Toyota: When the script flipped

Growing up in Michigan, one of my first memories is my father traveling to Japan and returning with a bounty of exotic goods  — a rice painting for my mother and a red and blue silk kimono for me.  A few weeks later, a group of Japanese businessmen who worked for Mitsubishi came for dinner. They were working with Chrysler engineers on a project and there was a cultural exchange in the process. I remember the businessman as polite and they seemed to enjoy the American meal my mother prepared.  It was my first brush with Japanese culture growing up in Michigan, and my curiosity was piqued.

When I was in elementary school, Toyota brought a group of families to a nearby neighborhood, and as a result a flood of Japanese children came to my elementary school. I made friends with a fourth-grade Japanese girl who introduced me to the entire Hello Kitty lineup and who wrote notes with delicate penmanship. We learned much from each other, in the way that children do, without judgment or bias, unaware of the resentments building around us as Michigan jealously looked on at the Japanese car economy.  We stayed in touch when she went back to Japan.

At that time, the Big Three companies were struggling to find their place with the emerging power players in Asia — Toyota, Honda, Nissan, Mitsubishi, Subaru and Mazda.   The hardcore Detroiters felt that the Japanese had stolen business, but in reality, it was American companies that had lost that business to Toyota and Honda as the perception of American quality declined. In the 1986 Ron Howard film Gung Ho, Michael Keaton portrayed the frustration of the every man autoworker. It was reported in a 2007 Business Week article that Toyota executives used this film as a guideline for how not to manage American workers.  But when Americans car companies lost their customer, it was the employees who were angered, not the car-buying public. Sales showed that when it comes to buying American, the loyalty ends with Levis. For American buyers, U.S. executives became the trusted face of Toyota, as quality became paramount.

Yet, what’s most interesting about the recent troubles fallen upon Toyota’s quality department is that history indeed repeats itself.  Toyota has fallen prey to the same factors that dulled GM, Ford and Chrysler — growth that surpasses the ability to maintain standards. In the coming days Toyota will scramble to pick up and dust off it’s tarnished reputation, but if history is to be learned from, this lesson won’t come without painful side effects. The flurry of reports and the unmanaged messages coming from CEO Akio Toyoda will cause just as much damage as the actual problems facing the unsafe vehicles.  For Toyota the headache is two fold knocking out its most popular vehicles, and magnified in the brake problem in the Prius, Toyota’s symbolic leading vehicle of green innovation.  Experts are estimating the blow could cost 100,000 in vehicle sales according to CNN report. But without a united front of trust and swift moves to effectively demonstrate a recall, fickle consumer losses are hard to anticipate. Soon, top PR firms will take over this job and mitigate the damage, but the waters will be tricky if Toyota doesn’t stop and pay heed.

Toyota finds itself in unfamiliar territory — how to handle a crises in American confidence.  The company must look toward the past of American companies bitter battles with public perception. The most famous example — the 100-year relationship between Ford and Bridgestone/Firestone that was obliterated by the 1990 Ford Explorer tire controversy, and what Ford has spent much of the past two decades fighting to overcome.  In similar reports to the Toyota issue, it seems that company officials had some knowledge of a safety problem, but failed to address it, and instead got into  a blame game.  This was the final blow to American perception, though American cars did not lose their luster overnight.  They began to lose some of their sturdy quality marks in the early 70s with Chevy Vegas and Ford Pintos tainting their steadfast reputations.

Toyota can come back with swift moves to demonstrate a grasp of its’ manufacturing snafoos, but in this day and age of instant reaction, it doesn’t take much to taint American consumers.  Just as Americans felt no ill will about deserting their own, they certainly won’t with Toyota and Lexus.  Inevitably, this problem will trickle over into perceptions of other Japanese automakers, who could get caught in the friendly fire of stereotyping.

What remains for certain — with Ford  ( referred to in jest as “Fix Or Repair Daily” by American-car haters in past years) grabbing top-quality marks,  GM slowly earning more favorable remarks in its leaner product ine and Hyundai emerging as the luxury marque to beat, nothing about the car business is set in steel.

Related articles:

• Toyota chief apologizes, but no new recall (cnn.com)
• Toyota Plans Media Blitz as Stock Loses $21 Billion (Update1) (businessweek.com)
• Andy Borowitz: Toyota Unveils New Slogan: “Drive a Toyota. You’ll Never Stop.” (huffingtonpost.com)
• Toyota’s Weekus Horribilus (meganmcardle.theatlantic.com)
• Toyota President apologizes… again, calls situation a “crisis” (autoblog.com)

Tagged as: Chrysler, Ford Motor Company, Michael Keaton, Toyota, Toyota Prius, United States