Tuesday, March 16, 2010

You Cannot See Something That's Not There

The Atlantic's economics blogger Megan McArdle graphs an amazing coincidence: the evil goblins inside Toyota automobiles seem to have a particular grudge against older Americans and immigrants.

Hmmm...somewhere in Aichi Prefecture, someone is muttering, "Yappari..."

Later - And of course, if I were a former CEO of Toyota Motors, I would be quietly drumming my fingers on a smooth, black meeting room table, very slowly...

3 comments:

Janne Morén said...

He'd need a cat. cf. the expression "He's a white cat and a monocle away from being a villain in a James Bond movie".

Anonymous said...

Am I alone in thinking that this Toyota affair smacks of one part media-generated hysteria, one part American political posturing, one part Schadenfreude, and one part ambulance chasing opportunism?

I confess: I was caught up by the US media blitz, too. For a while, despite being a loyal and satisfied Toyota customer for years, I had no reason to doubt the veracity of alleged vehicle defects peddled in the US media. Now a series of thoughtful auto industry and business-related articles has me questioning the extent of the problem.

First, I was surprised to learn that auto recalls based on safety concerns is a regular pastime in the United States. National Public Radio (NPR) provides a lot of useful data on these recalls over the past decade broken down by auto company, type and year.

http://www.npr.org/templates/story/story.php?storyId=124235858

In its "NPR Vehicle Acceleration Complaints" database, NPR shows clearly that Toyota is far from the worst offender in this category. For almost a decade, Ford , GM and Chrysler led the way in customer complaints on sudden acceleration. Did these complaints, accidents and auto-related deaths make world headlines? No.

So why is it suddenly a newsworthy event in the case of Toyota?

In the latest issue of The Oriental Economist Report (TOE), Richard Katz suggests that it was because of an alleged cover-up. "The real reason Toyota is being singled out is because US authorities believe it acted deceptively to hide its mistakes and may still be doing so." Katz goes on to argue that the problem stems from a series of customer complaints to the National Highway Traffic Safety Administration (NHTSA) as early as 2004. Toyota allegedly did nothing to investigate these complaints.

But trying to determine which of the thousands of suddenly reported cases of vehicle malfunctions are legitimately the company's fault is like trying to predict the future; it's compounded by the difficulties in replicating the "incident" in a controlled setting.

Engineer-turned-journalist Frank Ahrens stresses that point in the Washington Post:

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/06/AR2010030602448.html

And if they can't replicate the problem so easily, is it fair to allege a top-management "cover up"? Some insist it happened. Toyota denies it.

Who is telling the truth?

I am beginning to see the real problem here: hungry sharks smell blood and want a piece of the action -- both at the political level and at the customer level.

Take, for example, this thought-provoking article by award-winning business journalist Ed Wallace in BusinessWeek.

http://www.businessweek.com/lifestyle/content/feb2010/bw20100225_403524.htm

Wallace found much of the recorded Congressional testimony and the customer complaints to be highly suspicious. Emotional? Yes. Entertaining? Maybe. But clearly the case of vehicle defection over driver negligence? No.

And if you can't trust the testimonies, and you can't recreate the problems in order to fix them, and you can't stop the media onslaught in the United States (which incidentally is not much of an issue in Europe), what do you do?

Anonymous said...

The blind spot in Toyota and probably many other manufacturing entities is in not diversifying for component and material failure. Cost reduction associated with scale has a limit and when your entire lineup of products use the same (and untested over time) component, failure leads to catastrophe. The very same people who think it is normal to hedge against customer preference in style, color, specs even on virtually otherwise identical products by having choice and variety have not thought through about having very same accelerator electronics for every item they sold in North America. And then to have the subsidiary operation turn what would have been a fairly uneventful quality control issue into a major corporate crisis by thinking that dealing with technical issues is to deal with the government regulators successfully, and the HQ management happily being fed the same BS is tragic.

YY