Toyota faces major repair work on its ailing image
Toyota's quality wrangler Hiroyuki Yokoyama: "In this job, every day is a drama."
TOYOTA CITY, Japan -- Hiroyuki Yokoyama, the top defect troubleshooter at Toyota Motor Corp., had just taken over as the company's general manager for quality when his first crisis hit.
It was 2005, and Toyota was recalling nearly 1 million pickups and SUVs in the United States that might have been equipped with faulty steering rods. It was a sign of things to come.
Four years later, after Yokoyama had been promoted to managing officer for quality and customer service, an even bigger crisis erupted.
"In this job, every day is a drama," Yokoyama, 58, said in an interview.
With cases of unintended acceleration piling up in the United States, a massive recall was announced to replace floor mats and make other fixes. That action in 2009 pushed Toyota to the top of the U.S. safety recall list for the first time ever, further battering the company's reputation for superior safety and reliability.
And left in the wake: numerous deaths and accidents, all blamed on Toyota.
The problems have mounted over the past decade as the automaker grew explosively on its way to ousting rival General Motors as the global No. 1.
Now with the world's biggest carmaker besieged by record losses, a series of legal challenges and unprecedented recalls, Toyota's quality czar is the point man in its quest for redemption.
Big job ahead
Yokoyama said Toyota has learned from recent lapses and has new quality improvement plans in place. But salvaging its integrity won't be easy. Analysts say Toyota has a long way to go -- and a great deal at risk.
The company's reputation is founded on quality and reliability. Since 2005, Lexus has remained atop J.D. Power's Initial Quality Survey, with the Toyota brand not far behind. While their rankings didn't slip, the gap between them and their rivals shrank, with the industry average creeping closer to Toyota.
In 2005, the Toyota brand had an initial quality score of 105 problems per 100 vehicles against an industry average of 118. By 2009, Toyota was at 101 and the industry at 108.
Toyota actually improved to No. 4 in J.D. Power's 2009 Vehicle Dependability Study from seventh in 2005. Lexus slid to third after topping the chart in 2005.
But perceptions may be changing in the marketplace. Compete Inc., a Massachusetts research firm that studies online car shopping, says Ford has surpassed Toyota in customer consideration for the first time since Compete began tracking such data in 2002.
Analysts and dealers say Ford is benefiting from an improved lineup and better quality.
Edmunds.com says that for the Ford Fusion sedan, "purchase intent" -- when a shopper on its site takes time to configure a vehicle online -- rose from 5.1 percent of mid-sized car shoppers in January 2009 to 7.8 percent during the first two weeks of this month. Over the same period, purchase intent for the Camry slipped from 15.3 percent to 12.3 percent.
Yokoyama said quality has suffered for a number of internal and external reasons:
-- Toyota's rapid increase in production.
-- A proliferation of model types.
-- More electronic controls.
-- Swelling global ranks of employees.
-- Customers' heightened quality expectations.
"Internally, we were not able to keep up with the external changes, and some of those results showed up in quality," said Yokoyama, a die-hard Washington Redskins football fan who worked in the U.S. capital following safety regulations for Toyota in the 1980s.
In response to rising quality problems, then-President Katsuaki Watanabe tapped Yokoyama in 2005 to spearhead a quality improvement program called Customer First.
Yokoyama initially aimed to streamline feedback of customer complaints so problems could be caught earlier. The program also tried to weed out manufacturing and design bugs before cars left the plant.
But over the years, recalls have shifted the focus to durability and safety, Yokoyama said.
For example, the steering-rod recall highlighted the need to factor in longer life spans for today's vehicles. Some of the trucks involved had been on the road for a decade.
Meanwhile, last year's floor mat recall underscored a need for engineers to account for a variety of use patterns. Some customers prefer to use nonfactory floor mats or lay down all-weather mats on top of the original carpets -- two practices that could lead to entrapment of the accelerator and sudden unwanted acceleration.
"We learned to be more sensitive of the way the customer uses the product," Yokoyama said.
Toyota warns against putting one carpet on top of another or using mats designed for a different vehicle but says people do that anyway.
To what degree should Toyota be held responsible for designing around such behavior?
"If we put too much emphasis on the efforts we are making to accommodate different usages, then the awareness of the customer of the need to use the product properly could deteriorate," Yokoyama said. "The balance is very difficult."
A key element in this will be getting more in tune with customers' needs and peeves.
"Generally speaking, we are selling 80 percent of our vehicles overseas, and the network of collecting information is weaker in overseas markets than in Japan," Yokoyama said. "So there are areas where we can make improvements in the information-gathering network."
Floor mat fiasco
Last fall's recall of 3.8 million Toyota and Lexus vehicles was a nadir for the Japanese automaker. It was Toyota's worst ever in the United States and the sixth-biggest on record at the National Highway Traffic Safety Administration.
It also opened the door to accusations that Toyota was trotting out floor mats to cover up more serious safety lapses, such as ill-conceived start-stop buttons or faulty electronic throttle control systems.
Other critics wondered why Toyota's drive-by-wire cars weren't equipped with brake override systems that could have stopped runaway cars.
"It is a perfect storm for Toyota," said Sean Kane, president of Safety Research & Strategies Inc. in Rehoboth, Mass. "I don't think they're unfairly being targeted. I think they're finally being targeted."
Kane pointed to several issues that he said show a lack of due diligence by Toyota.
The start-stop button turns the car off only after being depressed for three seconds -- something that may be counterintuitive to the panicked driver of a runaway car.
More important, the Toyota vehicles lacked a brake override system as an additional backup -- a technology long ago adopted by some European brands that also use drive-by-wire throttle controls.
Yokoyama said the vast majority of unintended-acceleration cases are caused by human error and floor mat interference. But he disputed allegations that the company's electronic throttle control was faulty. He did not address other potential causes of unintended accelerations.
The electronic throttle-control system has dual sensors backstopping each other in monitoring the accelerator pedal's position, along with two more sensors double-checking the throttle position. Meanwhile, there is a control computer actuating the throttle and a monitoring computer surveying all the computer signals in the circuit. If any abnormal signals are detected, the engine is immediately returned to idle, Yokoyama said.
Furthermore, Toyota says, the throttle control is reliable under extreme conditions of electromagnetic waves, temperature and vibration.
Yokoyama said Toyota is reviewing the design of its stop-start buttons. But the three-second depression period is a safety feature to avert accidental engine shutdown, he said.
Toyota would have introduced a brake override system earlier, but the company was still trying to perfect the technology, Yokoyama said. One of the problems with the technology was how to start a car from a standstill on a hill without having it roll backward, he said.
After last year's recall for unintended acceleration, Toyota announced it will install the systems in all new Toyota, Lexus and Scion vehicles for sale in the United States by 2011.
"It's not because of the floor mat incident that we decided to introduce the override system," Yokoyama said. "We have long been studying it. If there was something that changed with the floor mat incident, it was seeing whether we could accelerate its introduction."
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