Why it might be OK for GM to mirror Toyota on recall decisions

TOKYO -- On Monday it seemed as though GM’s ignition switch recall wouldn’t plumb the depths of Toyota’s unintended-acceleration debacle back in 2010. Yet mere hours after I wrote an analysis to that effect, GM’s path took an eerily similar turn.

Until then, GM’s recalls hadn’t spread across the company’s lineup to other problems in other vehicles on other continents, as Toyota’s meltdown quickly did four years ago.

GM’s had been contained to the 1.6 million vehicles called back for defective ignition switches that can disable airbags in a crash. Now, however, GM is unraveling much like Toyota did.

And it might actually be a good thing.

CEO Mary Barra set the ball in motion by announcing the recall of another 1.76 million vehicles globally for a trio of unrelated defects. And while the vast majority of the vehicles are in the United States, more than 200,000 are being called back in other countries. Then today Barra also appointed a new global safety czar, Jeff Boyer, with the power to deal with top GM brass and the company’s board.

GM’s widening recall campaign mirrors Toyota’s response.

Toyota’s first batch of recalls aimed to remedy unintended acceleration by addressing floor mat entrapment and sticky accelerator pedals. But over the course of 2010, the recalls suddenly exploded across the board to cover everything from brake cylinders and software glitches to spare tire carriers and fuel pumps.

At the time, it seemed Toyota was imploding. But there was method in the madness.

Toyota President Akio Toyoda, much like Barra, wanted to show that his company was reviewing every quality lapse -- no matter how small -- and going the extra mile to fix them.

The move was meant to build trust. And to show that Toyota was being more serious than ever about problems -- even problems that wouldn’t have raised eyebrows before.

Unleashing the torrent of recalls also helped reform thinking inside the company.

It forced engineers to look at problems from the customer’s point of view.

And more importantly it broke the taboo against issuing a recall in the first place. The culture changed, and recall was no longer a four-letter word. Engineers were less likely to turn a blind eye to glitches and more likely to bite the bullet and call the cars back.

Toyota’s recall avalanche had another counter-intuitive upside.

By announcing one recall after another -- to the tune of staggering 15.43 million vehicles over 12 months -- Toyota was initially the laughingstock of the industry.

But their regularity and size eventually desensitized the public to the recalls. Toyota, which had been knocked off its pedestal of bulletproof quality, was given a pass, of sorts. A recall-weary public eventually conceded, yes, even Toyota is allowed to make recalls.

Now, four years later, Toyota’s reputation seems as strong as it ever was.

Barra’s gambit aims to generate some of the same positive side effects.

“How we handle the recall will be an important test,” Barra said while announcing the new callbacks. “We’re using this opportunity to change much more about our business.”

Her message in its own right is a lesson learned from Toyota. The Japanese carmaker’s president was pilloried for lying low, even as the crisis exploded in scope.

Barra at least got a video message out within a month and a half of GM’s first recall.

If Barra can truly show the new GM has higher standards of quality and change the internal mindset about troubleshooting problems, expanding the recalls may be worth it. Barra agrees: “We will be better because of this tragic situation, if we seize the opportunity.”

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

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