Back to Basics for Toyota
Opinion-Editorial Article by Akio Toyoda, President, Toyota Motor Corporation
The Wall Street Journal, pg. A19
February 23, 2010
A new 'Smart Pedal' braking system will cut engine power when the accelerator and brake pedals are both engaged.
The past several months have been humbling for all of us at Toyota. We are taking this experience to heart, making fundamental changes in the way our company does business. I can assure you that our response will be comprehensive.
The first step is taking care of vehicles on the road today. But it also means making even safer vehicles in the future—and being more open and transparent about any safety issues that arise.
Since last June, when I took over as president of the company, I have personally placed the highest priority on improving quality, not quantity. All Toyota vehicles bear my name. When cars are damaged, it is as though I am as well. I love cars, and I take the utmost pleasure in offering vehicles that our customers love. I, more than anyone, want Toyota's cars to be safe, and for our customers to feel safe when they drive our vehicles.
When my grandfather brought Toyota into the auto business in 1937, he created a set of principles that has always guided how we operate. We call it the Toyota Way, and its pillars are "respect for people" and "continuous improvement." I believe in these core principles. And I am convinced that the only way for Toyota to emerge stronger from this experience is to adhere more closely to them.
Toyota continues to produce many of the best vehicles in the world. Many of the customers who are bringing their vehicles to our dealers for repair continue to tell us how much they love our cars, and I deeply appreciate their loyalty.
Yet it is clear to me that in recent years we didn't listen as carefully as we should—or respond as quickly as we must—to our customers' concerns. While we investigated malfunctions in good faith, we focused too narrowly on technical issues without taking full account of how our customers use our vehicles.
Since we began selling cars in the United States more than 50 years ago, Toyota has done many things right. We've built a strong organization with nearly 200,000 dedicated team members at our plants, dealers and suppliers. Over the past two decades, we have won more than 700 top quality awards from various independent experts, among the highest of any auto maker. We've also led the industry in the development of hybrids, and we are investing billions in the development of next generation environmentally friendly vehicles.
Still, I recognize that we must do better—much better—in responding to safety issues.
This is why I am taking the company back to basics. Across Toyota, we are putting our customers, and the values on which our company was founded, front and center.
We have already taken a number of concrete steps. Our dealers and team members across America and around the world are making extraordinary efforts to deal with recalled vehicles quickly and conveniently. Toyota engineers have rigorously tested our solutions. And to further validate the safety of our vehicles, we've asked Exponent, a world-class engineering and scientific consulting firm, to conduct a comprehensive, independent analysis of our electronic throttle control system that we will make public when completed.
We are listening more closely to our customers' concerns, gathering information faster, and responding more effectively when there's an issue. In the U.S., we are expanding our field monitoring team and increasing our use of onboard vehicle diagnosis technology. Our commitment to move rapidly is underscored by the speed at which we recently launched recalls to address customer concerns about the Prius and Lexus HS250 antilock brake systems, which we are well on the way to completing.
More broadly, I am personally leading a company-wide effort to institute more stringent quality control. We've begun a top-to-bottom review of our quality control processes from design to production, sales and service. And we are assembling a group of distinguished independent safety experts to confirm that the enhanced quality controls we're putting in place conform to best industry practices.
As an added customer confidence measure, we also will be one of the first full-line vehicle manufacturers to make advanced brake-override systems standard on all of our new models world-wide, and we will include this new feature on an expanded range of existing models as well. This advanced "Smart Pedal" braking system will automatically cut engine power when the brake pedal and the accelerator pedal are pushed simultaneously.
In short, I pledge that Toyota will set a new standard for transparency and speed of response on safety issues. We also will strive to lead on advanced safety and environmental technologies. And I will continue to personally visit our sales and manufacturing workplaces to reaffirm the Toyota commitment to excellent quality.
President Obama has urged all auto makers to act quickly and decisively when problems are identified. I look forward to speaking directly to Congress and the American people tomorrow about the decisive actions Toyota is taking to make things right for our customers by building the safest vehicles in the world.
PREPARED TESTIMONY OF JAMES LENTZ, PRESIDENT AND CHIEF OPERATING OFFICER, TOYOTA MOTOR SALES, U.S.A., INC.
COMMITTEE ON ENERGY AND COMMERCE
FEBRUARY 23, 2010
Chairman Waxman, Subcommittee Chairman Stupak, Ranking Members Barton and Walden, members of the Committee, thank you for inviting me here today. My name is Jim Lentz, and I am the President and Chief Operating Officer of Toyota Motor Sales, USA.
In my testimony, I will address Toyota’s recent recalls and the decisive steps we are taking to restore the trust of the tens of millions of Americans who purchase and drive our vehicles. For two generations, we have provided Americans with cars and trucks that are safe and reliable. And we fully intend to produce even safer, high quality vehicles in the future, even as we pave the way with the next generation hybrid and electric vehicles that our society needs.
In recent months, we have not lived up to the high standards our customers and the public have come to expect from Toyota. Put simply, it has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good faith efforts. The problem has also been compounded by poor communications both within our company and with regulators and consumers. While all auto companies have recalls and all major auto companies have experienced complaints about unintended acceleration, Toyota’s recalls have caused concerns among our customers.
I would like to assure the Committee, and the American people, that nothing matters more to Toyota than the safety and reliability of the vehicles our customers drive. We are committed not only to fixing vehicles on the road and ensuring they are safe, but to making our new vehicles better and even more reliable through strict quality control, enhanced communication and a redoubled focus on putting our customers first.
Our 1,500 dealers are making extraordinary efforts to complete our recalls as quickly and conveniently as possible. Some dealers are staying open 24/7 and they are repairing vehicles at a rate of about 50,000 a day. To date, we have repaired close to a million vehicles.
We have rigorously tested our solutions and are confident that with these repairs, Toyota vehicles will be among the safest on the road today. Our engineers have identified two specific, mechanical causes of unintended acceleration covered by the recalls and we are currently addressing these through the open recalls. One involves floor mats that when loose or improperly fitted can entrap the accelerator pedal. The other concerns accelerator pedals that can, over time, grow “sticky” with wear. The solutions we have developed are both effective and durable.
We are confident that no problems exist with the electronic throttle control system in our vehicles. We have designed our electronic throttle control system with multiple fail-safe mechanisms to shut off or reduce engine power in the event of a system failure. We have done extensive testing of this system and have never found a malfunction that caused unintended acceleration.
Additionally, in December we asked Exponent, a world-class engineering and scientific consulting firm, to conduct a comprehensive, independent analysis of our electronic throttle control system with an unlimited budget. Their interim report confirms that it works as designed. Toyota will make the results of this comprehensive evaluation available to the public when it is completed.
Why did it take so long to get to this point? With respect to pedal entrapment, Toyota conducted investigations of customer complaints which focused too narrowly on technical issues without taking full account of the way customers used our vehicles. And in the case of sticking accelerator pedals, we failed to promptly analyze and respond to information emerging from Europe and in the United States.
We acknowledge these mistakes, we apologize for them and we have learned from them. We now understand that we must think differently when investigating complaints and communicate faster, better and more effectively with our customers and our regulators. Our recent voluntary recalls of certain 2010 Prius and Lexus hybrids and of certain 2010 Tacoma trucks illustrate this new approach.
We are also going further. Our President Akio Toyoda has announced a top-to-bottom review of our operations that he will lead personally, with the support of new Chief Quality Officers for North America and our other principal regions. We will ask independent, outside experts to evaluate the findings to make sure we meet or exceed industry standards.
We are expanding our network of technical offices in the U.S. so we can gather information faster and respond more aggressively to incident reports.
And, we will install advanced brake override systems in all our new models – making us one of the first full-line manufacturers to offer this customer confidence feature as standard equipment. Additionally, we are announcing that we will install this system on an expanded range of vehicles – including the Tacoma, Venza and Sequoia models – that are capable of accepting the new software. We had previously announced that the system would be installed onto the Camry, Avalon and Lexus ES 350, IS 350 and IS 250 models.
These actions underscore that Toyota is going above and beyond making the necessary vehicle modifications and repairs to ensure that our customers can be completely confident in the safety and reliability of the cars and trucks they drive.
Chairman Waxman, Subcommittee Chairman Stupak, Ranking Members Barton and Walden, members of the Committee, these are only some of the steps Toyota is taking to earn back the confidence of Congress and the American people. Our 200,000 team members, dealership employees and suppliers in the United States are the backbone of that effort – and I am confident we will succeed in restoring customer trust in the quality, safety and reliability of our vehicles.
Thank you. I look forward to your questions.
Opinion-Editorial Article from Ed Sheehy, President, Southeast Toyota Distributors
In 1937, Toyota entered the auto market with a simple but powerful principle: to build the highest quality and safest automobiles in the world. Our customers and the reliability of our vehicles have always been our top priorities, which is why there are over 22 million current Toyota owners and 80 percent of all Toyotas sold in the United States over the past 20 years are still on the road today.
The past few weeks have been challenging for Toyota and its dealerships nationwide. We have seen sales drop due to temporary stop sale of eight models while repairs were made and we have struggled with the fluctuating confidence of prospective customers who have been inundated by aggressive media coverage, which has often blurred the facts. However, we believe Toyota's remedies only underline the company's commitment to drivers' safety, and we are proud to support their efforts.
As the president of Southeast Toyota Distributors, the world's largest independent distributor of Toyota and Scion vehicles, I am confident in the products we sell and proud of the impact that Toyota has had in America. Toyota recently hit an exciting milestone - building our 20 millionth North Amercian-produced vehicle. In an annual "American-made" index by Cars.com, the Toyota Camry ranked number one - also in the top 10 were Toyota's Tundra, Sienna and Venza.
The company's total U.S. investment has grown to more than $18 billion and, together with dealers and suppliers, Toyota has helped ceate more than 200,000 jobs in the U.S. Not only has Toyota contributed nearly half a billion dollars to U.S. charitable organizations in the past 20 years, but our local dealers also lend their support in many ways.
Recalls are not unprecedented, and many other car makers are currently experiencing them as well. While the number of vehicles that Toyota has recalled may seem significant, it is worth putting this issue in context.
Confirmed incidents of unintended acceleration are a very small fraction of Toyota's vehicles. The National Highway Traffic Safety Administration's online database indicates that most automotive manufacturers have received numerous consumer compaints of unintended acceleration, including the other four with the largest shares of the U.S. market, and have had to recall vehicles because of this issue.
According to an independent report by Edmunds.com, Toyota still has the fewest complaints of all major automotive manufacturers.
Among the 2.3 million vehicles that were recalled, along with those affected models that were temporarily unable to be sold due to a sticking accelerator pedal, fewer than 20 cases have been confirmed - non of which has resulted in any accident.
While Toyota takes responsibility, we want to remind you that these vehicles were recalled voluntarily because safety and quality are paramount to our company. We believe that the voluntary recall reinforced the Toyota Way - an unwavering commitment to continuous improvement. Toyota is using this time as an opportunity to review all aspects of their vehicles and make them better.
We remain focused on our customers - their safety and satisfaction. All of our dealerships have extended service hours, some operating around the clock with a second shift of technicians, to make sure repairs are as simple and trouble free for customers as possible.
Our loyal customers continue to support us and express their trust in Toyota. We sincerely thank them and promise that we will do everything in our power to show that it is deserved. The silver lining to recent events has been the renewed opportunity to receive feedback on everything we do. The situation has also reinvigorated Toyota's commitment to unwavering quality in products, services and the spirt of "customer first."
Nothing is more important to Toyota than the safety and reliability of the vehicles our customers drive. We have a long history of successful navigating through difficult business cycles and challenging economic climates - proof that we'll be here today and tomorrow to bring our customers the highest level of service that they have come to expect and deserve.
In the coming weeks, Toyota recalls will be the focus of several congressional hearings. As these issues continue to lead in the press, we hope our elected officials realize that Toyota is doing everything it possibly can in a forthright manner. It is important for our country and our recovering economy that all of our auto manufacturers succeed. We ask our representatives in Washington for their unbiased, objective consideration during the hearing process.
Ed Sheehy
President
Southeast Toyota Distributors, LLC
Ed Sheehy is president of Southeast Toyota Distributors, LLC, the world's largest independent distributor of Toyota and Scion vehicles. The company distributes vehicles, parts and accessories to 173 independent Toyota dealers in Florida, Georgia, Alabama, and North and South Carolina.
