Bulletproof quality came only after a long struggle

U.S. execs insisted, executives in Japan listened

Everybody takes for granted that the Toyota brand was born with product quality in its DNA.

In one sense, that's true. Even from its earliest days as Toyoda Loom Works in the late 1890s, the future Toyota Motor Corp. was all about continuous improvement of existing ideas, learning from mistakes, clever use of resources and a commitment to put the customer first.

But the quality of the first cars it sold in the United States was far from bulletproof.

It wasn't until the 1970s that U.S. Toyota executives such as Norm Lean, Max Jamiesson and many others made those old core Toyoda values relevant to the U.S. market. The U.S. team doggedly insisted on best-in-class quality and content that was tailored to American tastes.

In turn, based on Toyota's traditional obsession with quality, those American demands reached a receptive and responsive parent company. Toyota was deeply embarrassed by its U.S. debut in 1958, with the hapless Toyopet Crown, and was determined to do better.

Although the subsequent Corona and Corolla were more tailored to American tastes and had some quality improvements, Toyota vehicles still weren't close to being world-class. Engines, transmissions, brakes and other key components still failed at an alarming rate.

Despite many such bumps in the road, by the early 1970s, Toyota in Japan and the American team began to forge Toyota quality into the hammer of competitive advantage that it is today in the United States.

The Lexus brand is the ultimate expression of this. Lexus Division debuted in 1989 and went straight to No. 1 in the 1990 J.D. Power and Associates Initial Quality Study, with the fewest things gone wrong in the first 90 days of ownership. Lexus has been No. 1 or No. 2 for 17 out of 18 Power initial quality studies since its debut.

THE TASK AHEAD

But in the early days, the quality was far from bulletproof. Says Jamiesson bluntly: "Back then, the car was a piece of junk."

Jamiesson, now 74, was a Toyota executive in the 1970s and 1980s and was involved in sales, dealer development, parts and service and customer satisfaction. When he left Ford Motor Co. for Toyota, his Detroit colleagues made jokes about Toyotas being little more than recycled beer cans. They weren't far from wrong, Jamiesson admits.

BRING A POPSICLE STICK

He recalls that Toyota engines back then would "grenade" at 50,000 miles, and the brake pedal would "fold into the floor." At high altitudes, Toyota carburetors needed to be propped open with Popsicle sticks, or the engine would starve from insufficient air-fuel delivery. But the exterior fit and finish was good.

"The outside of the car was like a show car," Jamiesson says. "All the lines and tolerances were perfect, so that when the salesman showed the car, it was beautiful. And the interiors were great, too. So we told Japan, 'This is great; it shows we can make a quality car. Now make the rest of the car like that.' The rest of the things need to function."

The American team came up with a list of problems that had to be fixed. They included both substandard components, which were likely to fail, and features that were unsuitable for the U.S. market — even if they were acceptable in Japan — such as carburetors using older technology instead of more modern fuel injection, which American consumers had come to expect. Over months and years, they eventually checked off all of them.

Every time Lean went to Japan for executive meetings, he took a fix-it list with him. The list included brakes, automatic transmissions, fuel injection, differential noise, windshields and paint. The upholstery disintegrated with prolonged exposure to sunlight, causing U.S. staffers to refer to them as "sayonara seats."

It helped the balky communication process with Japan that Lean, Jamiesson and service manager Lee Sawyer had once been Los Angeles high school auto shop teachers. If the Americans explained problems and solutions like educators, the Japanese executives understood better than if the Americans had brought out scads of engineering schematics and research to prove their point. It also allowed Japanese executives to save face and still make improvements to the product.

"The thing that irks me is that people say Toyota just copied everything. Actually, Toyota bought the licenses to these items, then improved them," says Larry Boland, who worked in service jobs at Toyota in the 1970s and 1980s.

And many innovations came internally. Toyota's U.S. staff came up with ideas that Japan embraced. The 1972 Toyotas became the first cars with "idiot lights" on the instrument panel to indicate problems such as low oil, coolant, transmission or washer fluid levels.

Jamiesson says Toyota's underlying quality was solid by 1977 or 1978.

Dave Power, the founder of J.D. Power and Associates in Westlake Village, Calif., was among the first outsiders to recognize that Toyota could turn quality into a competitive advantage, despite what he calls the cheap, "bamboo and tin" image of Japanese imports in the late 1960s.

In his first research report for Toyota, a prophetic "Southern California Imported Car Buyer Study" of 682 consumers, Power said that Toyota Corona owners were more likely than competing owners to cite "workmanship," or "construction of the car" as a reason for purchase.

"The feature of quality construction and workmanship is something that can help Toyota further differentiate itself from the other imports," Power said in the August 1968 report.

A lot of what attracted the early U.S. executives to Toyota was the freedom to try new things and to have an immediate impact — in sharp contrast to the bureaucratic, top-down domestic manufacturers where they had cut their teeth.

"It was a paradise," says Lean, now 80, who joined Toyota in 1969 as national service manager and was the top U.S. executive in the late 1970s and early 1980s.

"All I had to do was set up the ingredients and give them to Japan, and they were responsive and eager. The early Toyota executives in Japan were all World War II-aged people. They had a great lust for success in their business and had enormous respect for the U.S. auto industry. They wanted to learn what was going on here.

"So when we asked for things, Toyota Japan answered, 'Yes.' Not 'Why?' As long as we gave them good results, we could maintain that relationship."

For example, Lean says that when he was the head of training at Ford in 1965, it took a year to get approval to build a mobile training van for dealership workers in sparsely settled states such as Arizona, Colorado and New Mexico. The idea was to spare the dealerships time and money for travel.

Lean decided to do the same thing at Toyota and submitted the idea for approval. It took 15 minutes. The Japanese executive in charge said, "'Why are you telling me this? If you want to do it, then do it,' " Lean says. "I knew I was in the right place."

Several U.S. Toyota executives, both active and retired, recalled a similar moment when they knew they had come to the right place.

For John Turmell, who joined Toyota in 1968 and spent 33 years there, the moment came when he discovered that the Toyota factory didn't even have a repair area at the end of the assembly line to fix its mistakes. At General Motors, the repair area was nicknamed, "The Bay of Pigs," says Turmell, now 65.

"In 1972, I went to Japan for training for a distribution job. ... Toyota took us through the Takaoka plant, and I saw all this automation, saw how clean it was, how organized," he says.

"Then the cars came off the line, and I asked, 'Where is the Bay of Pigs, where you repair the cars?' And they said, 'We don't have such a thing. The car is fixed on the line.'

"I thought to myself, 'Someday, these guys are gonna run over everyone.' "

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