In 2008, Toyota achieved its long-held goal of becoming the No. 1 carmaker in the world, passing General Motors, which had been the world leader since 1931. Shortly after Toyota gained that distinction, global auto sales plunged, leading to a loss for the fiscal year of $4.8 billion, the largest in the company's 72-year history.
In late 2009, Toyota returned to the black. But its reputation for safety and quality — key elements in its success — took a battering. A series of recalls in recent years was capped by announcements in November 2009 and January 2010 that it would recall more than eight million cars globally to resolve a widespread problem with unintended acceleration. Under the recalls, Toyota will shorten gas pedals and in some cases remove padding from the floor to prevent the pedals from getting stuck on floor mats.
The automaker also said in January that it would temporarily stop building and selling eight models in the North American market. On its Web site, Toyota said the years and models affected in the sales suspension were the 2009-2010 RAV4 crossover, the 2009-2010 Corolla, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, the 2010 Highlander, the 2007-2010 Tundra, and the 2008-2010 Sequoia. Toyota said the move was intended to restore confidence in the automaker, and the safety of its products. Of the eight million vehicles recalled, about six million of the vehicles are in the United States.
In early February, days after the automaker said repairs to accelerator pedals would begin, Toyota suffered another blow to its reputation when Japanese authorities told it to investigate reports of faulty brakes on the Prius, a centerpiece of Japan's cutting-edge technology. Approximately 437,000 of its 2010 flagship Prius hybrid and other gas-electric models will be recalled worldwide.
More troubling news emerged on Feb. 21 when a document showed that the automaker estimated it saved $100 million by negotiating with regulators for a limited recall of 2007 Toyota Camry and Lexus ES models for sudden acceleration. The papers were among thousands turned over to the House Committee on Oversight and Government Reform as a result of congressional subpoenas.
The estimate was in a confidential presentation from July 2009 listing legislative and regulatory "wins" for the company. The House committee is one of three panels holding hearings in February on Toyota's safety problems.
Over the years of its rise to the top, Toyota has made no secret of how much it has learned from Detroit. Its first car, the AA, was a blatant copy of (or an homage to) a Chevrolet sedan. Its executives scoured every corner of the Ford Motor Company in the 1950s, taking home ideas to Japan that later inspired the Toyota Production System. The joint venture it launched with General Motors in Fremont, Calif., taught it how to manage American workers, lessons it put to work throughout its factories not only in the United States but in its plants around the world.
Toyota's decades of growth came after, and with, a number of setbacks. After World War II, Toyota resorted to making dinnerware and fish paste before it could get its factories running again. The first car it marketed in the United States, the Toyopet, was such a bomb that it was forced to shut down its dealerships and reopen again two years later. Despite its reputation for building high quality, fuel efficient cars, Toyota took a couple of slaps over the previous decade, when its recalls spiked and it was criticized for building the gigantic, gas-guzzling Tundra pickup truck.
Recalls
Toyota's November 2009 recall was intended to fix a design flaw that could cause the gas pedal to become trapped under the floor mat. It was prompted in part by the crash of a Lexus sedan that ran out of control and crashed into a ravine near San Diego, killing four people. But the automaker and federal safety officials continued to receive reports of unintended acceleration and stuck pedals even in cases where the floor mats had been removed, a stopgap measure recommended by Toyota.
As more details have emerged about the problems, the automaker is facing questions over whether it routinely fixed potentially dangerous defects in new models without recalling those already on the road.
In announcing the second recall, Toyota said the accelerator pedal could wear down and become difficult to depress, slow to spring back or get stuck partly depressed.
The company said its engineers have developed and "rigorously tested" a remedy involving reinforcing the pedal before vehicles leave the factory to eliminate excess friction. On cars and trucks that already have been sold, dealers will perform what Toyota said was an "effective and simple" process that involves installing a steel reinforcement bar into the pedal assembly to reduce the surface tension that could cause it to stick. The automaker said the parts needed were already on the way to dealers and that it had begun training workers how to make the repairs.
The president of Toyota Motor Sales U.S.A., James Lentz insisted that the pedal repairs, along with related modifications, would resolve the problems. In a two-minute video on Toyota's Web site, Mr. Lentz apologized to customers. "I know that we've let you down," he says. He concludes, "I hope you give us a chance to earn back your trust."
The Prius recall was the result of a software glitch leading brakes to fail. The fix, which would be handled by dealers, would take about 40 minutes for each car, the company said.
Separately, Toyota also recalled 7,300 of its latest-model Camrys in the United States to fix a power steering pressure hose in the engine compartment that may be the incorrect length. This could cause a hole in the brake tube and deplete the braking fluid, interfering with braking, Toyota said in a statement.
Company Information
Toyota Motor Corporation (Toyota) primarily conducts business in the automotive industry. Toyota also conducts business in the finance and other industries. It is organized in three segments: automotive operations, financial services operations and all other operations. Toyota's automotive operations include the design, manufacture, assembly and sale of passenger cars, minivans and commercial vehicles, such as trucks and related parts and accessories. Toyota's financial services business consists primarily of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. Toyota's financial services also provide retail leasing through the purchase of lease contracts originated by Toyota dealers. Related to Toyota's automotive operations is its development of intelligent transport systems (ITS). Toyota's all other operations business segment includes the design and manufacture of prefabricated housing and information technology related businesses
In late 2009, Toyota returned to the black. But its reputation for safety and quality — key elements in its success — took a battering. A series of recalls in recent years was capped by announcements in November 2009 and January 2010 that it would recall more than eight million cars globally to resolve a widespread problem with unintended acceleration. Under the recalls, Toyota will shorten gas pedals and in some cases remove padding from the floor to prevent the pedals from getting stuck on floor mats.
The automaker also said in January that it would temporarily stop building and selling eight models in the North American market. On its Web site, Toyota said the years and models affected in the sales suspension were the 2009-2010 RAV4 crossover, the 2009-2010 Corolla, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, the 2010 Highlander, the 2007-2010 Tundra, and the 2008-2010 Sequoia. Toyota said the move was intended to restore confidence in the automaker, and the safety of its products. Of the eight million vehicles recalled, about six million of the vehicles are in the United States.
In early February, days after the automaker said repairs to accelerator pedals would begin, Toyota suffered another blow to its reputation when Japanese authorities told it to investigate reports of faulty brakes on the Prius, a centerpiece of Japan's cutting-edge technology. Approximately 437,000 of its 2010 flagship Prius hybrid and other gas-electric models will be recalled worldwide.
More troubling news emerged on Feb. 21 when a document showed that the automaker estimated it saved $100 million by negotiating with regulators for a limited recall of 2007 Toyota Camry and Lexus ES models for sudden acceleration. The papers were among thousands turned over to the House Committee on Oversight and Government Reform as a result of congressional subpoenas.
The estimate was in a confidential presentation from July 2009 listing legislative and regulatory "wins" for the company. The House committee is one of three panels holding hearings in February on Toyota's safety problems.
Over the years of its rise to the top, Toyota has made no secret of how much it has learned from Detroit. Its first car, the AA, was a blatant copy of (or an homage to) a Chevrolet sedan. Its executives scoured every corner of the Ford Motor Company in the 1950s, taking home ideas to Japan that later inspired the Toyota Production System. The joint venture it launched with General Motors in Fremont, Calif., taught it how to manage American workers, lessons it put to work throughout its factories not only in the United States but in its plants around the world.
Toyota's decades of growth came after, and with, a number of setbacks. After World War II, Toyota resorted to making dinnerware and fish paste before it could get its factories running again. The first car it marketed in the United States, the Toyopet, was such a bomb that it was forced to shut down its dealerships and reopen again two years later. Despite its reputation for building high quality, fuel efficient cars, Toyota took a couple of slaps over the previous decade, when its recalls spiked and it was criticized for building the gigantic, gas-guzzling Tundra pickup truck.
Recalls
Toyota's November 2009 recall was intended to fix a design flaw that could cause the gas pedal to become trapped under the floor mat. It was prompted in part by the crash of a Lexus sedan that ran out of control and crashed into a ravine near San Diego, killing four people. But the automaker and federal safety officials continued to receive reports of unintended acceleration and stuck pedals even in cases where the floor mats had been removed, a stopgap measure recommended by Toyota.
As more details have emerged about the problems, the automaker is facing questions over whether it routinely fixed potentially dangerous defects in new models without recalling those already on the road.
In announcing the second recall, Toyota said the accelerator pedal could wear down and become difficult to depress, slow to spring back or get stuck partly depressed.
The company said its engineers have developed and "rigorously tested" a remedy involving reinforcing the pedal before vehicles leave the factory to eliminate excess friction. On cars and trucks that already have been sold, dealers will perform what Toyota said was an "effective and simple" process that involves installing a steel reinforcement bar into the pedal assembly to reduce the surface tension that could cause it to stick. The automaker said the parts needed were already on the way to dealers and that it had begun training workers how to make the repairs.
The president of Toyota Motor Sales U.S.A., James Lentz insisted that the pedal repairs, along with related modifications, would resolve the problems. In a two-minute video on Toyota's Web site, Mr. Lentz apologized to customers. "I know that we've let you down," he says. He concludes, "I hope you give us a chance to earn back your trust."
The Prius recall was the result of a software glitch leading brakes to fail. The fix, which would be handled by dealers, would take about 40 minutes for each car, the company said.
Separately, Toyota also recalled 7,300 of its latest-model Camrys in the United States to fix a power steering pressure hose in the engine compartment that may be the incorrect length. This could cause a hole in the brake tube and deplete the braking fluid, interfering with braking, Toyota said in a statement.
Company Information
Toyota Motor Corporation (Toyota) primarily conducts business in the automotive industry. Toyota also conducts business in the finance and other industries. It is organized in three segments: automotive operations, financial services operations and all other operations. Toyota's automotive operations include the design, manufacture, assembly and sale of passenger cars, minivans and commercial vehicles, such as trucks and related parts and accessories. Toyota's financial services business consists primarily of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. Toyota's financial services also provide retail leasing through the purchase of lease contracts originated by Toyota dealers. Related to Toyota's automotive operations is its development of intelligent transport systems (ITS). Toyota's all other operations business segment includes the design and manufacture of prefabricated housing and information technology related businesses
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