The news is out. Not necessarily a surprise though. Yes, Toyota has been caught intentionally silencing problems. In my book, I refer to the avenue Toyota pursued as the Icebox Silent Problem approach. The book states, “These problems aren’t being resolved. They’re simply being micromanaged inside an icebox where anyone threatening to leak them are frozen out.” Well yesterday, it was confirmed that Toyota had intentionally silenced problems - i.e. an Icebox Silent Problem.
TOKYO (MarketWatch) — A U.S. congressional investigation into Toyota Motor Corp. has turned up documents revealing that the auto maker saved more than $100 million through negotiations with U.S. safety regulators that helped limit an equipment recall in 2007, according to news reports Monday.
The more than $100 million in savings touted by Toyota officials were listed under the title of “Wins for Toyota-Safety Group,” and Toyota officials highlighted them as a key company achievement in 2009, the reports said, citing documents obtained by U.S. congressional investigators.
To Toyota’s dismay, they find themselves with some nefarious company in the icebox. For instance, Peanut Corporation of America, Enron, Worldcom, and Bernie Madoff being just a few.
Toyota is losing ground in their ability to regain their credibility and sales momentum. Almost everyday a new, more damaging revelation is hitting the front page of the news. And my best guess is, Toyota is not going to recover from this anytime soon - if ever. Inside Toyota, fingerpointing, blame and accusations are likely an everyday occurrence. They’re imploding from the outside - in. Moral and productivity is likely dismal. The true cost of Toyota’s silent problem debacle will likely exceed $50 Billion before its over (cost of recalls, lost sales, stock price erosion, lawsuit liability…).
Bottom Line: Don’t be surprised if Toyota is forced to file for bankruptcy before its all said and done. This story is likely to get worse from here.
