Rodney Johnson - Without Warning

Toyota’s recall is now underway and factories will restart next week. The worst of Toyota’s problems are behind them - or are they? Yes, there are plenty of analysts, bloggers and news reports out there suggesting that Toyota will quickly rebound from this mess, and resume their stature as the #1 automotive company in the world. The brand will survive untouched. However, I’m thinking their image, quality and reputation problem may just now be underway.

Why do I say this?

It’s really quite simple. First, Toyota is acting like they’re is a bigger problem yet to surface. For instance, President Akio Toyoda’s only public comment over the past month consisted of an impromptu, 75 second interview while in Davos at the World Economic Forum. It was a brief apology, and nothing else. President Lentz of Toyota’s U.S. operations has been more forthcoming, stating that Toyota knows what the problem is, and they have the fix. So one could surmise, the problem is over - right?

Wrong. News is news, and a second story is beginning to emerge, and it could be more damaging than the first. Some are beginning to question whether Toyota has truly identified the problem? Bloomberg just published an interesting article stating the problem may still be out there, U.S. Said to Probe Toyota’s Electronics in Recalls. 

U.S. safety officials are investigating whether electronic throttle systems may have caused sudden acceleration in Toyota Motor Corp. vehicles, as alleged in at least seven lawsuits.

The government is also considering civil penalties against Toyota, the world’s largest automaker, for its handling of recalls affecting millions of its cars and trucks, according to an official of the Transportation Department, who asked not to be identified because a review of the automaker’s actions isn’t complete.

The National Highway Traffic Safety Administration is trying to determine if electromagnetic interference may be causing the throttle system to malfunction, said the official of the Transportation Department, which oversees NHTSA.

At least 15 lawsuits seeking class action status have been filed against Toyota on the acceleration issue, and seven of them claim an electronic throttle system called ETCS-i is at fault instead of the pedals.

In cars with the ETCS-i system, the engine’s throttle is controlled by electronic signals, which are sent from a sensor that detects how far the gas pedal is depressed. The signals are transmitted to a computer module that controls how much the throttle opens.

Lawyers claiming an electronic defect contend that floor mats or stuck pedals don’t explain the sudden-acceleration incidents that triggered their lawsuits.

This is the story that is already beginning to gain traction, here, here and here. It could get really ugly. According to the reports, Toyota has had an icebox silent problem for years (a problem that is being intentionally silenced). And now that it is beginning to surface, Toyota is likely to realize monumental declines in market share, reputation and most importantly, many loyal customers. This is exactly what I discuss in my book Without Warning, and is why everyone needs to read it before it is too late.