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Panel: Toyota culture contributed to recall crisis

A seven-member panel investigating Toyota's recalls of more than 14 million vehicles found that the company's culture contributed to the problems, the New York Times reported. The panel was created last year by Toyota and is headed by Rodney E. Slater, a former U.S. transportation secretary, the article said. Toyota is paying the panel, which will spend a second year monitoring how well the company carries out its recommendations and their effectiveness, the Times reported.

[The] report said Toyota had been slow to discover the [acceleration] pedal and floor mat issues because it viewed complaints made to the company or to federal regulators about sudden acceleration skeptically and defensively. It said Toyota had failed to apply the principles of its manufacturing process, known as "the Toyota Way" and built around the concept of detecting and responding to problems quickly, to evaluate criticism from external sources.

Jeremy Anwyl, CEO of vehicle information website Edmunds.com, told the Times:

"The very culture that works so well for them when things are stable and predictable really doesn't work when you're dealing with a fast-paced crisis."

The Times article noted that Toyota was the only major automaker to report a sales decline last year, while the rest of the industry experienced a 13% gain. The article said:

The report said Toyota had treated safety differently from other manufacturers, by lumping it into the larger issue of "quality" and making it part of eveyone's responsibility rather than assigning it to specific executives and employees.

According to the Times article, the panel report recommended that Toyota name a single executive to oversee its North American operations, "which now operate as separate sales, engineering and manufacturing organizations, each reporting to executives in Japan."

Among the top recommendations by the panel is for Toyota to decentralize its corporate structure and break down the "silos" within its organization that "hindered information-sharing and contributed to miscommunication." The report concluded, "Toyota has erred too much on the side of global centralization and needs to shift the balance somewhat toward greater local authority and control."

(Source: New York Times, May 23, 2011.)



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