Massive Toyota recall/halt in production

[southsider2k5]

http://online.wsj.com/article/SB1000142405...Heard_LeadStory

 

Toyota's Total Recall

 

By JAMES SIMMS

 

For a brand that prides itself on quality, this could be a crippling blow.

 

In an unprecedented decision, Toyota Motor, the world leader by sales, Tuesday said it was suspending sales of eight of its most popular models in the U.S. due to potential accelerator problems. The extraordinary step follows a recall last week of 2.3 million vehicles in the U.S. and an earlier recall of 4.2 million vehicles -- both due to similar issues.

 

These are heavy blows for a company aiming to become profitable again and raise factory operating ratios by bolstering sales. In the past two years, Toyota's losses totaled $7.1 billion, and its stated aim is to return to profitability in the year that starts in April.

 

That goal is now in doubt.

 

The company will also halt production of the eight models for a week from Feb. 1 at several North American plants. The models represented 57% of Toyota's 2009 sales in the U.S. -- its No. 2 market by volume.

 

The duration of the sales suspension isn't clear, which indicates the fixes may not be quick. Questions also remain over whether the accelerator problem extends beyond the U.S. Toyota shares dropped over 4% Wednesday in Tokyo.

 

In the U.S., the longer term, and potentially more onerous, problem is the damage that Toyota's woes could cause to its strong reputation for quality and safety. That led to higher resale values and brand loyalty compared with many other Japanese and U.S. makes -- factors that feed into each other to create a virtuous cycle. Once that cycle is broken, restoring it is both time-consuming and expensive.

 

In terms of customer loyalty, Toyota was No. 1 last year in the U.S., according to R. L. Polk & Co. That means lower advertising and marketing costs -- and free word of mouth promotion.

 

The full impact of Tuesday's news may not be felt until owners sell or trade in their Camry or Corolla. Toyota also may have to put aside more reserves if the residual values of cars coming off leases declines. And Honda Motor and Hyundai Motor, which compete with Toyota in making fuel-efficient, quality cars in the U.S., will be more than willing to poach its customers.

 

Much will depend on whether Toyota handles its latest problem well. If it stumbles, the car maker will be known not just for lean manufacturing but also lean profits.

 

Write to James Simms at [email protected]

[Flash Tizzle]

And this all stems from that man and his family who were killed because the car's accelerator was stuck to the ground. If they never dialed 911, and had their last moments of anguish recorded for everyone to hear, it probably wouldn't have led to this.

Edited January 27, 2010 by Flash Tizzle

[SnB]

We've (Hertz) stopped renting toyota vehicles (minus the yaris). That is quite a big deal for us, considering our fleet is 20% toyotas.

[NorthSideSox72]

Amazing how one technical problem can do so much damage to such an iconic company.

 

[Balta1701]

For more fun, Congress is now calling for hearings.

[Balta1701]

Amazing how one technical problem can do so much damage to such an iconic company.

One serious concern I have here is how they responded to the initial reports of a problem. They've been denying for at least 6+ months, maybe longer, before I started paying attention, the fact that this specific type of problem, the one causing this recall, existed. They've been saying they see no anomalous patterns of acceleration, that it was all drivers' fault, and then they started off by issuing a recall relating to what appears to be 1/2 the problem; their floormat design, after months of denials. This sounds an awful lot like a classic "What did management know and when did they know it/tobacco isn't addictive/greenhouse gases don't do anything" discussion.

[FlaSoxxJim]

There was a very informative story on NPR last night about how car manufacturers have been able to drastically cut costs by utilizing the exact same component design across a range of vehicles, as Toyota did in this case with the accelerator. The problem with that, obvious in hindsight, is if that ubiquitous component has a serious design flaw then the recall is not limited to a single model but instead spans across all those products using the same faulty component. The upshot of the story was that automakers are going to have to figure out how to balance short-term cost savings against the potential threat of financial catastrophe associated with huge multi-model recalls down the line.

[iWiN4PreP]

Wow, pretty rough story here. .

[SouthsideDon48]

Wow, I'm so glad I decided to wait with buying a new car and to keep driving my 1993 Toyota Camry with 235,300 miles on it.

 

I was planning on getting another Toyota as my next car, but now with this happening, I might avoid all 2005-2010 models altogether and either get an older used model Toyota or a Honda or Nissan.

 

I'm not really a fan of American-made cards, but too bad Saturn went out of business, I would've considered getting a Saturn.

 

 

 

[kjshoe04]

Wow, I'm so glad I decided to wait with buying a new car and to keep driving my 1993 Toyota Camry with 235,300 miles on it.

 

I was planning on getting another Toyota as my next car, but now with this happening, I might avoid all 2005-2010 models altogether and either get an older used model Toyota or a Honda or Nissan.

 

I'm not really a fan of American-made cards, but too bad Saturn went out of business, I would've considered getting a Saturn.

get a ford. you won't be disappointed.

[SouthsideDon48]

get a ford. you won't be disappointed.

Here's the thing, the one car I hate the most in the world is the Ford Taurus, because I always feel like I'm in a bubble whenever I'm in one.

 

But I wouldn't mind a Ford Malibu, Malibu Maxx, or Cobalt. What's your opinion of those?

 

I was also a BIG fan of the Dodge Magnum, and I'm PISSED they discontinued that model.

[southsider2k5]

Here's the thing, the one car I hate the most in the world is the Ford Taurus, because I always feel like I'm in a bubble whenever I'm in one.

 

But I wouldn't mind a Ford Malibu, Malibu Maxx, or Cobalt. What's your opinion of those?

 

I was also a BIG fan of the Dodge Magnum, and I'm PISSED they discontinued that model.

 

Those are all Chevy's...

[SouthsideDon48]

Those are all Chevy's...

 

ahhhh.... thank you. :

[FlaSoxxJim]

Those are all Chevy's...

 

Ford Malibu. . . by Chevy!!

 

Odd marketing gimmick that.

 

[Sonik22]

My 1992 Toyota 4runner still runs like a champ, I know the next car I get will most likely be a Toyota. This story doesn't worry me.

[kjshoe04]

I've had 3 Ford Taurus' in a row now. They all have been fantastic cars. Hell my one before this lasted until last fall and was an 87.

[Balta1701]

So, this is the one issue that's still going to be out there even after this recall...a lot of people seem fully convinced that this problem also relates to some glitch in Toyota's electronics.

[Texsox]

NEW YORK (CNNMoney.com) -- Department of Transportation Secretary Ray LaHood said Wednesday that owners of Toyotas affected by the recall should bring their cars to a dealer.

 

"My advice is if you have one of these vehicles, if you have a doubt, take it to Toyota today," LaHood told reporters after a hearing on Capitol Hill.

 

 

[southsider2k5]

So has he redacted his statement yet? Between him, Emanuel, and Biden, its like they tried to honor Bush's tradition of public speaking.

[Texsox]

So has he redacted his statement yet? Between him, Emanuel, and Biden, its like they tried to honor Bush's tradition of public speaking.

 

That is the tone down version. His prior comment was do not drive it.

[southsider2k5]

That is the tone down version. His prior comment was do not drive it.

 

Wow. I guess the guys out of the Chicago Machine aren't used to being reported on.

[Balta1701]

Government investigating Brake Problems on the 2010 Prius

[Texsox]

Wow. I guess the guys out of the Chicago Machine aren't used to being reported on.

 

 

is this some local angle I'm not understanding?

 

I heard a report this morning that the CTS facility in Elkhart is worried because CTS ? Canda built many of the systems in question and if CTS is in trouble, it could trickle to them.

[knightni]

is this some local angle I'm not understanding?

 

I heard a report this morning that the CTS facility in Elkhart is worried because CTS ? Canda built many of the systems in question and if CTS is in trouble, it could trickle to them.

Yeah, it sucks for Elkhart. The unemployment in their county is still huge and this isn't helping.

 

CTS said that they made the pedals according to Toyota specifications, so it is an engineering issue with the part.

[southsider2k5]

 

is this some local angle I'm not understanding?

I heard a report this morning that the CTS facility in Elkhart is worried because CTS ? Canda built many of the systems in question and if CTS is in trouble, it could trickle to them.

 

LaHood is a Daley guy.