Tuesday, February 9, 2010


This morning Toyota made the much-anticipated announcement that it will recall another half million vehicles. This recall is far more telling than the last, though. This is a highly publicized recall for an issue that has caused no significant incidents. In other words, this is Toyota's first foray into the territory that GM and Ford have lived in for at least thirty years.

The question of the day is: will Toyota manage to control this incident and win back their overblown reputation? If they don't then we can trace their decline back to this moment. As soon as the CEO of Toyota made a public apology during a voluntary recall the game changed.

It's unclear now, but Toyota is in a precarious position. Both GM and Ford have managed to improve design and quality significantly over the last decade. Recent changes at GM should help to control costs. If the American manufacturers (aside from the seemingly doomed Chrysler) are able to salvage their reputations at a time when Toyota has lost its magic then the trend towards Japanese manufacturers could reverse. That's terrible news for Toyota.

It's also bad for Honda. Honda's fate is tied to Toyotas similarly to how any of the Big Three are tied to the others. Even though automobiles are built globally, with parts sourced from all over the world and final assembly increasing pushed closer to the point of sale*, the most important factor in a homogenized market is the perception of quality. Too often that perception is tied to the manufacturer's country of origin. "Japanese cars are better!" "This is German engineering!" And of course the fading murmur of "Buy American!" If the biggest Japanese manufacturer loses its believers its sure to change perceptions of a few Honda faithful.

The truth is that none of these things matter today. These safety recalls for Toyota should change nothing. Toyotas aren't less safe than they were yesterday, or a year ago. They merely experienced the inevitable when you're mass producing a complex machine that's designed to hurdle rank amateurs down roads filled with other amateurs at high speeds. Something will eventually go wrong; some obscure detail will cause a failure; and people will die.

For the record, I have little sympathy for some of the deaths related to the original recall. Especially for the California highway patrolman who let his Lexus speed out of control before wrecking at 120 MPH. Seriously? A police officer, one of the best trained drivers on our roads, didn't know to shift into neutral? Turn the car off? It's a shame he took his family with him but it's hard to fault Toyota when it's clear that the driver was lacking common sense.

*Translation: Japanese and American manufacturers source parts from the U.S. and overseas, and most cars they sell in the U.S. they assemble here.