NEWS ANALYSIS

GM recall is bad, but not yet Toyota-bad

Over one grueling day on Feb. 24, 2010, Akio Toyoda testified for three hours in front of the House Oversight and Government Reform Committee (pictured), addressed U.S. dealers who had gathered in the capital and did an interview on American TV.

Photo credit: Reuters
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TOKYO -- As bad as the General Motors ignition switch recall is, the storm still doesn’t match the hysteria whipped up four years ago by Toyota’s unintended-acceleration crisis.

The Toyota recall was, and still is, the benchmark mammoth recall of our time.

The human toll of GM’s faulty design is greater. GM has linked 12 fatalities to the defective ignition switch that can cause airbags to fail in a crash.

Toyota and the National Highway Traffic Safety Administration have confirmed only four deaths from a Toyota-made vehicle speeding out of control.

Yet the impact, scope and controversy of the Toyota case make it an industry watershed.

From the start, an air of uncertainty surrounded the Toyota recalls. First, engineers suspected trapped pedals. Then it was sticky pedals. And all the while, skeptics pointed to faulty electronics -- and what they claimed was a massive Toyota cover-up.

Conspiracy and paranoia

A study by NHTSA and NASA couldn’t prove the glitchy electronics theory, but Toyota’s critics still point to the ghost-in-the-machine thesis, especially in the many ongoing lawsuits.

The root cause of the GM’s ignition recall has been pretty clear from the start. But the shifting theories on Toyota’s problems fueled the distrust and customer pandemonium.

After the first Toyota recall in the fall of 2009, owner complaints to NHTSA skyrocketed, peaking at more than 1,400 in the first quarter of 2010. By comparison, complaints averaged fewer than 50 a month from early 2004 through October 2009.

GM is not witnessing the same mushrooming paranoia. That is no doubt because people with faulty airbags know they don’t work after the ultimate test: Failing in a crash.

With unwanted acceleration, the symptoms were mushier -- a “feeling” of surging, pedal misapplication, “unnatural” revving of the engine. A lot was subjective and prone to hype.

Amid the near public panic, things quickly spiraled out of control.

Worldwide reach

It wasn’t long before Toyota was recalling vehicles for all sorts of problems -- in a global recall blitz that made it look as if the company’s quality was coming apart at the seams.

Toyota soon recalled more than 400,000 hybrids, including the Prius, to fix antilock brakes that, to some customers, felt like they were slipping. The callbacks spread to the Sienna minivan, 740,000 of which had to be checked for faulty spare tire carriers. Also on the fix-it list: Sequoia and Lexus GS SUVs for vehicle stability control, Camrys for an oil hose problem, Tacoma and Tundra pickups for propeller shafts and assorted Lexus and Toyota brand sedans and crossovers for brake cylinder and fuel pump problems.

Just to name a few.

Within a year of the first floor mat recalls to address unintended acceleration, Toyota had sent out repair notices on 15.43 million vehicles worldwide. The sheer scale was unprecedented -- as was the global reach: Recalls from Japan to Canada to China to Europe.

GM hasn’t yet devolved into an across-the-board meltdown that envelops other models with other defects. Its recall of 1.6 million vehicles is still largely confined to North America with a few more in Europe. GM recalled another 1.76 million vehicles globally today, most of them in the United States, for unrelated issues, none of which resulted in fatalities.

Dubious distinctions

Then there are the Toyota firsts.

The company had the dubious distinction of having its Japanese president, Akio Toyoda, hauled before Congress to testify about what went wrong.

GM CEO Mary Barra hasn’t come under that microscope yet.

And in 2012, Toyota also agreed to a record fine of $17.4 million for not reporting the floor mat defect in a timely manner. The U.S. Department of Transportation said it was the highest ever for failing to initiate a recall within five business days of finding a problem.

Then, last year, Toyota won approval to pay a settlement, valued at up to $1.6 billion, in a class action filed by people who said the acceleration recalls hurt the value of their vehicles.

Plaintiffs’ lawyers said it was one of the biggest settlements in auto industry history.

Lasting changes

The Toyota recalls also had a regulatory impact: In 2012, NHTSA proposed mandating brake override systems in vehicles to prevent unintended acceleration.

It also pushed a new rule requiring event data recorders in all vehicles. That was an outgrowth of not having a clear picture of what was happening in the Toyota incidents.

Finally, NHTSA proposed new rules for standardized emergency shutdown of cars with push-button ignitions. This was because panicked drivers in runaway Toyotas didn’t know, or weren’t patient enough, to depress the button for the required three seconds.

NHTSA said the button should be held down for just a half-second.

Yet the biggest reason the Toyota recalls were such a crisis was simply because it was Toyota. When recalls happen at GM, a jaded public half expects it. When Toyota, with its then-sterling reputation for bulletproof quality, suddenly became the poster child for deadly product defects, the world took notice. It was a classic fall from grace.

The GM recall is still in its infancy. A lot may still happen, especially if evidence of a cover-up emerges and engulfs GM’s leadership.

But as bad as it may get, it’s hard to imagine GM’s recall becoming Toyota-bad.

You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on Twitter

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