Professionalism/The Toyota Recalls of 2009-2010

Toyota is a publicly traded company on the Tokyo Stock Exchange (TSE) and is currently valued to have a market capital of $190 billion. The Toyota Corporation was founded in Japan in 1937 by  Kiichiro Toyoda. In 1972, Toyota began manufacturing operations in the United States and started full-scale vehicle production by 1986. They have become the world's largest automaker in both production and sales, producing over 8.5 million vehicles in 2010. However, from October of 2009 to February of 2010, over 9 million Toyota vehicles were recalled for "unintended acceleration problems". As of January 2010, the National Highway Traffic Safety Administration (NHTSA) had 21 deaths allegedly due to unintended acceleration problem since 2000, but following the January 28 recall, additional complaints brought the alleged total to 37. In total, the recall would wind up costing Toyota upwards of $2 billion. However, the NHTSA would disclose the results of their investigation: though floormats and "sticky" break pedals were what prompted the recalls, this translated to "only 16 percent of the unintended acceleration reports" thus "in the majority of cases, user error was the most likely explanation."

=Reputation= Over the years, Toyota automaker has earned its renowned reputation as "the world's best automaker" by making safe and reliable transportation for billions of consumers. But this favoritism has dropped since 2009 as Toyota recalled 2.3 million vehicles spread across eight of its models due to unintended acceleration. Erich Merkle, president of Autoconomy.com believes, "People don't buy [Toyotas] for their good looks... [or] their cash-back or financing offers. They buy them because they have a lot of confidence in the quality and safety of the vehicle."

Toyota has won numerous awards from J.D. Power and Associates to back up these claims. Toyota placed first among all corporations and earned 10 segment awards in 2007 in the J.D. Power and Associates Vehicle Dependability Study. For the 13th-consecutive year, the Lexus LS Luxury Sedan was the top performing model for the industry. The Vehicle Dependability Survey is one of many studies that indicates Toyota and Lexus quality continues to improve.

Public opinion of Toyota’s cars are strongly positive, but the company has dealt with issues that predate the 2009 recalls. In September 1986, Toyota was ordered by the National Highway Traffic Safety Administration (NHTSA) to recall vehicles for speed control problems. Toyota also settled an unintended acceleration incident internally and did not report the incident to the NHTSA until 5 years later.

=Timeline of Recalls=


 * Sept 26, 2007 – US: 55,000 Camry and Lexus models recalled for unsecured floor mats that could cause gas pedal entrapment.
 * Nov 2, 2009 – US: 3.8 Million Toyota and Lexus vehicles recalled for floor mats
 * Nov 25, 2009 – US: 4 Million vehicles recalled to reconfigure gas pedals
 * Jan 21, 2010 – US: 2.3 Million vehicles recalled due to gas pedal sticking
 * Jan 27, 2010 – US: 1.1 Million more vehicles added to recall list for sticking accelerator pedal
 * Jan 30, 2010 – Europe, China: 1.8 Million cars with a sticking accelerator problem
 * Apr 28, 2010 – US: 50,000 MY 2003 Toyota Sequoia recalled to reprogram the stability control system.


 * Aug 28, 2010 – US & Canada: approximately 1.13 million Corolla and Corolla Matrix vehicles produced between 2005 and 2008 for Engine Control Modules (ECM) that may have been improperly manufactured.
 * Feb 8, 2011 – US: National Aeronautics and Space Administration (NASA) and National Highway Traffic Safety Administration (NHTSA) inquiry reveals that there were no electronic faults in Toyota cars that would have caused acceleration issues. However, accelerator pedal entrapments remain problematic.
 * Feb 22, 2011 – Toyota recalls an additional 2.17 million vehicles for gas pedals that become trapped on floor hardware.

=A Twofold Problem Lead to Recall=

Sticking Accelerator
Despite Toyota's reputation for quality and long-lasting vehicles, the company faced challenges of a sticking accelerator pedal in many 2009-2010 models. A friction problem occurred when drivers pressed the accelerator pedal under certain operating temperatures and humidity conditions. An increased friction in the accelerator pedal mechanisms caused the pedal to become "harder to depress, slower to return, or, in the worst case, mechanically stuck in a partially depressed position", shown in this pedal diagram. The sticking accelerator forced Toyota to recall over 5.4 million vehicles worldwide with 2.43 million in the U.S alone. The accelerator recall cost Toyota over $2 million in losses and lawsuits. In addition to its financial costs, the foreign manufacturer risked losing its strong American trust in quality and safety.

Floormats
Some Toyota dealers sold unapproved floor mats that were too thick to lay properly under the accelerator pedal without rubbing against it. The depressed accelerator pedal caught underneath thick floormats, unapproved by NHTSA standards, and did not allow the pedal to return to its natural position. Thus, the partially depressed pedal rendered an unintended acceleration, causing multiple vehicle accidents and crashes.

User Error
While there were some technological issues that some Toyota models had, it didn't explain the majority of issues. Consumer Report published an article stating that for every 100,000 vehicles recalled, only 1 was defective. Car and Driver published a piece stating that the risk of fatality in a recalled Toyota vehicle was 1 in 200,000 compared to the odds of a fatality in the average American vehicle of 1 in 8,000. In the same analysis, Car and Driver concluded that a recalled Toyota was "highly unlikely have vehicle defects" and that "increased danger is only encountered by those who "aren't smart or calm enough to shift to neutral" . Thus, many concluded, including Congress, that since "sticking pedals or floor mats as the cause of only 16 percent of the unintended acceleration reports that in the majority of cases, user error was the most likely explanation."

While Toyota was quick to adapt the keyless technology of push-start engines to its newer models, they failed to give adequate user instructions of how to stop the engine in case of an emergency. The push-start button should be held down for three seconds, while the engine is in neutral during an emergency to shut off. However, the company neither placed any warnings on its vehicle dashboards nor included guidance in its vehicle manual, even though many users never review it. After the NHTSA released its investigations, the lack of driver instructions forced Toyota to further expand its recalls.

Even though Toyota could have improved driver safety with more intuitive emergency operations, drivers do make mistakes. Two highly publicized cases reveal panicked drivers unintentionally pressed the accelerator pedal, instead of the brake, causing an accident because "investigators found either strong indications that the driver's account of the event is inconsistent with the findings of the analysis".

Richard Schmidt, the founder of the Journal of Motor Behavior and former Professor at UCLA, was one of the world's leading experts on the way your feet behave when you drive. In the 1980s he helped investigate unintended acceleration in the Audi 5000. . . Schmidt argued that user error was the cause of unintended acceleration in both the Audi case of 1980 and the Toyota case in 2009. He wrote in a New York Times OP-ED: "One thought is that computerized engine management systems or electronic controls may be to blame. And so it is interesting to note that unintended acceleration in the 1980s happened before the arrival of drive-by-wire controls and computerized engine-management systems." Schmidt coined the term "Impulse Variability," where your brain requests a very specific action, but your body fails to deliver exactly what it's told to do. He argued that unintended acceleration was due to user error and was especially a problem with older drivers, drivers who had little experience with the specific car involved, and people of relatively short stature. In the high profile Saylor accident, the car was a loaner.

Media Portrayal
Car and Driver stated that several incidents in recalled Toyota models may have been a product of the media's portrayal. The Project for Excellence in Journalism aggregates news stories across media platforms and in the last week of January 2010, Toyota recalls were the 5th biggest US story resulting in 4% of all news coverage dedicated to the vehicles. The following week, the first week of February 2010 it became the 2nd biggest US story, 11% of all news coverage. Two weeks later, the United States Congressional Committee called upon Toyota executives to provide statements, for a hearing to discern whether or not American manufacturers needed to implement policies to curb unintended acceleration. Ray LaHood, Secretary of Transportation at the time, said:"My advice is, if anybody owns one of these vehicles, stop driving it, take it to the Toyota dealer because they believe they have the fix for it." .

The NHTSA received 9,700 "unintended acceleration" cases from January of 2000 through December of 2010. Of those, Toyota accounted for 3,100 cases, well beyond their market share. However, 2,200 (71%) incidents occurred after the first wave of recalls in October of 2009. The NHTSA later concluded that the media's coverage of the Toyota recalls "was the major contributor to the timing and volume of complaints" and ultimately that "unintended acceleration was a low-probability event".

ABC News did an investigative report to demonstrate proof of unintended acceleration. Reporter Brian Ross joined college professor Dave Gilbert of Southern Illinois University-Carbondale who recreated the conditions of unintended acceleration. However, when carefully assessing the video, viewers can see that the dashboard lights indicate that the car doors are open and the parking brake is on when the care is supposedly accelerating. . Furthermore, Gilbert was paid by a trial lawyer group with pending litigation against Toyota. . ABC claimed that this mistake was an editing error and the original footage was too shaky to use. In contrast, Stanford's Center of Automotive Research stated that ABC News' demo was "unrealistic and misleading." Additionally, a study by Exponent Inc. found that short circuit Gilbert used to simulate unintended simulation "would be highly unlikely to occur naturally" and could "only be contrived in the laboratory."

= Lawsuits =

Van Alfen vs Toyota Motors Sales
In 2010, nearly a year after recalls began, Paul Van Alfen crashed his 2008 Toyota Camry into a stone wall. Van Alfen and daughter-in-law, Charlene Jones Lloyd, died. His wife and son survived. The Van Alfen and Lloyd families sued Toyota, marking the first of many lawsuits regarding unintended acceleration.

In Van Alfen vs Toyota Motors Sales, the plaintiff blamed Toyota’s faulty electronic system. While police observed skid marks at the scene, Toyota’s defense statement claimed that: “Any injuries caused by the crash were caused in whole or in part by Paul Van Alfen’s action” since the car’s black box recorder indicated that the brakes were never pressed.

Toyota settled the case out of court and continued to blame floor mats and driver error in future sudden acceleration lawsuits. =Involved Individuals with Ethical Dilemmas=

Akio Toyoda and Toyota's Changing Business Strategy
Toyota's CEO, Akio Toyoda, was responsible for the company's shift from prioritizing safety to prioritizing profits. Toyoda claimed safety suffered due to rapid growth and insufficient time to train employees to maintain historic standards of quality and excellence. Professor Ed Hess at the University of Virginia agrees, saying, "[Fast growth] can create serious business risks that if not properly managed can dilute a company's brand and destroy its value."

Toyota's strategy change contributed to the company hiding knowledge of floor mat pedal entrapment issues in order to maintain sales. Legally an automaker cannot withhold defect information from the public for more than five days after discovery of a flaw is made. Toyota's negligence resulted in a fine of $16.4 million from the NHTSA, the highest ever levied by the department.

An analysis of Toyota recalls bears similarity to the case of the 2003 Columbia space shuttle disaster. At the time, NASA had a similar change in business structure; their historic mantra of "If it's not safe, say so", while still in effect, became overshadowed by a new motto of "Faster, Better, Cheaper." The change resulted in NASA prioritizing its budget rather than the safety of its astronauts. NASA's internal structure helped create the hostile environment that kept Rodney Rocha, an employee who knew of a potential flaw, from alerting the people who could have averted the disaster. Both cases show the catastrophic outcomes that can result when safety is not a company's first priority.

Yoshimi Inaba
Yoshimi Inaba, president of the North American Toyota division, received a memo describing a negotiated recall that saved Toyota $100 million as a “win” for the company. The savings resulted in an increased risk for consumers whose cars were not included in the recall. The decision outlined in the memo resembled the 1977 Ford Pinto debacle, where Ford took a money-saving risk that ultimately killed many people.

The decisions of both companies were criticized by the public. Most critics agree that a human life is invaluable. Accordingly, a company should not place profit above customer safety. However, Professor Kip Viscuchi of Harvard College and Professor Ted Gayer of Georgetown University disagree, arguing the average value of a statistical life is $6 million.

Using the average statistical value for a human life, the $100 million saved by Toyota is equal to over 16 lives saved. Toyota was faced with the dilemma to spend the money and possibly save lives, or save it and risk people dying. The ethical decision becomes more complicated when the ultimate use of the saved $100 million comes into consideration. If the money used to develop advanced air bags is ultimately saving thousands of human lives, is it ethical for Toyota to knowingly take actions that would lead to the death of a few individuals? If Toyota knew for sure that only one person would die from their $100 million savings, would it be ethical for them to knowingly commit that person to death just to save $100 million?

Background
Betsy Benjaminson was a translator for an agency hired by the firm representing Toyota against sudden acceleration lawsuits. Fluent in Japanese, Benjaminson was given access to thousands of Toyota’s classified documents. She recalled, “little by little, I started to see a pattern…I found that there was a completely different story being told to the public from what the engineers and PR guys were saying internally.”

Benjaminson began leaking documents anonymously saying: “I can do something meaningful in helping prevent this horrible kind of tragedy, or I can turn away, and keep making my paycheck, and just be a little screw in a huge machine. So I made a choice that I can make a difference, I can make my life meaningful.” The Huffington Post published the first story.

Fired by her firm, Benjaminson landed another client. She also sent documents through Iowa Senator Chuck Grassley’s whistle-blower program. However, Benjaminson realized making a greater impact required releasing her name recalling: “When I went to Congress, I got a big lesson in how D.C. works…An anonymous source is never as credible, can never bring the same moral outrage.” Fired again, she reached out to Toyota victims and their lawyers, and collaborated with automotive experts skeptical of Toyota’s claims.

Benjaminson’s Impact
Hundreds of people consequently sought legal action against Toyota for injuries and deaths due to unintended sudden acceleration. In 2012, Toyota paid over $1 billion to settle a class action lawsuit over economic losses for Toyota owners. In 2013, the federal judge presiding over many of the remaining lawsuits announced that Toyota was moved to an “intensive settlement process."

Despite the personal and professional sacrifices, Benjaminson believes: “I am at peace with what I’ve done because one day I will be gone. I hope that I will have instilled the values of truth and kindness in my children’s hearts. Those are more important than money.”

=Ethical Lessons=

Responsiveness
The biggest pitfall in Toyota's recall was its untimely response to manufacturing defects. They underestimated the seriousness of the problem and lag in their response, putting customer's lives at risk. Although the company claimed to have prioritized solving the issue, Toyota management failed to give an immediate explanation. They offered no public announcement or apologies until January 21, 2010, two weeks after their last recall. A short-term solution recommending floor mats be zip-tied to a hook or removed altogether, failed to recognize the company's internal issues. A better internal risk management system could have helped Toyota identify where product weaknesses could occur. They neglected to identify the source of the problem immediately, despite claims of a "new standard of responsiveness." Toyota's delayed reaction in recalling defective vehicles resulted in liability and a fine of $16.4 million.

Responsibility
Toyota attempted to hide their use of unapproved floor mat thickness for over four months. Avoiding seemingly small problems led to subsequently larger problems. Evidence emerged that Toyota management "bragged about saving the company $100 million because they negotiated a reduced floor mat recall." The company should have been more responsible to its customers and its brand by correcting issues swiftly despite potential heavy losses in revenue. Toyota was clearly at fault for not immediately accepting responsibility for the sticking accelerator problem.

Ownership
Despite Toyota's regrettable decision, the company took ownership of their failures. After recognizing their technical issues, Mike Michels, a Toyota spokesman, stated during a New York Times interview, "I don’t want to get into any kind of a disagreement with CTS. Our position on suppliers has always been that Toyota is responsible for their cars” . The company acknowledged its failure to resolve braking issues quickly and efficiently.

After negative publicity, Toyota proved that its anti-braking software and electronic throttle controls were safe. U.S. regulators and independent testing from Exponent reported electronic flaws in its throttle system were not responsible for reports of unintended acceleration. This independent analysis validated Toyota's safety reputation, helping customers regain brand trust.

Personal
Companies routinely ask employees to sign contracts dictating conduct and information-sharing. However, individuals should not be pressured to subvert their own moral codes and sense of right and wrong in order to comply with the contract. Rather, they must take ownership of their actions and the impact they have on personal happiness.

= References =