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April 20, 2010

Toyota Troubles: Not Over Yet

By Stephanie Porteus

HotRodHoney

It seems that even with a hefty (and record) $16.4 million fine for Toyota, things aren’t turning around just yet.

April 19th marked the end of a two-week period in which the U.S Department of Transportation and Toyota were expected to sign a settlement following the Obama administration’s finding that Toyota knowingly chose not to recall faulty accelerator pedals on many of its popular models. By agreeing to pay this fine, Toyota is “accepting responsibility for hiding this safety defect” from the National Highway Administration “in violation of the law,” says Senior Transportation Department official (who asked not to be named since the settlement had not yet been finalized). Read more…

sniff sniff

Even while Toyota fights to salvage its  tarnished reputation with discounts and competitive pricing, it may not be so easy to win back the U.S market where it once enjoyed years of domination. Toyota still faces a slew of class-action lawsuits for consumer fraud and injuries due to unintended accelerations. Not to mention the safety regulators have not ruled out further action as Toyota is still being investigated.

To make matters worse, Toyota had to shut down its Lexus GX 460 production due to a problem with its electronic control system and may have to recall this vehicle as well, making Toyota recalls seemingly endless.

Toyota shares are down 2% and this decision to pay a fine still doesn’t necessarily protect them or release them from even more liability lawsuits. Some lawyers have estimated that they are liable for more than $10 billion in U.S courts alone. There have also been demands for full refunds on Toyota vehicles as part of consumer protection in 12 states, which would potentially raise the financial stakes even higher.

One thing’s for sure:  it’s looking to be a long (and expensive) road to recovery for Toyota.

Comments

ShaddowEdge
Apr 24, 2010 at 1:34 pm

UpOn2Wheels Its odd sometimes what one country gets and the other doesn’t. I can’t get a Camry Wagon in Australia. In fact the smallest wagon in Australia for Toyota is the RAV4 and I much prefer a proper car based wagons over SUVs. BUT we are still getting new models of the Mazda 6 in Station Wagons while your not.

On to the topic at hand. Me and my family have owned quite a few Toyota vehicles and have never had a single problem with a warranty claim. In fact I find the thing about blaming all comes down to the individual dealer. Hell I’ve been told one thing by one dealer and the next was happy to help even the first told me it was factory issue. Everyone has good and bad. And NO COMPANY out there wants to spend money if they can get the consumer to pay for it.

JoeCool6972
Apr 22, 2010 at 5:34 pm

Toyota deserves everything they are getting now. They have been blaming their customers for their problems for years. Not just recently with the gas pedal sticking either. I used to a be a Toyota technician. We were instructed to try to place blame on the vehicle owner. Such as the big problem they had with the 3.0 v6 having too small oil drainback holes in the heads which caused oil to pool up in the valve train and jell. If every oil change is not documented with a Toyota/Lexus dealer, blame them saying did not use right oil, or didn’t change frequently enough… BS! Karma is a bitch!

I used to be a Ford technician and a GM technician as well, say what you want about them, but AT LEAST THEY ADMIT THEIR FAULTS AND FIX THEM FOR FREE!

UpOn2Wheels
Apr 22, 2010 at 5:13 am

ShadowEdge, bad news – Mazda discontinued the 6 series wagon, but you may be able to find one used. There is a station wagon version of the Camry, called the Venza. If I were wagon shopping right now, the VW Jetta TDI Sportwagon and the new Acura TSX Wagon would be on my shortlist. I’ve got a 2006 TSX, and it’s been flawless. Boring, but dead-on reliable.

ShaddowEdge
Apr 22, 2010 at 4:12 am

UpOn2Wheels and SouthernGuy you both are raising quite valid points. Grammar included. :D . I suppose I bit a bit hard about the whole hatred I see against Toyota as this isn’t the first place I’ve seen which just seems to have strong anti Toyota feelings. I wasn’t meaning to target anyone in particular.
The problem I see is more the witch hunt that seems to be following. Toyota is trying to make their systems better (how hard we will never really know) but the government and probably more so the media is going out of their way to keep prodding the wound, keeping it festering instead of fixing the problem to make sure no one else dies.
Wouldn’t the world be a better place if the government and media instead of just blaming and running someone/company into the ground they spent the same amount of resources fixing the problem? We would sure have better cars, better drivers and more variety as companies would be less likely to go under due to legal fees.

Either way Toyota has screwed the pooch on this one and is paying a big price. I would still buy Toyota if they had something in their range I liked. There doesn’t seem to be a Camry Station wagon anymore which is what I wanted to trade the wife up into. Guess it will be a Mazda 6 Wagon now.

GTwildfire
Apr 21, 2010 at 5:57 pm

Well one thing I think we can all agree upon:
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The fact that there is spirited debate about Toyota’s reputation means Toyota’s reputation has indeed been damaged.

UpOn2Wheels
Apr 21, 2010 at 3:27 pm

SouthernGuy, I don’t mean to be an asshole but I was having a hard time following what your were trying to say. That’s why I suggested better use of grammar, punctuation, and paragraph spacing. It’s not personal, and I’m not a grammar teacher, either.
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Back to the issue at hand, we’re going to have to agree to disagree about Toyota’s fate, but you raise a very valid point about big companies in general. They’re not set up to admit guilt or admit failings. Regulations (such as Sarbanes-Oxley) that were supposed to improve things only made them worse; middle and senior management in big companies spend a disproportionate amount of time trying to shift responsibility onto someone else. No one wants to be the guy with his name on the “smoking gun” corporate memo.
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Toyota may be the first big corporation to get caught with their pants down, but they certainly won’t be the last.

SouthernGuy8503
Apr 21, 2010 at 12:11 pm

UpOn2Wheels – lol i’m sorry that i’m not a grammer teacher, please forgive me haha. and well evey country has plenty of people that can’t drive. you also say Americans need to take responsibility? uh hello Toyota didn’t until the Govt. forced them to, that’s the point. and to clear things up, they’re only taking responsibility because they were FORCED to, if they were responsible then they would have did a recall when they saw it was a problem but they saw it was a problem and did nothing until they were forced to. all Toyota was doing was trying to save $ by not doing a recall but guess what, they were foced to and it cost them even more $ so it bit them in the ass. Toyota just doesn’t deal with things like they should, they dela with them like a teenager, just hopes everything goes away if they don’t actually deal with the problem. i mean really floormats? they actually wanted people to believe the floormats was the problem? but not going to argue with someone that just doesn’t want Toyota to seem as bad as they are only because they drive one but hate to say it, they’re not a prespectful company.
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and i still think it’s funny that you want to attack my paragraph structure, does it really matter? it’s a blog. i mean i understand if it was one long ass run on sentence with all commas instead of periods but i don’t think i have to type a 100 perfect paragraph, i’m sorry that you’re such a tight ass you’re worried about that

UpOn2Wheels
Apr 21, 2010 at 11:49 am

SouthernGuy, my comments weren’t directed at you, so I’m sorry you took it that way. Also, a little punctuation, capitalization and paragraph structure goes a long way towards adding credibility when you’re trying to make a point.

You’re right that Toyota covered up something they shouldn’t have. You’re right that people died because of it. I still don’t think that Toyota is this evil entity that decided it was cool to sacrifice customers in the name of profit (Ford did that with the Pinto, remember? They knew about the fuel tank fire issue but decided that $8 per car was too much to add to manufacturing costs.). Toyota didn’t communicate this because they lacked a clear structure on WHOSE ass would be on the line. It doesn’t make it right, but it clarifies how it could happen. Toyota, like any responsible corporation, has taken steps to ensure it doesn’t happen again. Ever.

I can’t say what I’d do if I lost a loved one in an accident. I can say this: as a former driving instructor and SCCA competitor, I make DAMN sure my loved ones know how to drive. I have zero concern about unintended acceleration in any of the cars I drive, including my Toyota FJ Cruiser. If you want to be outraged about something, be outraged at the fact that Americans are never taught how to drive. Be outraged that people refuse to take responsibility for their own safety, or the safety of their loved ones. Two of the Prius “uninteded acceleration” claims were caused by elderly drivers who confused the gas forr the brake. Where are their relatives, stepping up and saying, “Yeah, I should have pulled mom’s keys, but I’m just grateful no one was seriously injured”?

One point that I was trying to make (and clearly didn’t) is this: liability lawsuits, even those with the best of intentions, ultimately drive up consumer prices. While ass-raping Toyota with fines may be the “just” thing to do, we’ll all pay for it somewhere down the line.

SouthernGuy8503
Apr 21, 2010 at 8:57 am

ShaddowEdge & UpOn2Wheels – my “hatred” for Toyota isn’t because of the recall, it’s because they tried hiding it for so long and waited so long before they put a recall out even though people were getting killed, you’d know that if you read my 1st comment and i know your comments weren’t directed towards me specifically but i know im one of them that ShaddowEdge was talking to so i wanted to clear it up. so UpOn2Wheels, Toyota is in the spotlight about this maybe because as far as i know VW and Audi didn’t try hiding the whole thing, this problem with Toyota started way back when they tried blaming the floormats, remember that? so it’s not that they have a big recall. i know recalls is part of the game since vehicle manufactorers have so many outside venders and manufactorers don’t even make their own stuff anymore, all they do is assemble, but Toyota put all this on themselves by trying to hide it for so long. also UpOn2Wheels i’m not one of the types to always want to sue for everything but you know what, if i had a fmaily member get killed or because the manfactorer didn’t put a recall on something they should have then ya i’d probably sue and im sure you would to if one of your family members got killed because their vehicle had the gas pedal get stuck when they should have put the recall out a long time ago so don’t be a hypocrit. now i know what your saying that some people want to sue over any little thing so i agree with that but this isnt’ a small thing, when the recall was first put out i believe 19 people were killed and even more have been seriously injured. Toyota should have had the balls to do a recall once they saw it was a problem and also not to make up some half ass solution that they knew wasn’t the problem like blaming the damn floormats. this isnt’ the first time they waited until they were forced to do a recall, click the link in my 1st post and you’ll see another time and that time it took years to do a recall. also Toyota did try to hide it all because i saw on the news that Toyota talked people out of doing an investigation, don’t that sound a little weird, i mean honestly? if they knew they did nothing wrong don’t you seriously think they would have let an investigation go on? it would be like the cops putting you as the suspect to a murder and you saying “no you don’t have to do an investigation because it wasn’t me”, if you didn’t do it then you’d have no problem letting them do the investigation.
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so ya after all that said in this post and my 1st post, i lost any repect i had for Toyota, they would rather let people die and countless wrecks happen even after knowing they should do a recall. all they did was pray it stopped but it didn’t. so they fucked themselves over, if they would have just did the RIGHT recall to begin with then it wouldn’t be such a huge deal in the news.

GTwildfire
Apr 21, 2010 at 5:25 am

A lot of good points are being made, and most if not all are valid.
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It’s a complex situation with many sides, and if I have to boil it down to a what’s mostly left is:
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The bigger they are, the harder they fall. Toyota’s reputation for quality was arguably the biggest in the business in terms of marketshare and reputation. Toyota having multiple recalls and there being evidence they tried to sweep defects under the rug is not the same as less reputable automakers with less market share doing the same. That is the flipside of reputation.
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Bad publicity is like a refinery fire. If there’s poor planning, poor damage control and lots of fuel likely to expand a disaster… expect the worst. This is exactly what is happening with Toyota. First of all, they made mistakes in design that started the mess. Secondly they handled the situation poorly. There’s lots of fuel now and nobody’s sure if more things will go up or this will finally get under control… but it’s not looking good.

UpOn2Wheels
Apr 21, 2010 at 4:11 am

Everyone from Ray LaHood (US Secretary of Transportation) to the various assknuckles trying to scam free cars and cash with bogus “unintended acceleration” lawsuits are looking at Toyota as the goose that laid the golden egg. Here’s some things to ponder:

1) Even Toyota’s pockets aren’t bottomless, and at some point it’s no longer cost effective for them to remain in the US market. Liability lawsuits all but killed the small aircraft manufacturers and climbing gear manufacturers. Is a U.S. without Toyota really a better place? What about all the domestic businesses that rely on Toyota? The impact to the economy would be huge.

2) We’ve got this “sue the bastards” mentality about everything, but here’s the cold, hard truth: lawsuits ultimately wind up costing consumers money. Do you think Toyota is in business to lose money? If their products require additional testing, or if their forced to raise prices to cover legal expenses, don’t bitch when the price of a new Camry goes up by 10%.

3) Toyota doesn’t lead NHTSA complaints in unintended acceleration; that honor goes to VW and Audi. Where’s the public outcry about their vehicles? Where are the VW / Audi recalls?

ShaddowEdge
Apr 21, 2010 at 3:31 am

Can’t believe the out and out hate I am seeing for Toyota. Gees EVERY big car maker has had recall-able defects that they have tried their hardest to hide. Why people are making a martar out of toyota is what I find the interesting point, especially when a government is coming down so hard on them.

Oh wait is it cause the American Government (I’m an Australian in case your wondering) is trying to kick start its own economy again? Are they trying to force a company outside of the country out so their car manufacturers can get back on their feet? That’s what is sure looks like from where I sit.

I find it laughable too that you have to kill one car company to keep another alive. People are voting with their feet oh yea. Hello VW.

Other than this problem Toyota’s are still good cars. They still do a dam good job of what they are built for. Sure they are boring as bat shit (I’ve owned a number of them and boy did they not excite me), have the excitement of road kill on a dinner plate but they brought you a standard to manufacturing that many other companies took years to be able replicate (some are still trying).

Its just so easy to pick on something when its down isn’t it!

MidnightLuckey
Apr 20, 2010 at 6:10 pm

Did you hear that? Toyota just jump started the big three.

SouthernGuy8503
Apr 20, 2010 at 5:59 pm

i don’t talk trash about this whole thing because of the recall, i know recalls happen with all of the outside venders, but i talk trash about it because they tried to hide it and were forced to do the recall. i knew from the beginning that they were just trying to hide it because i saw on the news awhile back that showed the people at Toyota actually talked the peoiple out of doing an investigation, now if they didn’t know anything and all don’t you think they wouldn’t have minded an investigation? doesn’t take a rocket scientist to figure that out. i also remember that blog on here about the Toyota truck thing with them waiting years for a recall…. here’s the link to it…. http://blog.cardomain.com/2009/03/13/toyota-truck-recall-fiasco/
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so Toyota just always waited until they were forced to do a recall to do it. so to put it simply.. Toyota brought it on themselves period. they need to look at how they deal with problems and fix it the right way instead of doing nothing hoping it goes away and then to do half ass fixes, leave it up to Toyota to try blaming a damn floormat.
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so to say it again… TOYOTA brought this all on themselves, end of story

GTwildfire
Apr 20, 2010 at 5:38 pm

maybe… it’s not a road to recovery.
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Road to recovery gives the connotation that there’s an uptick. So far Toyota is still dropping into the abyss.

retroman
Apr 20, 2010 at 1:11 pm

That’s gonna leave a mark for sure. I’m no fan of Toyota, never have been, but it really is a shame to see all this go down. The way it looks now, they may get reduced to making riding lawn mowers-Wait!!- Scratch that, most consumers will want a mower that doesn’t accelerate unintentionally. The only thing worse than unintended acceleration is unintended acceleration with BLADES!!!

Chris Bicknell
Apr 20, 2010 at 12:07 pm

It’s unfortunate to see any company have to deal with something like this but it shows just how easy it is for a large number of consumers to have the misconception that they are buying a good product. My hope is not the demise of Toyota, well other than what they deserve, but more a lesson learned for all auto makers and better yet a renewed faith in American auto manufacturers.

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