Toyota Crisis Likely to Trigger Change Across the Auto Industry

Don't be surprised to see yet another recall or two from Toyota in the coming weeks. Among other things, the embattled automaker may reveal a fix for unexpected stalling involving hundreds of thousands of recent Corolla and Matrix models.

That will be another setback for a company that is desperately struggling to push past its recent safety problems and get back to focusing on the business of selling cars and trucks. The maker has taken a more aggressive stance in recent weeks, underscored by efforts to discredit skeptics who insist there are unknown electronic gremlins with Toyota products, as well as an assault on a motorist who now looks likely to have staged a well-publicized incident involving a "runaway Prius." But each step forward seems accompanied by two in reverse.

A number of key competitors have been hoping to take advantage of Toyota's uncharacteristic stumbles, including General Motors and Hyundai, targeting Toyota owners with incentives and less than veiled marketing pitches that raise the specter of unsafe Toyota products. But the competitive efforts have, on the whole, been surprisingly subdued – and for good reason. Every automaker knows it could be next under the microscope. And, worse, Toyota's near-term problems are likely to become a matter of concern for the auto industry as a whole, going forward.


Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials will bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.


Consider the spate of recalls being announced by other manufacturers, notably Honda, which has, among other things, just recalled 344,000 Odyssey minivans and Element crossovers to fix brakes that could fail over time. That's on top of a "service campaign" also involving Odyssey, but this time to repair power liftgates. And just a month ago, Honda added another 437,000 vehicles to a steadily expanding list of products equipped with airbags that can rupture when deploying, potentially injuring or killing those the devices were designed to protect.

The industry may be using Toyota's crisis as cover to air their own problems.
Pick a maker and there's a chance it has issued some sort of repair notice in recent weeks, whether a full-fledged recall or something technically more minor but still meant to deal with a safety defect. For one thing, says analyst George Peterson, of AutoPacific, Inc., the industry may be using the Toyota crisis as a bit of cover to air their own problems.

There's also the likelihood that as things settle down, when the public, as well as both Congress and the National Highway Traffic Safety Administration, get to take a more reasoned look at what happened and why, some big changes could be in store.

Prior to last month's Capitol Hill hearings on Toyota, documents were leaked to the media suggesting that Toyota officials celebrated blustering NHTSA into downgrading an early recall for "sudden acceleration" problems – saving $100s of millions, the maker estimated, in the process. (Ironically, Toyota now expects the issue to cost it $2 billion, with an analyst for JP Morgan raising that to nearly $6 billion.)

"There's always been a bit of give-and-take between the industry and regulators," said a government source, stressing that always going head-to-head is an ineffective way to handle safety issues and can delay or even stall a potential recall. But, he also admitted, the anti-regulatory sentiments that have dominated Washington the last decade often left safety overseers in a weak position and ready to retreat when they should have stood their ground.

Don't be surprised to see things do a 180.
Add the fact that the government really didn't have the resources necessary to monitor all of the potential problems with today's increasingly complex cars – really no resources at all to explore reports of unexplained electronic issues.

Don't be surprised to see things do a 180. Even Republicans are sensing the public mood and showing support for a beefed-up NHTSA. That will likely mean more investigators, less compromise and quite probably some new rules.

In recent years, the industry has been pushing to speed up product development times, something a few critics contend led Toyota to let down its safety guard. These days, a new vehicle might undergo thousands of digital crashes but only a very few in the sheet metal, and then only because NHTSA still demands real world validation. One concern is that the virtual reality testing that has been supplementing, and in some cases supplanting, traditional, real-world research could be pared back. That may or may not make tomorrow's products safer, but it would certainly slow down development efforts and raise costs.

From a showroom viewpoint, that could mean fewer new models each year, and somewhere, somehow, manufacturers will have to find a way to pass on the added costs to buyers. Will it also mean safer vehicles? Maybe, but in the wake of the Toyota safety scare, that's something consumers, regulators and even some anti-Big Government advocates all seem willing to err in favor of.


Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials will bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.

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