As we fumble towards a more complete understanding of Toyota’s stunning fall from grace, we’ve only uncovered a single class of people who truly stand to benefit from the last several weeks of hysteria: the lawyers, of course. Thanks to Toyota’s deep reserves of cash, every single possible damage incurred in the last several weeks will be picked over for an opportunity to sue the world’s largest automaker, and already the suits have crossed over into the realm of the absurd. Automotive News [sub] reports on latest class-action suit charge against Toyota, which seeks damages from the automaker for diminished resale value and lost use of recalled vehicles. These charges have been filed as class-action suits in “at least 30 states,” and lawyers suggest that the damages could run as high as $2b. Ford paid Explorer owners $500 a piece when it settled similar class-action suits in the wake of its Firestone safety scandal.

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Click to enrage … we mean, enlarge

According to the MSM and many on-line pundits, the NHTSA has been drowning in customer complaints about Toyotas for years. Supposedly, the warnings were thrown in the wind.

Edmunds went through the pain of sifting through NHTSA’s complaint database from 2001 through Feb. 3, 2010 . After the counting was done, Edmunds came to a startling conclusion: The deluge of complaints is a myth, to put it charitably. “Fabrication” would be a better word. Amongst 20 brands, “Toyota ranks 17th among automakers in the overall number of complaints per vehicle sold,” says Edmunds. NHTSA’s own data shows: Only drivers of Mercedes Benz, Porsches and Smarts have less to kvetch than Toyota owners. (Read More…)

Every year, Japan’s Ministry of Economy, Trade and Industry hands out prizes for products it regards as the pinnacle of energy-efficiency and eco-friendliness. This year, Toyota’s Prius was chosen as the recipient of the grand prize.

Last Monday, Toyota said “enryo shimasu” (no thanks) to the Ministry, and refused to accept the governmental honors, an industry ministry official disclosed today to the Nikkei [sub]. (Read More…)

Toyota’s PR efforts have been competent if muted during the ongoing recall scandal. Though it could certainly have done more in the past weeks (specifically by making top leadership more available to the public) Toyota has carefully avoided overreacting to the mushrooming media frenzy. Until now. The NYT’s Wheels Blog reports that the 173 Toyota dealers who make up Toyota Southeast have pulled regional ads from ABC stations because of “excessive stories on the Toyota issues.” Toyota Southeast’s ad agency 22Squared says “We have counseled the client on the pros and cons of this, and ultimately it was their decision to make.” Toyota continues to run corporate ads on ABC, but the petulant backlash from its Southeast dealers can’t help but reflect poorly on the brand. Any PR pro will tell you (and presumably 22Squared  counseled its clients of this), that these kinds of strong-arm tactics do nothing to improve public perceptions of a brand. Toyota dealers might feel that the parent company is not doing enough on the PR front, but this approach will only create the need for more PR in the future.

Honda said it will recall another roughly 378,000 vehicles in the U.S. to fix potentially faulty airbag systems that are linked to at least one known fatality and 11 injuries in the U.S., says the Nikkei [sub].

That brings the number of airbag-related recalled Honda and Acura models to more than 826,000. Honda said some airbags in its older vehicles deploy with too much pressure, and send metal fragments flying into the car. (Read More…)

The gentlemen at Reuters asked me to pen an op-ed on the Toyota situation (as of last weekend) for them, so I did. My conclusion, in a sentence:

If there’s a lesson to Toyota’s tumble, it’s that easy assumptions aren’t enough to keep you safe on the road, or in the showroom.

Read the whole thing here.

Perhaps the biggest surprise of Jim Lentz’s appearance on Digg Dialogue was the number of questions that were unrelated to Toyota’s ongoing recalls and quality issues. But even if crowdsourcing had yielded a number of truly tough questions, Lentz had access to them ahead of the interview, giving him time to craft slippery answers. Still, the session provides an interesting of a preview of Toyota’s defense ahead of tomorrow’s congressional hearing. The main thrust: unintended acceleration is mysterious phenomenon, and finding a common cause for multiple incidents could be nearly impossible. Unless investigators find a ghost in Toyota’s electronics code, that may be as good of an answer as we’re ever going to get.

Toyota heads up to Capital Hill tomorrow to face the ire of the U.S. House Committee on Oversight and Government Reform in a hearing that’s been subtly named “Toyota Gas Pedals: Is the Public at Risk?” A memo by committee staff [via the WSJ] sets a paranoid tone for the hearing, as the NHTSA investigation widens beyond gas pedals alone:

Attention is now being focused on the electronic throttle control system (ETC) to determine whether sudden acceleration may be attributable to a software design problem or perhaps to electromagnetic interference. The committee staff found numerous complaints made to NHTSA describing sudden acceleration that was not caused by either floor mats or sticky pedals.

Toyota’s Yoshi Inaba will face the brunt of the questioning, although Transportation Secretary Ray LaHood and NHTSA administrator David Strickland will surely face questions about their oversight of Toyota (or lack thereof).

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State Farm, the US’ largest automotive insurance company, began warning federal regulators in 2007 about unintended acceleration in Toyotas, the
Washington Post reports. Yet the National Highway Traffic Safety did not begin to act for more than a year after State Farm’s initial alerts. This
revelation follows by more than a decade the insurer’s warnings about Ford Explorer rollovers, which the Post reports led to a congressional
investigation, and legislation that “created an “early warning” system for auto safety.” But NHTSA apparently hasn’t been paying attention to the information it has collected. Randy Whitfield, a Maryland consultant, using data from NHTSA, two years ago determined that the 2007 Toyota Camry and Lexus ES 350 had excess injuries due to unexpected acceleration. State Farm insures more than 40 million customers.

The Japanese government is getting increasingly worried that the Toyota debacle might turn into a worldwide backlash against Japanese cars, or even all Japanese products. As the world’s 4^th largest export nation, Japan has a lot to worry about.

Today, large parts of the Japanese cabinet came down hard on Toyota, says the Nikkei [sub]. (Read More…)

The legal angle to the Toyota recall story has been a source of constant amusement, from an early attempt to prevent Toyota from enacting its gas pedal fix, to news today [via Reuters] that at least 30 class-action suits have been filed since the recall began. “This is going to a little cottage industry all of its own,” says Matt Cairns of DRI, the Voice of the Defense Bar, the largest U.S. civil defense attorney association.
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It’s the software, stupid. At a press conference at 3:30 pm Japanese time, Toyota came clean and announced that it will recall 223,068 hybrid vehicles in Japan, including its latest Prius model and three other models–the Sai, the Lexus HS250h and the Prius Plug-In Hybrid, says the Nikkei [sub]. They will get a re-flash of the brake software.  Worldwide recalls of affected models will follow. This ends – for now – weeks of waffling over the latest in a series of Toyota problems.

The recall will start Wednesday. A total of 199,666 Prius vehicles manufactured between April 20, 2009 and Jan. 27 of this year will receive new ABS software. (Read More…)

Readers of the Nikkei [sub] were greeted this morning with the purported news that by the end of this month, Toyota “is expected” to recall its Sai and Lexus HS250h hybrids, which use the same braking system as the Prius hybrid. Furthermore, “the company is believed to have decided” to recall the current Prius, “and is expected” to notify the Transport Ministry of the plan early this week. (Read More…)

After piles of books have been written about the „Toyota Way,“ this round of recalls will have a permanent place in the annals of how to completely NSFW-up crisis management. The epicenter of the disaster at Toyota is not in the pedal dept., it is not in the software development dept., it is in the Public Relations Department in Toyota City. Or possibly, right at the top.

Last Friday evening, Toyota trotted out their CEO and founder’s grandson Akio Toyoda to address the complaints about Prius brakes. Toyoda said nothing of substance. What irked the public, and what became instant fuel to the already raging fire, was that Akio Toyoda refused to address the fact that Toyota had changed the Prius software, and changed the braking hardware in January, for cars in production. People wanted to know what happens with the cars they had already bought. Akio Toyoda left his customers in a lurch. Answering in very bad English instead through an interpreter made matters worse.

A day later, Reuters wrote that Toyota will recall the Prius “in the next few days.” Who was the source? A Toyota spokesperson? Nah. A “person close to the matter?” Nope. The source was a Toyota car dealer. “Toyota officials were not immediately available to comment.”

Today, the Nikkei [sub] writes that Toyota “has decided to recall and repair free of charge the latest model of its Prius hybrid sold in the domestic market due to complaints over brake problems.” And who’s the source? A Toyota spokesperson? Nah. (Read More…)

Based on the emails I’ve been receiving from TrueDelta’s members, I have underestimated the impact of the unintended acceleration fiasco on Toyota’s future sales. This fiasco is going to hurt Toyota, possibly for years to come. The problem isn’t that many people feel that Toyotas are unsafe. Most seem to recognize that a very small percentage of Toyotas have suffered from unintended acceleration. But they’re hearing about problem after problem, so Toyota’s quality seems to be lower. Most of all, Toyota’s public statements have seemed dodgy, and people seem to feel that they cannot trust the company to keep owners’ best interests or even their safety in mind.

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