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Toyota Motor Corporation and its president, Akio Toyoda · 2009–2014

First; Safety

In February 2010 Toyota's president told Congress the company's priority had traditionally been safety, then quality, then volume. "These priorities became confused," he said.

◷ 2 min read

On August 28, 2009, a Lexus ES350 near San Diego sped out of control at over 100 miles an hour. A dealer had put in an all-weather floor mat that didn’t fit the car, and it had trapped the accelerator at full throttle. Someone in the car called 911: “our accelerator is stuck . . . there’s no brakes.” The crash killed the family of four inside.

Six months later, on February 24, 2010, Toyota’s president, Akio Toyoda, the founder’s grandson, sat before the House Committee on Oversight and Government Reform. In his prepared testimony he offered his condolences to the family and explained what he thought had gone wrong.

“Toyota has, for the past few years, been expanding its business rapidly,” he said in his prepared testimony. “Quite frankly, I fear the pace at which we have grown may have been too quick.” Toyota’s priority, he said, had traditionally been “First; Safety, Second; Quality, and Third; Volume. These priorities became confused.” The company had not been able “to stop, think, and make improvements” as it once did. “We pursued growth over the speed at which we were able to develop our people and our organization.”

He promised changes: management would review recall decisions from the perspective of “customer safety first,” and executives would drive the cars themselves. “My name is on every car,” he said.

Four years later the Justice Department published its own account. On March 19, 2014, Toyota admitted, in a deferred prosecution agreement, that it had misled US consumers by concealing and making deceptive statements about two safety issues, each of which caused a type of unintended acceleration: floor mats that could trap the gas pedal, and pedals that could stick partway down. It agreed to pay $1.2 billion.

The department’s press release summarized the statement of facts Toyota had admitted to, including decisions made while the floor-mat crisis was unfolding. The sticky pedal had surfaced in Europe in 2008, and Toyota had quietly had the pedals changed in new cars built there. In August and September 2009, the problem turned up in US cars, and a US employee rated it priority “A,” the highest level. On October 5, 2009, Toyota sent the pedal maker an “urgent” design change for the US market.

On October 21, according to the Justice Department, engineers and the leadership of Toyota’s recall decision group cancelled it, and suspended the remaining changes, “in order to prevent NHTSA from learning about the sticky pedal problem.” Employees were told to alert the plants by word of mouth. They were also instructed not to put anything about the cancellation in writing.

What this story shows

First Things FirstToyota's priority order was written down, yet by its president's own account it slipped as the company grew. The Justice Department later described an October 2009 decision in which keeping a pedal problem from the regulator came ahead of fixing it in US cars.

Sources

  1. Prepared Testimony of Akio Toyoda, President, Toyota Motor Corporation, Committee on Oversight and Government Reform, February 24, 2010 (Toyota global website)
  2. Akio Toyoda, prepared testimony, February 24, 2010 (House Committee on Oversight and Government Reform)
  3. U.S. Department of Justice, Justice Department Announces Criminal Charge Against Toyota Motor Corporation and Deferred Prosecution Agreement with $1.2 Billion Financial Penalty, March 19, 2014