January 28, 2010
TOKYO — As Toyota’s problems mounted in North America with the announcement of a halt to sales and manufacturing of the bulk of its cars, commentators in Japan fretted Wednesday that the automaker’s problems could seriously hurt the reputation of the rest of Japan’s manufacturing sector.
“Toyota’s reputation for safety is in tatters, and it is inevitable that its image among consumers will suffer,” the Sankei Shimbun daily said.
The Japanese feel a certain sense of pride that, despite the nation’s long economic slump, a handful of prominent exporters like Toyota dominate overseas. Toyota has led the way in gas-electric hybrid vehicles and other environmental technology.
“The discrediting of Toyota could even destroy the world’s trust in Japanese manufacturing, which relies on its reputation for high quality,” the Tokyo Shimbun daily warned.
Toyota Motor Sales U.S.A. announced Tuesday that it would stop selling and building models that were already the subject of a recall over a problem with accelerator pedals.
The eight models, including the popular Camry and Corolla sedans, accounted for more than a million sales in 2009, 57 percent of Toyota’s American total for the year.
Toyota took similar steps in Canada. Officials said that the company was considering what measures to take in Europe but that it had not made any concrete plans.
Transportation Department officials in the United States on Wednesday said that they were ones who advised the automaker to act quickly to stop production of the vehicles.
“The reason Toyota decided to do the recall and to stop manufacturing is that we asked them to,” Transportation Secretary Raymond LaHood said. In an interview with WGN radio in Chicago, Mr. Hood went on, “We were the ones that really met with Toyota, our department, our safety folks, and told them, ‘you’ve got to do the recall.” They decided to stop the manufacturing.”
Mr. LaHood said the department took notice of the company’s problems after an accident in California last year in which three people were killed. Since then, he said the department had discovered other safety issues with the company’s vehicles, and has met with engineers from Japan.
“We told them, ‘we’re going to call you out on this.’ They stepped up and they did the right thing, and we applaud them for doing this,” he said. Mr. LaHood said the department would help the company find a solution. “We’re going to get to the best safety that’s possible. They want to manufacture cars that are the safest for people to drive.”
Mr. LaHood said Toyota had figured out solutions to the problem on some of its vehicles. He recommended that owners immediately take their vehicles to dealers, and said the company would either fix them or find a way to provide other transportation while it found a solution.
Analysts in Japan have raised concerns for some time that Toyota’s rapid growth in recent years was overstretching the company. Toyota’s president, Akio Toyoda, has himself berated the company for excessive confidence, which he said had set the company up for a painful fall in the global economic crisis. He said last year that Toyota was “grasping for salvation.”
“We have had fears for quite a while now that Toyota lacked the human resources and production capacity for such rapid expansion. By chasing numbers, they were becoming seriously outstretched,” said Masahiro Fukuda, manager of research at Fourin, a global automotive research company based in Nagoya, Japan. “Many of us weren’t surprised over the big recalls; we were more surprised that it took Toyota so long.”
Other analysts faulted Toyota’s zealous pursuit of efficiency and cost-cutting. “The same parts were used here, there and everywhere, on major models,” said Koji Endo, managing director at Japan Advanced Research, a Tokyo-based research organization. “That’s very efficient, but very risky. If the part turns out to be faulty, you suddenly have a problem on your hands involving millions of cars.”
Now, halting its factories could have a “tremendous impact” on Toyota’s bottom line, especially if the interruption drags on, Mr. Endo said. “Toyota will have to change the design of the gas pedal, get relevant approvals, set up production, then exchange parts for millions of cars on the road, cars sitting at dealerships and cars they were assembling at their factories,” he said.
Toyota’s woes are throwing the carmaker’s recovery into flux, analysts say. Toyota this week said it expected group sales to grow 6 percent from the previous year to 8.27 million. The company reports third-quarter results on Feb. 4.
Some in Japan questioned whether Toyota was taking too drastic a step in suspending production.
“Toyota says it has halted sales and production to show it will be thorough in its response, but the move carries the risk of further heightening consumer fears,” the Mainichi Shimbun newspaper said. “Even a quick restart of sales might not be enough to ward off a serious shift away from Toyota.”
But Mr. Fukuda said he saw Toyota’s decision to suspend sales as a typical Toyota move. “At a Toyota factory line, when something goes wrong, they stop the whole line.” he said. “Now Toyota is doing the same thing, at the company level. That’s the Toyota way.”
Micheline Maynard contributed reporting from Detroit.
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