One of the lingering concerns over the Toyota recall is whether Toyota’s “precision steel” shim fix to the recalled CTS gas pedal assembly will be a reliable long-term solution. Our analysis indicates that these questions might be well-founded, and we’re not the only ones concerned about the viability of Toyota’s proposed fix. In an interview with Toyota’s Jim Lentz yesterday evening, NPR asked why Toyota was using a redesigned pedal for new production, but only offering the shim fix to existing customers. Lentz insisted that the repaired pedals would be as good as the redesigned pedal, that the costs of repair and replacement were about the same, and that the main reason Toyota was repairing rather than replacing recalled pedals was the desire to “get customers back on the road… as quickly as we possibly can.” That’s when NPR went for the jugular.

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Kudos to Edmunds Inside Line for throwing up pictures of two Toyota gas pedal assemblies. The recalled unit, made by CTS, is shown above in a 2010 Camry. The non-recalled Denso-produced unit is after the jump.

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Toyota’s recall of 2m vehicles in Europe isn’t doing much to clarify the chaos surrounding the unintended acceleration panic that is enveloping the company. Eight models are being removed from Europe’s roads, including Auris, Avensis, Aygo, Corolla, iQ, RAV4, Verso and Yaris. The fact that two of these models (iQ and RAV4) are built exclusively in Japan (European Corollas are built in Japan and South Africa), seems to suggest that the problem is not limited to gas pedal assemblies supplied by CTS, which has been blamed for the US recall. The other models are built in France (Yaris), Turkey (Auris, Verso), the Czech Republic (Aygo) and the UK (Avensis, Auris). According to Automotive News [sub], the recall affects these models built between Feb. 2005 and this month, even though

Toyota lengthened the arm of the friction lever and changed its materials on all vehicles produced in Europe using the subject accelerator pedals starting in mid-August 2009

Curiouser and curiouser…

The ongoing kerfluffle over Toyota’s recall of over 2m vehicles for a gas pedal defect which (allegedly) caused unintended acceleration has caught much of the automotive media flat-footed. How could it be, many have wondered, that the automaker most associated in the US market with the concept of quality has slipped so badly? As TTAC’s Steve Lang recently discussed, Toyota has been on a decontenting binge since the mid-to-late-1990s, putting profit above the quality obsession that had defined its operations up to that point. As a result, the current generation of decontented Toyotas and accompanying quality issues and recalls can be seen as the culmination of a long-term trend. But why did that transition take place? Though it’s easy to blame greed and mismanagement for the decline in Toyota’s quality, the decline in standards was actually a natural progression of Toyota’s constantly-evolving, efficiency-obsessed production system.

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Supplier CTS, who produced the gas pedals now under recall from Toyota, tells Automotive News [sub] that it “built parts to the automaker’s specifications and says it has no knowledge that its parts were responsible for any accidents or injuries.” Sources at CTS tell AN that although they are working on a fix with Toyota and that new pedals have been tested and are shipping to Toyota plants, “this is their recall.” That would seem to contradict the facts of the case, as Denso, Toyota’s gas pedal supplier for Japanese-built models, has not been involved in the recall. According to Inside Line, the issue with pedal return damping that has plagued CTS-supplied, US-built Toyotas has not turned up in Denso-produced gas pedals.
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Though Toyota is getting the brunt of the attention for what are apparently faulty gas pedals, the fact that the problem has been traced to supplier CTS means that Toyota isn’t the only OEM that’s shutting down production until a fix for the pedals is found. Bloomberg reports that Ford’s JV with Jiangling Motors in Nanchang, China has halted production of the Ford Transit commercial van, after switching over to CTS-supplied pedals in December. “We think it’s pretty isolated, but we are aggressively running it to ground,” Ford’s Alan Mulally told analysts in today’s financial results conference call. No other Transits are said to be affected, and Jiangling says that they have not received any reports of unintended acceleration for its Transits.

Collisionrepairmag.com reports that AzkoNobel, a chemicals company from the Netherlands, has teamed up with Toyota to create Sikkens Autoclear LV, a scratch resistant, self healing clearcoat. The product has been approved by Toyota for use on the Lexus LS range as an aftermarket clearcoat to be used at Toyota dealerships and Toyota affiliated collision repair facilities around the world. According to the article, “Sikkens Autoclear LV Exclusive is highly resistant to scratches, and holds up extremely well after repeated washings, but it truly differentiates itself from other clearcoats with its outstanding self-healing characteristics when a vehicle is nonetheless damaged. With extraordinary “re-flow” properties designed into the coating, small scratches virtually disappear in minutes when exposed to a heat source at temperatures ranging from 40-80 degrees celsius–and even exposure to the sun will initiate the healing process.”

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A strong team is only as good as its weakest link, particularly in the automotive industry. Treat your suppliers well and they’ll play fair by you. Try to screw them and they’ll collapse leaving you with serious production problems. Detroit (Chrysler in particular) had the worst reputation for treating their suppliers badly, but the Pentastar brand now claims to be trying to change all that.

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Battered auto parts makers in Japan are surviving on a diet of non-auto parts.

Today’s Nikkei [sub] has it that companies like Toyoda Gosei,. NHK Spring Co. and other auto parts makers are earning an ever greater proportion of profits from electronics components and other businesses not related to cars.
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It’s been a while since we’ve heard the word “buyout” echoing out of Detroit, as 2008 marked the year in which auto industry employees finally started to be fired like everyone else: without a hefty severance kiss-off. Ford, on the other hand, did not get a shot at free house-cleaning in bankruptcy court, so it’s bringing back buyouts. According to Market Watch, the Blue Oval is offering blue-collar employees a $50,000 lump sum payment and a $25,000 voucher for a new vehicle or another $20,000 lump sum, as well as six months of health insurance coverage. There’s even an extra $40k for workers of “a certain age.” But this being Detroit, employee benefits are either feast or famine. While Ford’s workers are being offered cash for their jobs, the former Ford parts division Visteon announced today that it is seeking to dump pensions for 21,000 retirees in bankruptcy, following Delphi into yet another stealthy yet popular form of indirect automaker bailout.

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As the world recedes, South Korea grows. First Hyundai registers double digit growth in the United States and now other automakers want a piece of the South Korean action. The Korean Times reports that Renault-Nissan announced that they will increase the amount of their South Korean parts suppliers from 28 to 100 by 2013. 108 major subcontractors took part in a conference along with officials from Renault-Nissan’s purchasing organisation.

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Magna’s abortive attempt at buying Opel burned a few bridges for its supplier business, most notably drawing the ire of Volkswagen. But now that the deal is off, Magna has been forgiven by VW, and it seems even GM is ready to bury the hatchet. Reuters reports that GM has awarded the manufacture of their 3rd generation frames for full-size light-duty pickups and sport utility vehicles to Magna’s division Cosma International. “This is the third generation of frame business that we’ve been awarded by General Motors,” said Tracy Fuerst, a Magna spokeswoman. “To keep that business is certainly a win for us.” Curiously, the value of the contract wasn’t disclosed and no new jobs would be created but it sent the value of Magna’s share up by 1.9%. Life, and business go on… meanwhile, this is the first sign that GM is actively investing in a new generation of body-on-frame vehicles.

The AP reports that GM is suing supplier JTEKT North America Inc. of Plymouth, MI for faulty steering systems used in 2005 model year and later Cobalt, G5 and HHR models. GM’s suit alleges the JTEKT steering systems exhibited “excessive gear backlash,” causing a variety of noises that the General has spent $30m fixing under warranty so far. “JTEKT contends the components all met the specifications and testing requirements that GM gave it,” says the supplier’s lawyer. “The issues do not affect the operator’s ability to control the vehicle. This is a noise issue.” GM admits that the issue does not affect safety, but claims total repair costs could continue to rise as more vehicles receive upgrades under warranty. Current Cobalts and derivative models have received upgrades, although the AP does not specify when they took place. Keep an ear out for this problem if you’re considering a used Cobalt.

There’s no shortage of analysis hailing Ford’s last-man-standing status, but there’s plenty of buried truth that’s not being brought to light. For example, Ford’s version of Delphi, bankrupt spun-off supplier Visteon. The firm’s non-European and Asian operations have been in Chapter 11 bankruptcy since May, and according to Automotive News [sub], it’s running out of DIP financing. Ford financed the supplier’s first month in bankruptcy, after which Visteon began burning through cash it was holding as collateral for its borrowings. And now that money is set to run out in March, forcing the firm to go hunting for $150m in further DIP financing. Unsecured creditors are objecting, calling the move a power grab by senior, secured lenders who seem willing to lend more money in order to edge out unsecured claims. And while that battle rages on, other OEMs are bailing on Visteon. Chrysler will come up with some $31m to buy back its supply business from the weakened supplier, Nissan is buying its Visteon-run North American interior plants back for $11m, while GM shifted its Visteon business to competitors at a cost of $22m. Ford, Visteon’s biggest customer and former owner is making no such move to abandon its most crucial supplier. If DIP funding comes up short, or if more bumps appear in Visteon’s bankruptcy (or if things continue as normal… Visteon lost $38m last quarter), Ford will face the brunt of the fallout. And with $30b in debt, and no government escrow account to draw on, Ford won’t be able to help out Visteon the way GM rescued Delphi earlier this year.