Toyota's Report Card In: Listen To Customers and Regulators

After recall debacle, independent panel says automaker was initially deaf to complaints

A panel of transportation experts Monday criticized Toyota for being too insular and responding defensively to outside criticism, qualities that eventually led to an embarrassing recall for sudden acceleration complaints.

The automaker had built a reputation on kaizen, a Japanese principle calling for continuous improvement. Criticism from insiders was welcome, the panel said, but the company was often defensive when outsiders pointed out problems. When presented with critiques from customers, independent ratings groups, or regulators, the company "responds less constructively, often with defensiveness," the report says.

The company needs to let its North American operations have more control over quality and safety issues, and to improve its management structure around safety issues.

Toyota came under fire in October 2009 and early 2010 for a spate of sudden acceleration recalls. Two major problems surfaced: Floor mats were getting stuck under the accelerator pedal, causing cars to speed out of control. And moisture got trapped in some pedals, causing them to stick when drivers took their foot off the gas.

Ultimately, Toyota recalled 9.3 million vehicles in the U.S., and damaged its reputation. Lawyers uncovered an email showing Toyota boasting about saving $100 million by negotiating with the National Highway Traffic Safety Administration to not include some cars in the initial floor-mat recall.

There were worries that bugs in Toyota's electronics systems were causing many crashes. In February, the government released a report saying electronic problems were not the cause of Toyota's sudden acceleration woes -- clearing the automaker of those claims. While many news reports and pundits say this means Toyota was cleared of all sudden acceleration charges, that's not correct: The automaker was responsible for the floormat and sticky accelerator pedal problems that first cropped up.

An independent panel of experts -- including Rodney Slater, the former U.S. Secretary of Transportation, safety experts, government officials and business executives – was convened to investigate Toyota's quality issues.

Toyota has already remedied one problem – it named a chief safety technology officer last year to help solve the management issues raised by the panel. Toyota CEO and President Akio Toyoda, a member of the company's founding family, took over as operating head of the company in 2010, and has vowed to reform the company.

"It has been said that a good company takes a problem and solves it, but a great company takes a problem and learns from it," Slater said. "Toyota appears to be committed to applying what it has learned to make important changes to improve its quality and safety processes, but there is more to be done."

Share This Photo X