Faulty Gas Pedals Dent Toyota's Image In US
The problem with faulty gas pedals in Toyota cars and trucks is rare, experts say, and car owners are unlikely to experience any trouble. Toyota's reputation is another matter.
Crisis management experts say just how far Toyota's image tumbles depends on how quickly it can fix the problems and how well it communicates with hundreds of thousands of loyal customers.
They also say that Toyota's growth has outpaced its management structure. The company, now the world's largest automaker, didn't have in place the mechanisms to identify and deal with the problems before they exploded into two giant recalls, factory shutdowns and instructions to dealers to stop selling eight models.
Toyota Motor Corp. rode a reputation for reliability to become the world's top car maker. For more than 30 years, Toyota won customers and market share from General Motors Co., Chrysler Group LLC and Ford Motor Co. by building high-quality cars such as the midsize Camry and compact Corolla.
Americans, particularly baby boomers, frustrated with Detroit's poor quality, fell in love with Toyotas because they rarely broke down. Last year, they bought more than 356,000 Camrys, making it the top-selling car in the U.S. The Corolla was second with almost 297,000 sales.
In short, drivers trusted Toyota. Now that trust is in danger.
Toyota said late Tuesday it would halt sales of some of its top-selling models, including Camry and Corolla, to fix gas pedals that could stick and cause unintended acceleration. Last week, Toyota issued a recall affecting 2.3 million vehicles.
Crisis managers say the issues with the pedals likely surfaced early on at lower levels of the organization, but no one wanted to deliver bad news to the boss.
"The story just kind of drags on. That's just deadly for a reputation," said Brenda Wrigley, chair of the public relations department at Syracuse University's S.I. Newhouse School of Public Communications. "It just spirals into a big situation that's probably going to have long-term financial impact for the company."
In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.
But troubles persisted in other models, eventually leading to last week's recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.
The latest developments follow a recall of 4.2 million-vehicle in late 2009 over concerns that floor mats could bend across gas pedals, causing sudden acceleration.
The problems, Wrigley said, hit Toyota extra hard because it has touted quality for years to gain advantage over competitors.
"Quality was their differentiator and now it's their Achilles heel," she said.
Two car rental companies said Wednesday that they are pulling thousands of Toyotas from their fleets over faulty gas pedals.
The Pontiac Vibe, made by General Motors Co., has also been recalled and will be removed from service by Avis Budget Group Inc. and Enterprise Holdings, which operates the Alamo Rent A Car, Enterprise Rent-A-Car and National Car Rental chains.
Toyota Motor Co. announced Tuesday that it was suspending sales and halting production of eight models following last week's recall to repair sticking gas pedals that could make the cars and trucks accelerate without warning.
Avis said that it is immediately removing about 20,000 Toyotas from its rental fleets in the U.S., Canada and Puerto Rico.
Enterprise, which is privately held, said the affected vehicles represent about 4 percent of its fleet but it is acting out of "an abundance of caution".
The Pontiac Vibe is affected by the recall because it was a joint venture product with Toyota, with the same engineering, products and manufacturing as Toyota vehicles. GM has since discontinued the line and the entire Pontiac lineup.
A Buick-GMC spokesperson said the company is awaiting details from Toyota on the repairs necessary for existing Pontiac Vibe customers.
Shares of Avis rose 16 cents to close at $11.53 Wednesday. Toyota shares fell $7.01, or 8.1 percent, to close at $79.77 and dropped 27 cents in after-hours trading.
In Tokyo, Toyota Motor Corp. said it will recall an additional 1.09 million vehicles in the United States over floor mat problems.
Toyota said Thursday the fresh recall would affect five models _ 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe.
In Erlanger, Kentucky, Toyota said production has begun on redesigned accelerator pedals that fix problems that led to a major recall of its eight car models.
Toyota worked on the design with CTS Corp., which supplied the pedals in the 2.3 million recalled vehicles. Pedals featuring the new design are in full production at CTS, Toyota says.
It was found that the faulty pedals could lead to unintended acceleration in rare instances.
The automaker also says it is working with the supplier to test modifications to existing pedals and plans to roll those out as soon as possible. AP