overtime worked by engineers, whose long hours on the job were the stuff of industry legend.

The result, say analysts, has been a number of errors introduced during vehicle development and fewer problems on the assembly line, which has been a more common cause of recent recalls at other carmakers like Nissan.

Another issue is that Toyota, like other global auto companies, has farmed out the development of crucial components to its suppliers, both companies with which it has been doing business for years, like Denso of Japan, and newer ones, like Delphi, the biggest American parts maker.

"I'm more concerned about the future," said Kunihiko Shiohara, an auto analyst for Goldman Sachs in Tokyo. "A fundamental turnaround in quality levels will take at least four years."

Seeking to staunch the flood of recalls, Toyota has increased the hiring of new engineers, bringing on 979 last year ...said Toyota planned to hire at least another 850 this year.

In a departure from corporate tradition that stressed spending a career at a single company, Toyota wants 200 of its new hires to be experienced engineers hired in mid-career from elsewhere.

In June, Toyota assigned a second executive vice president to its quality control division, and created a new senior managing director spot dedicated to improving quality

Though Toyota is not perfect, did you notice how the quality of their response is much different than the Big 3 would have been. Not a single accusation that "It's our suppliers' fault!"

Toyota said WE have a problem. I'm sure they will work with the suppliers to fix it, but they take the blame, themselves.

REFRESHING! Are you listening Big 3, or did you stop reading when you began to gloat? You could learn a lot from this, other than the obvious message that Toyota is not perfect either.

[Claes Gefvenberg]

In Reply to Parent Post by hjilling

Toyota said WE have a problem. I'm sure they will work with the suppliers to fix it, but they take the blame, themselves.

Yes, I noticed, and it is refreshing.

Good post.

/Claes

[Ken K]

Before you heap praise, maybe it's because Toyota also is part owner of many of their suppliers.

[qualityboi]

I guess my praise would come from that the top executive are alarmed (care) and the government is angered (hopefully not being solicited for a bailout like we do in the U.S.).

[chaosweary]

And I still haven't seen anything about their sludging problem with their motors 1993-2002...

[Baldrick]

A good point, chaosweary - I'm not taking sides in this debate (yet), but here's a link which I think both explains this problem succinctly, and also adds some fuel to the fire in this thread:

Toyota engines - The Sludge Problem - Toyota Corolla and Toyota Camry

[Baldrick]

Hot on the heels of yesterday's discussion, here's news of the US survey of the most reliable vehicles sold in 2003 - could this be the calm before the storm? Will Toyota be top of this list in 2 years?:

Toyota Tops Reliability Rankings in JD Power Survey