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Toyota fails to apply its own wisdom

April 9, 2010

Toyota fails to apply its own wisdom


Irv Miller’s bombshell in the downward spiral that is Toyota Motor Corp.’s global quality scandal isn’t the work of a bomb-thrower.

His Jan. 16 e-mail, clearly written in frustration, is the voice of a Toyota loyalist desperately trying to get his longtime employer to face a metastasizing problem that is badly damaging its brand from the United States and Europe to China and the Japanese homeland.

"I hate to break this to you but WE HAVE A tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models," Miller, former head of communications for Toyota Motor Sales U.S.A., wrote to a Japanese executive working at Toyota’s headquarters in California. "The time to hide on this one is over."

He was right then. He was right when he followed through on his long-planned retirement about six weeks later, just as the Toyota furor reached a fever pitch in the days and weeks after congressional hearings. And he’s right now, though I suspect Miller would be just as happy to be proven wrong.

But he wasn’t. When the next drafts of this chapter in Toyota’s history are written, the smart ones will focus on how a company that rode the continuous learning of its production system to the pinnacle of the global auto industry failed — no, refused — to apply the same thinking elsewhere.

Instead of sharing recall and quality information to serve customers, Toyota compartmentalized it. Instead of globalizing its corporate culture to match its fabricated image of seamlessness, it clung to a command-and-control system bound tightly to its Japanese roots. Instead of listening to problems surfaced by employees, a cornerstone of the Toyota production system, it ignored its own people and transformed a quality problem into a full-blown crisis.

More than 8 million cars and trucks recalled. A record fine, $16.4 million, levied by U.S. regulators against Toyota. And customers left with the impression, bolstered by reams of documents now in government hands, that the "customer-focused" company was more interested in covering its corporate keister than coming clean with the people who buy its products.

Worse, at least for Toyota’s once-sterling rep and its sizable cash hoard, are "smoking-gun" memos like Miller’s and others now part of the official record. Taken together, they are likely to be figurative clubs that plaintiffs’ lawyers will wield for years against the world’s richest automaker to extract enormous sums to compensate clients (and, of course, themselves).

Miller could have told them that, too. So could just about any sentient adult here with only a passing understanding of the American tort system and the sure-fire ways lawyers and ordinary folks use it to reap their rewards, justified and not.

A few years ago, when Toyota allegedly could do no wrong in the eyes of a growing number of consumers and many in the automotive media, Miller stood near the back of Cobo Center’s Riverfront Ballroom while reporters and critics swarmed the newest offering from Toyota.

I sidled up, looked up (he’s, what, 6-foot-6 or so?) and said: "You get such a free ride." Yeah, he replied, "isn’t it great?"

Until it isn’t.

Perceived greatness, it should now be clear to anyone paying attention to the global auto industry, is the cultural kiss of death. It hides flaws. It distorts public images and press coverage. It amplifies successes (Camry, Pruis, almost anything called Lexus) and mutes failure (engine sludge, "silent" recalls masquerading as warranty repairs, the failed Tundra full-size pickup).

Here in Detroit, we know about the perils of perceived greatness, perceived here long after it left town. It was replaced in many driveways by sedans from Toyota, minivans from Honda, small SUVs from Hyundai, and the Detroit culture struggled to understand why.

Oh, there were — still are — lots of people telling Detroit why, warning about the price of inaction, the broken business model, the unsustainable union contracts and corporate debt loads. But it took a historic crack-up before the message started to sink in, the hard way.

Which is exactly what Irv Miller, Toyota loyalist, was trying to say.

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