Toyota Troubles

Besides the record-breaking snowfall that the Northeast suffered over the past few months the only other thing that seemed to consistently make the news were the recalls being led by Toyota. For those who have been living under a rock for the past few months, the problem is that numerous vehicles in Toyota's stable of automobiles have been suffering problems with their braking systems and their on-board computers which has led to unexpected acceleration or difficulties in braking. What started out as a limited number of recalls has slowly over time blossomed into something much more prevalant and far-reaching and now it's come to the point where Toyota President Akio Toyoda (grandson of the founder of Toyota) is coming to testify before Congress.

When I was studying for my MBA, we often used Toyota as an example of a company that was doing a good job in globalizing but also in improving relations between nations that they entered into partnerships with. For example, one of Toyota's business models is to reduce costs by moving manufacturing to plants in the country where the vehicles will eventually be sold. As a result, although Toyota is a Japanese company, there are many plants in the United States, Canada and Mexico that build the cars that are eventually sold here. Not only that, but the company contributes large quantities of money to local economies to help not only their workers but the communities in which they live as well. There was once a great deal of stigma associated with buying Japanese cars versus American but now, even Japanese cars can be considered American in many respects.

Be that as it may, Toyota has taken some efforts to try and halt the problems plaguing their line of vehicles and although the efforts are ongoing, they are still ot enough in the eyes of many lawmakers. Many in the US government feel that Toyota should be held accountable and to hear some of the leaders on the Hill speak gives the impression that they are looking to end Toyota's sales records in this country. Now perhaps it's a bit of cynicism and while I agree that Toyota needs to make changes to ensure that their products remain safe for a consumer group that obviously buys their vehicles in such large quantities, but isn't it a little hard not to think about the fact that the Federal Government now owns stakes in GM and Chrysler now?

Sure the lawmakers will want Toyota to suffer if it will mean more consumers will go to purchase cars by GM and Chrysler again. I think what they should remember though is that what drove many buyers to Japanese vehicles in the first place was the fact that not only were prices affordable for their vehicles but that they provided good value for the dollar. Sure the occasional GM truck from the last two decades will still be on the road going strong but I don't think those numbers can compare to the fact that nearly 80% of the Toyotas sold in the last 20 years are still on the road and going strong. That's a solid statistic in anyone's book. When you talk about returns on investment, I don't think you can get much better than that.

Toyota has been making efforts to show to the American government, public and the rest of the world for that matter that they are making efforts to improve the situation. Quality control seems to be a major problem and independent analysis of their product lines. In both cases there seems to be a lack of true objectivity and I believe that that has led to some of the problems. If Toyota makes sincere efforts to change these problems and the perceptions that people have of these issues, then I think they will see people returning to buy their products. Fast action and honest dialogue will go a long way, otherwise in an economy that is still reeling, consumer confidence will continue to go down and workers who build Toyotas in this country will also see yet another auto manufacturing company go by the wayside. I honestly don't think our economy can handle another big one like that.