Toyota announced on Tuesday that they would stop selling 8 Toyota brand models until they had a proper fix in place for problems involving their accelerator pedal system. According to news reports this morning, Toyota was legally required by the National Highway Traffic Safety Administration to stop selling the cars. It's not clear at the moment why Toyota waited five days to do so. Whether their move to suspend sales came yesterday or last week, the effects of the news will be massive for the automaker.
Last week the company issued the advance notice of a safety recall, but continued to sell the vehicles that needed attention. That disparity created confusion in the marketplace.
“Helping ensure the safety of our customers and restoring confidence in Toyota are very important to our company,” said Toyota's Group Vice President Bob Carter. “This action is necessary until a remedy is finalized. We’re making every effort to address this situation for our customers as quickly as possible.”
The move to stop selling all cars that need the remedy (see table below right) appears to be the right move for the company to make, but it will cost them. Using December's numbers, the eight models represent 57% of the Toyota brand sales in the U.S. Each day that Toyota dealers can't move these eight models, they lose about 3500 sales. One Pontiac model is affected by the recall as well -- the Pontiac Vibe -- but GM said it only has six of these models available on dealer lots.
Perhaps most frustrating for consumers who own these affected vehicles -- and for Toyota and their dealers -- is that the remedy hasn't been found yet. When we asked Toyota what fix would be in place, they told us they couldn't answer that because they were still coming up with the solution. The pedal system isn't made by Toyota directly, but by CTS Automotive in their Streetsville, Ontario plant. CTS Automotive also sells pedal systems to Nissan, Honda and Mitsubishi, but those companies have confirmed that their cars use separate pedal systems than the one CTS Automotive sells to Toyota. Some experts are saying the fix could take months or even the entire first quarter.
We spoke with Aaron Bragman, an analyst at IHS Global Insight, to discuss the ramifications of the news.
The company's advice for consumers who own these vehicles is the following:
If you need to stop immediately, the vehicle can be controlled by stepping on the brake pedal with both feet using firm and steady pressure. Do not pump the brake pedal as it will deplete the vacuum utilized for the power brake assist. Shift the transmission gear selector to the Neutral (N) position and use the brakes to make a controlled stop at the side of the road and turn off the engine. If unable to put the vehicle in Neutral, turn the engine OFF. This will not cause loss of steering or braking control, but the power assist to these systems will be lost.
Toyota and Pontiac Models Affected by Recall / Suspension:
Note that the Pontiac Vibe is included as it shares its platform and parts with the Toyota Matrix. No Lexus Division or Scion vehicles are affected by these actions. Also not affected are Toyota Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser and select Camry models, including all Camry hybrids, which will remain for sale.
While dealers struggled with the move, industry experts questioned Toyota's herky-jerky moves.
"From an image perspective, I can't see how it wouldn't have been a better strategy for Toyota to stop sales on effected models immediately," said Chris Paukert, executive editor of Autoblog. "There has been too much public scrutiny surrounding this issue. As it turns out, Toyota was just days away from issuing a stop-sell on these cars and trucks anyway. Even if the pedal issue is one that takes time to develop, it's something that's likely to leave a bad taste in consumers' mouths.
"You never want to give buyers or owners any reason to think that you're putting company balance sheets ahead of customer safety."
A Rough Road
Rex Greenslade, a former PR executive at Ford Motor Company and consultant to large corporations for crisis management, said that Toyota's problems are larger than most recalls.
"Any action that leads to a recall which involves injuries or deaths is on another scale of importance from one that just deals with reliability," Greenslade said. "The repeated images of crushed cars and ambulances and so on can be very disadvantageous to the company.
"The principles of consumer and media relations need to be adhered to. Those are to communicate often, communicate clearly and communicate truthfully. I'm not saying that Toyota has been actively dishonest, but its reaction and speed was symptomatic of a company that believed the problem was not nearly as big."
Greenslade pointed out that the recent wave of Toyota safety issues -- from a rust problem with Tacoma trucks to improper floor mats to this pedal problem -- come during a condensed time period. His time at Ford gave him first-hand experience with product recalls that involved public safety.
"In the mid 1990s, Ford was selling E350s that were modified by outside companies into ambulances," Greenslade said. "These E350s need to be able to go at a moment's notice, in any condition. The modifications that some of these outside companies made caused the ambulances to catch fire. As I recall there were few if any deaths, but the fires were spectacular and on the 11 o'clock news. In the end, Ford had to suspend production.
"Ford could not manage the third party issue. In the end the move to a diesel engine stopped the problems and production was able to continue. Sometimes the best move is to stop, giving up sales and fixing the problem. I think Ford was able to move past it because the company was quick with a response and transparent."
Toyota could take a few pages from Greenslade's playbook. Going forward, should issues arise that directly impact the safety of drivers and their passengers, the company should communicate often, communicate clearly and communicate truthfully.
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