Toyota Still Has Internal Problems to Fix, Says Commission

By | May 24, 2011

Toyota Motor Corp. has a way to go to fix crisis decision-making and other shortcomings in its corporate culture that played a key role in last year’s safety debacle, a report by an advisory panel commissioned by the automaker said Monday.

Since recalling millions of cars and trucks mainly over complaints of runaway accelerators, Toyota has appointed a North American director of quality and has taken other steps to overhaul the way it handles safety matters.

But the panel appointed by Toyota to assess its response recommended a more muscular role for its North American leadership and a stronger communications effort across its global operations regarding vehicle safety.

“When everyone is responsible, no one is accountable,” panel member Brian O’Neill said of the group’s finding that decision-making,” by committee can be inefficient and time-consuming.

The report did not shed any new light on issues behind the massive, accelerator-related recalls in 2009 and 2010 that engulfed the company and hammered its reputation for quality.

U.S. investigators with the National Highway Traffic Safety Administration and Toyota blamed equipment and mechanical problems for the recalls.

Although safety investigators ruled out any problem with Toyota electronic throttles, safety advocates continue to press that issue. It remains under review by a U.S.-based scientific panel that is expected to release its findings this summer.

The North American Quality Advisory Panel approved by Toyota senior management and led by former U.S. Transportation Secretary Rodney Slater found that the Japanese automaker can be overly sensitive to outside criticism and reluctant to blame itself for any problems when it believes its way is correct.

Moreover, a code of respect for people and continuous improvement that is rooted in Japanese culture and applied rigorously in Toyota’s envied manufacturing process is not found in other areas of the business.

This “unhelpfully narrow” attitude, the panel said, leaves Toyota vulnerable to errors in judgment that can compound problems, like the full and timely disclosure about the nature of potential safety defects.

“Toyota’s reputation in North America increasingly will be based as much on the quality of its decision making as on the quality of its vehicles,” according to the panel comprised of engineers, academics, corporate, safety and legal experts.

Toyota President Akio Toyoda said in a statement that Toyota has “learned a great deal” from the panel and credited its “valuable counsel”.

Toyota’s North American Chief Quality Officer Steve St. Angelo said: “We told them to be straightforward with us,” and he appreciates the recommendation to do more.

“I’ve told them we intend to do just that,” St. Angelo said.

Toyota in April appointed a companywide chief safety technology officer to enhance accountability and communication, a step noted positively by the panel. This job, the panel recommends, should have authority to determine safety performance for new designs and models.

Jeremy Anwyl, chief executive of automotive research service Edmunds.com, said the report made a “pretty good case” that Toyota had let quality lapse.

“Also, it confirms our view that Toyota’s culture — one that works well in times of stability — left it uniquely vulnerable to a fast-moving crisis,” Anwyl said.

The report was issued at the halfway point of the panel’s two-year charter.

(Additional reporting by Ben Klayman, editing by Gerald E. McCormick)

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