Toyota's Problems: 8.5 Million and Counting

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I don't see Toyota as an infallible company that never makes mistakes.
-- Akio Toyoda, president of Toyota, Tuesday

Yeah, no kidding, huh?

Setting aside the violation of the first rule of recall announcements (make 'em on Friday afternoon so that articles like this one run on Saturday morning when nobody's paying attention), this morning's announcement that a Prius recall will be added to Toyota's (NYSE: TM  ) mounting pile of woes was not at all a mistake.

In fact, in a backhanded sort of way, it counts as a good move.

Sure, the news that Toyota's iconic hybrid models have a software glitch that can cause a delay in braking under certain conditions isn't exactly welcome, and the timing of this recall -- on top of all of Toyota's other woes, and adding up to 8.5 million vehicles recalled so far -- is far from ideal.

But at least they're owning up to this one in semiprompt fashion.

Are they finally getting a clue?
Look, recalls are a fact of life in the auto business. As anyone who has ever worked on a complex product of any kind knows, no matter how much testing you do or how good your engineers are, every now and then a flaw only shows up after a product is in production.

This happens to every company -- even brilliant ones like Apple (Nasdaq: AAPL  ) , which is currently struggling with problems on its big (and expensive) 27-inch iMac's display. Of course, when it happens with a car, it can be a major safety issue. That's why the recall system exists, and most every consumer-products company gets hit with one once in a while.

Recently, Johnson & Johnson (NYSE: JNJ  ) , Procter & Gamble (NYSE: PG  ) , and Whole Foods Market (Nasdaq: WFMI  ) , which recalled some hazelnuts back in December, got hit, among many others.

It's one thing to be discreet when a recall is required -- that Friday afternoon business really is what most companies seem to do. But for years, Toyota wasn't discreet; they were in denial. From engine sludge problems (way back in 2002) that they tried to blame on drivers, to the unintended-acceleration mess, which they blamed variously on drivers and on loose floor mats until recently, Toyota has given the impression of a company that isn't willing to be forthcoming -- or to take action -- about safety issues with its products.

That impression is starting to build steam in the public mind. And competitors are already responding.

Nice lunch. Mind if we eat it?
They don't call the auto business "cutthroat" for no reason. Ford (NYSE: F  ) and General Motors are already looking to feast on Toyota's woes with sales campaigns that give discounts to buyers trading in a Toyota. Ford's campaign includes discounts for Honda (NYSE: HMC  ) vehicles, too For its part, Honda is starting to worry that Toyota's problems could dampen the U.S. market's enthusiasm for its products as well. January's sales numbers certainly weren't good news for Toyota, but whether that was a blip or the start of a major market-share realignment remains to be seen.

Meanwhile, even if Toyota is finally (finally!) changing its ways, this PR disaster is still far from over. It's a variation of the Chicken Little problem; deny the sky is falling for long enough, and nobody will believe you when you say it finally fell. If the unintended-acceleration problem wasn't due to the floor mats, as you claimed last year, why should we believe that it was due to a gas pedal part, as you claimed last week?

Why shouldn't we believe that it's a software problem, for instance?

That's the question a lot of folks are asking. And those folks include Congress, who will be holding the first of several public hearings on the issue later this month. I expect that to be an uncomfortable session for the star witness, Toyota North America CEO Yoshimi Inaba, as House members in high dudgeon look to score points against a company that seems to be edging closer and closer to a huge backlash.

How bad will all this get? Stay tuned.

Fool contributor John Rosevear owns shares of Ford and Apple.  Apple, Ford, and Whole Foods Market are Motley Fool Stock Advisor choices. Johnson & Johnson and Procter & Gamble are Motley Fool Income Investor recommendations. Motley Fool Options has recommended a buy calls position on Johnson & Johnson. The Fool owns shares of Procter & Gamble. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.

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  • Report this Comment On February 09, 2010, at 2:18 PM, pondee619 wrote:

    Seems like a Dylan song, The first one now will later be last. Toyota turns into Ford? Remember the Pinto.

    Ford turns into Toyota?

  • Report this Comment On February 09, 2010, at 2:18 PM, pondee619 wrote:

  • Report this Comment On February 09, 2010, at 2:50 PM, TMFMarlowe wrote:

    I joked the other day that I can't type fast enough to keep up with all the new bad news on Toyota... apparently I really can't. The Washington Post just posted a report that NHTSA is looking into complaints with the steering -- sudden veering left or right at highway speeds -- on 2009-2010 Corollas. Not. Good.

    Link here for those interested:

    John Rosevear

  • Report this Comment On February 09, 2010, at 3:31 PM, JulesCz wrote:

    Now it's time to buy AMERICAN products! Goodbye to Toyota not a trusted name anymore. Reputation will hurt them for years to come.

  • Report this Comment On February 09, 2010, at 4:41 PM, Nvrweakly wrote:

    I've never seen such vicious and predatory advertising on the part of American carmakers to drive fears of Toyotas. I guess it's payback for two decades of getting their asses kicked in the quality and reliability departments. I sure don't remember Toyota or Honda advertising special trade-in incentives if you brought in your exploding Pinto.

  • Report this Comment On February 09, 2010, at 4:44 PM, bzw51 wrote:

    Hi Jules Cz,

    Those recalled Camrey's, build in Kentucky with American Supplier Parts by American Workers. You sure the Ford or GM your buying isn't made in Mexico? NAFTA does not make a product American.

  • Report this Comment On February 09, 2010, at 4:49 PM, CarryOnAgain wrote:

    This is not just a huge problem for Toyota - it is a huge problem for Japan. Manufacturing makes up about 28% of GDP and Toyota is the single largest Japanese company, with an annual revenue of about $200b. You can imagine the effect this can have on the Japanese company if Toyota's prestige is seriously damaged.

    In a wider sense, Japan is suffering from the rise in manufacturing prowess of it's Asian neighbours. South Korea in particular manufactures high quality consumer goods and China might not be far behind. For an economy so dependent on manufacturing, the future does not look rosy.

  • Report this Comment On February 09, 2010, at 5:14 PM, kybillhilly wrote:

    For the first time.... I bought shares in Toyota yesterday.

  • Report this Comment On February 09, 2010, at 5:25 PM, WyattJunker wrote:

    Toyota could very well be a buy.

    The fix for the brake problem was a tiny square piece of metal about the size of a postage stamp. I think they glue it on. Takes 10 seconds to fix. Take the 8.5 million cars, multiply by 10 seconds. Translate that into labor cost and cost of glue and you have your fixed loss cost minus the PR hassle of course which was really just a slow news day.

    Tylenol had harder problems than this in the 80's. It led to the hermetically sealed lid. They bounced back. Toyota will also.

    Use this weakness to investigate TM for a long.

  • Report this Comment On February 09, 2010, at 5:37 PM, Superdrol wrote:

    I don't know if Toyota was actually aware to the extent of their problems (I'm sure they were, those are their cars), but the way that the problem has been handled has been evasive and in poor taste.

    Toyota forgot the 'Toyota Way' and, IMO, the quality of their cars has declined throughout the years compared to their earlier models. They seem to have rested on their laurels after going toe to toe with General Motors for so long.

    Toyota for awhile has gone toe to toe with all of General Motors's cars putting out truck for truck, etc....focusing on numbers, growth, and everything else but quality.

    My Corolla that I bought in 2007 has a few quirks that I complained about well before these recent issues. I've regretted buying the Corolla instead of the Civic. The Corolla was cheaper at the time (damn).

    In my opinion, I think Honda has the best product out of all the automakers. I worked at Honda in Ohio for awhile, but even if I did not, I'd still make the same statement regardless.

  • Report this Comment On February 09, 2010, at 5:39 PM, CMFgdf wrote:

    "Why shouldn't we believe that [the gas pedal problem is] a software problem, for instance?"

    A common answer to this is going to be, "but, the NHTSA signed off on the repair." And it points up a misconception in the process, which is that NHTSA is somehow involved in solving the problem and proposing a fix. What they actually did is agree to let Toyota use the shim as the fix - it's up to Toyota to have identified the problem correctly and designed the right fix.

  • Report this Comment On February 09, 2010, at 5:39 PM, LACEYLEE wrote:


  • Report this Comment On February 09, 2010, at 5:44 PM, Superdrol wrote:

    Also the American automakers have been quite vicious in their approach towards Toyotas recent woes. Nevermind the fact that both Chrysler/GM are both on life support from the Government and went BANKRUPT. The American automakers are lucky to have stayed in business as long as they did running their companies so poorly. It was a gift basically.

    What's happening now is like a high school drop out making fun of a Havard student for getting a 'D' on an exam. Shameless and pathetic really.

    What's happening now is just sour grapes for the Big 3 which I don't support by any means. Just trying to exploit through racially motivated underlying implications trying to make anything.

  • Report this Comment On February 09, 2010, at 6:01 PM, Milligram46 wrote:

    If I were king:

    1) Delay the Lexus supercar. The press is going to be ALL OVER Toyota if they launch this thing under this backdrop. Right or wrong, it will be a PR nightmare and very risky to ending up as the butt of the joke on late night television.

    2) PR blitz with executives from Japan who went to college in America, and worked in the US sub (so they understand the US market. I mean hardcore Oprah, Tyra, Jon Stewart, etc. etc. etc. PR blitz. Your brightest and your best, and them completely prepared to answer the questions honestly, and without spin (as much as they can without exposing future liability).

    3) Kill the FJ Cruiser, Venza and Matrix when their current product cycles end. These are vehicles asking questions no one asked, and there is too much segmentation as it is.

    4) Kill the Land Cruiser. At $74K sticker price this and unit sales of 200 a month, this is also a resource suck. If people want one that bad they can spend $2K more and buy the Lexus version (yes, Toyota has the GMC/Cadillac SUV pricing issue also - however the Toyota quality is far below the Lexus for the money). Again, too much segmentation, and what is the Land Cruiser competing against??? Bueller? Bueller? Bueller?

    5) Don't launch the coming Subaru-Toyota rear-wheel drive Hyundai Genesis competitor sports car under the Toyota nameplate. The Scion tC is completely outdated and desperately needs a face lift. Scion sales are in the tank, and the blue hair set is keeping the brand on life support with their affinity to the xB. This new car would breathe life into the nameplate and not add an 18th vehicle to the Toyota segment - ACK!

    6) GET BACK TO BASICS. Hooray, we're bigger than General Motors!!! What have we learned? Well to get there you need to squeeze your suppliers by 30%. Momma, always said, you get what you pay for. GET BACK TO BASICS. Just as General Motors inserted an extra $100 into the Chevrolet Malibu budget, on Lutz's insistence to have an interior that people would actually like (and the Malibu is now considered top dog in its class for interior quality) Toyota has been stripping out $100 here, $200 there to be more competitive. I get it, they are in business to make a profit, but they've cut too deep. And it shows in the reviews, the feedback, and the complaints. Improve product quality now, in the current product cycles. Reinvest the money in quality parts and assembly.

    7) To acheive six that means, light casualites are going to have to be acceptable. Will some customers defect to Hyundai or Kia on price, well sure long term they will. But is that where Toyota wants to compete? On price?!? If that is the direction they are going it is a failed strategy. Ask Chrysler, Ford and GM how it all worked out for them. This goes back to six, stick to the basics, and the customers will come back.

    8) Have senior management take a long hard look at the two key global amrkets that Toyota doesn't get. China and the United States. They use to get the United States, I don't know if they understand China. China is the future, the United States is vital to the bottom line. Senior management really didn't understand the public and media reaction, it shows, they need an education.

    9) Make a broader commitment to being green. The 4.7L and 5.7L Toyota V8 engines get poor fuel economy when stacked up against their American peers. Come on, we all know Toyota knows better. They need to do more across their product line - this goes a long way to building goodwill with youthful buyers.

    10) Pull a David Letterman, not a Tiger Woods. Its time to come clean, about everything. Even when the truth is painful, damaging, and expensive, the truth can set you free. If you really don't know, come out and say, "we're flummoxed, we don't know," if you do know and the truth hurts, just come out with it. Toyota has the money to weather the storm and deal with the backlash. If there is some deep level core electronics issue and they are dragging their feet, and it gets discovered by the media, or in Congressional hearings, that is damage that will take decades to fix. Come clean about ALL of it. The faster that is done, the faster you get ahead of the story.

    11) Get someone who has more credibility than Toyota, that people trust, to cetify the findings and go public with it. Toyota now has a serious trust issue, and the NHTSA credibility is called into question on both sides of the arguement. It appears on one side the NHTSA didn't do enough, and on the other there is a conflict of interest seeing how the government owns GM and Chrysler. Some ONE or some organization needs to rescue the PR battle. Work with the IIHS? They have a ton of credibility. No idea if they would work with Toyota or not.

    I see these as eleven critical things they need to do, and they need to do now. Otherwise this only gets worse.

  • Report this Comment On February 09, 2010, at 6:04 PM, Milligram46 wrote:


  • Report this Comment On February 09, 2010, at 6:20 PM, SugarLandMike wrote:

    What a bunch of baloney. Toyota's maintenance issues are minuscule compared to the junkers that Detroit's overpaid union slugs have been slapping together haphazardly all these years. I drive a 2005 4Runner, and was absolutely shocked when the check engine light came on recently. Engine problem? My Toyota? No way! It turns out the service technician had not properly reset the meter for my next scheduled maintenance. Oh, I did get a flat tire once. Surprised THAT didn't make Headline News.

  • Report this Comment On February 09, 2010, at 6:32 PM, SugarLandMike wrote:

    What a bunch of baloney. Toyota's maintenance issues are minuscule compared to the junkers that Detroit's overpaid union slugs have been slapping together haphazardly all these years. I drive a 2005 4Runner, and was absolutely shocked when the check engine light came on recently. Engine problem? My Toyota? No way! It turns out the service technician had not properly reset the meter for my next scheduled maintenance. Oh, I did get a flat tire once. Surprised THAT didn't make Headline News.

  • Report this Comment On February 09, 2010, at 6:34 PM, wj0822 wrote:

    In 1995, I bought one of the first Tacomas. I still have it. At 65K miles, the starter failed. Last year the ignition switch wore out. That is the entire mechanical failure history. About 2 years ago I got a letter from Toyota saying my frame might be prematurely rusting and I should have it checked. If found to be true, the company offered to purchase my truck for 150% of its full "excellent" condition retail value. To my dismay, my truck checked out OK, so I guess I'll be driving it another 14 years. The point is: they don't make American companies with attitudes like this. Toyota will be back with a vengence, this is just a bump in the road. I'd buy another one tomorrow, if I needed one. So will every other Toyota owner that make his own decisions, versus what the other lemmings are doing.

  • Report this Comment On February 09, 2010, at 6:51 PM, Milligram46 wrote:

    Nope SugarLandMike not Toyota - and yet ANOTHER recall announced just a few minutes ago.

    Now its the 2010 Camry - for brakes.

  • Report this Comment On February 09, 2010, at 7:02 PM, Bonefish100 wrote:

    Are you anti-Toyota folks aware of the CURRENT recall of American made cars for various safety related issues? Toyota is getting a lot of press, but the recall of America's "Big Three" is such a common event that it is scarcely noted in the press. I suggest you take a close look at the other recalls for other vehicles that are currently going on...and that includes Honda.

  • Report this Comment On February 09, 2010, at 7:03 PM, langco1 wrote:

    the end cost of toyota's recalls will reach into the billions forcing the carmaker to drastically raise its prices and most likely file for bankruptcy.

  • Report this Comment On February 09, 2010, at 7:10 PM, TMFMarlowe wrote:

    Toyota's not getting press for recalls as much as they're getting press for playing dumb about problems they've known about for years. Most of the other car companies have (we hope) learned not to do that.

    Thanks for reading.

    John Rosevear

  • Report this Comment On February 09, 2010, at 7:20 PM, Milligram46 wrote:

    It has been very comical, in a sad way, to watch how the feverish Toyota supporters have responded to this, it is like the stages of grief.

    Dismay, quickly replaced by anger. Its unfair, its the MEDIA'S fault. What a crock - the media - which continues to savage any domestic automaker not called Ford. The same media that called out Honda for their flaming window switch of death recall. THAT media. The same media that has been in the tank for Asian manufacturers for three decades. Why yes, Toyota is so upset they pulled advertising from ABC because, gasp, ABC is reporting a news story.

    Then comes denial. Its not MY car. Not MY Toyota. Can't be. These problems are well documented, systemtic, and were so obviously coming three years ago. There is a huge paper trail to suport it.

    You are 100% correct that the media story has taken a life of its own but that is 100% Toyota's fault. They ignored, buried, lied, and avoided these issues for a decade, slashed costs while ignoring quality, and lost touch with their core values and markets. Now it has all blown up but instead of managing the story, they are now letting the story manage them.

    To put things in perspective, global recall numbers as I type this are at 9 million. The number could swell to over 10 million if there is a Corolla recall for bad steering, which seems almost certain to happen at this point. This is getting into Ford flaming cruise control switch of death land. All combined Toyota has almost 3,000 NHTSA complaints for all issues on all recalled vehicles. That is almost 3X the number of complaints on the Ford flaming cruise control switch of death on file, and with 65% of the vehicles. That is a big issue that can't be ignored.

    Toyota is to blame for their own media woes - not the media - and to blame it as Toyota bashing and/or the media boogey man out to get them is competely ignoring how a great company can shoot themselves in the foot (over and over again it appears) after they walk away from core values.

    Toyota can shine again - but Toyota has spent the last decade blaming customers, suppliers, vendors, and dealer service. They need to look inward. If they continue down this path long term - well - we all know where it leads.

    To the REAL question of do you buy Toyota as its face down in the mud right now - I don't think the time is quite there yet to catch the falling knife. The bad news has clearly not sorted itself out. In just 12 hours today two more recalls and an investigation. There is s till a lot of drag on TM - and I don't see it roaring up 20% in a couple of days if all of sudden this goes away.

  • Report this Comment On February 09, 2010, at 7:31 PM, Midas5280 wrote:

    Ford and GM have had many recalls and I certainly don't remember every radio, television, and newspaper drenching the public with every minute detail. How objective can the media be when we the government own GM? GM and the UAW have an agenda that is being played out and I for one am not buying into it I will continue to drive and buy the Toyota brand not only because of its durability and quality, but because of this classless assault on the brand, the Japanese people, and American workers employed by Toyota. The Japanese still have humility, shame and honor. Toyota has always responded to safety needs and will continue to do so. This story is so overblown, gushes of hot air are reaching the west coast from DC. When all is said and done with this recall, the UAW will be exposed as being a main player in the media blitz with Obama and Co. in tow.

  • Report this Comment On February 09, 2010, at 7:49 PM, Superdrol wrote:

    I came up with this short pop quiz:

    Question: Which company did not go bankrupt and recieve a Government bailout ?

    A) Chrysler

    B) General Motors

    C) Toyota

  • Report this Comment On February 09, 2010, at 8:03 PM, Milligram46 wrote:

    Ya, the media is out to get Toyota. That's why the Honda airbag recall is in the news today:

  • Report this Comment On February 09, 2010, at 8:04 PM, Milligram46 wrote:

    Ya, Toyota only took emergency government loans from the Japanese government to prop up their floor financing arm in the fall of 2009.

    Next half-truth please.

  • Report this Comment On February 09, 2010, at 8:25 PM, Milligram46 wrote:

    A fabulous must read on MSNBC. Just the facts, lots of cited sources, quotes from officials in the government, the industry and Toyota itself. A very clear explanation of how things got to where they are.

    I don't care where you fall on the issue - it is a fabulous read.

  • Report this Comment On February 09, 2010, at 8:31 PM, baldheadeddork wrote:

    @ kybillhilly - Hope you caught the right end of that falling knife.

  • Report this Comment On February 09, 2010, at 8:37 PM, baldheadeddork wrote:

    I've brought this up in a couple of posts on Toyota, but I haven't gotten a reply so I'll ask again:

    Even if the recall stuff never happened, wasn't this a ridiculously overpriced stock? Before the recall Toyota had a market cap over three times greater than Nissan, Ford, Daimler, and Volkswagen, and more than twice as large as Honda. Their dividend is unimpressive and it's been reduced in the preceding four consecutive periods. And Toyota downgraded their profit forecasts for the rest of 2010 FY2011 in December because of the strength of the yen relative to the dollar and euro.

    Forget the recall if you can, what the hell made this stock worth $80 even before everything blew up?

  • Report this Comment On February 09, 2010, at 9:16 PM, cordwood wrote:

    Murphys' Law rules . Once a situation is presented, the "movers and shakers" will grab and expand it to a hysterical extreme if it benefits them.

    As an investor keep a cool head !!

  • Report this Comment On February 09, 2010, at 10:44 PM, ease1 wrote:

    Toyota has yet to experience all of the fun things a major recall entails. Just wait until the lawsuits start pouring in; claiming just about anything they can related to incidents in their cars.

    Toyota's arn't that bad really, if you need something cheap to get you around from here to there.

    And I don't blame the american autos for taking advantage really.

  • Report this Comment On February 10, 2010, at 6:38 AM, TMFMarlowe wrote:

    ease1, the lawsuits are coming. I've heard of several class action cases being prepared. Sometimes these things don't get much media attention... but sometimes they do. I bet we'll hear more in a month or two.

    Thanks for reading.

    John Rosevear

  • Report this Comment On February 10, 2010, at 6:40 AM, TMFMarlowe wrote:

    Milligram46, thanks for the pointer to the MSN article. The WSJ has a good one this morning too, titled "Secretive Culture Led Toyota Astray". Yep, sure did:

    John Rosevear

  • Report this Comment On February 10, 2010, at 10:05 AM, TMFKris wrote:

    Oh good, Congress needs something else to hold hearings about. Anecdotes, sound bites, and speeches.

  • Report this Comment On February 10, 2010, at 10:14 AM, ChannelDunlap wrote:

    I bought TM about a week ago @ $73. It has outperformed the S&P everyday since. Clearly not everyone thinks this is the end of Toyota.

  • Report this Comment On February 10, 2010, at 11:12 AM, Superdrol wrote:

    This is an early gift to General Motors, Ford, and Chrysler. Lord knows this massive recall is the only saving grace for those companies to even breakeven.

    This recall also will not change the fact that General Motors and Chrysler owe the US Government money and they went bankrupt.

    This will not be the 'end' of Toyota. The media and people and general always blow things out of proportion and exaggerate excessively.

    If the Big 3 could produce garbage since their inception, one small blip on Toyota and Honda's radar is nothing.

  • Report this Comment On February 10, 2010, at 12:17 PM, madinga wrote:

    Sitting on 20 billion or so in $ + short term hysteria on recall + short term bashing the top dog = buy on weakness!

  • Report this Comment On February 10, 2010, at 1:31 PM, Entertainme wrote:

    I wonder how many of Toyota's problems are due to American made parts.

  • Report this Comment On February 10, 2010, at 3:55 PM, JustMee01 wrote:


    The company being blamed for the major segment of current recalls, hasn't even been a supplier of Toyota's for very long. The issues extend much further back than the suppliers can be blamed for.

    And the Prius-- the latest recall-- is made in Japan, not in the US.

  • Report this Comment On February 10, 2010, at 3:59 PM, JustMee01 wrote:

    @ Midas:

    "Ford and GM have had many recalls and I certainly don't remember every radio, television, and newspaper drenching the public with every minute detail."

    You gotta be kidding me. Ford was persecuted for the Explorer roll-overs for half a decade.

    The press is all over any fresh blood they smell. Any suggestion that they're all over Toyota, because they're Totota is ridiculous. They're all over anybody that mishandles a PR situation and opens up the potential to make loads and loads of easy copy that people are interested in reading...

  • Report this Comment On February 10, 2010, at 4:16 PM, prizza wrote:

    Toyota is reaping what it has sowed. They are an arrogant and unscrupulous company who paid for the quality reputation they had.

    This is how they obtained their repution:

    They manipulate the media.

    They pulled all of their marketing from ABC News because ABC had the gall to run stories highlighting actual incidents involving the recall.

    They bought influence in NHTSA when they hired executive members of the agency to be their facilitators in dealing with the agency. That is how they subverted 2 recalls involving the acceration problem.

    They controlled Consumers Report. The magazine provided Toyota with buy ratings when they didn't even evaluate the vehicles.

    Most damning of all is their former legal counsel exposing them of withholding evidence in their product liability trials!

    Toyota is a dirty company and now that the spotlight is on them, all of their unscrupulous actions are coming to light.

  • Report this Comment On February 10, 2010, at 4:30 PM, ET69 wrote:

    Boy so much emotional road rage here! You'd think we were discussing someones wife! I just sort of think that ALL the car companies put out a good product these days. The competition is just too tough otherwise to stay in business. I also think a lot of people are living in the past as regards quality assessment. If you are talking about what a car company did 20 years ago then you really are out of touch with what these companies are doing now!

    Lastly, since I think all the car companies put out comprable products as regards quality I plan to buy my next car based solely on style. So for me personally its going to be a Chrysler 300.

  • Report this Comment On February 10, 2010, at 5:08 PM, madinga wrote:

    Even Ford and Gm know that Toyota have a higher resale price (better product)...

    Ford (NYSE: F) and General Motors are already looking to feast on Toyota's woes with sales campaigns that give discounts to buyers trading in a Toyota.

  • Report this Comment On February 10, 2010, at 6:49 PM, Milligram46 wrote:

    I really don't care to get into sectarian violence on whether Toyota products are good or not. But if you're thinking this is going to go away quickly, or that Toyota has the fix in with blaming CTS for the gas pedal assembly, think again.

    The LA Times, which has been investigating Toyota since 2007, did a deep analysis of the fatality crash data, and then matching up the vehicles to see if they had the CTS pedal or not.

    Of the 18 fatalities they reviewed, blamed by NHTSA investigation on uninteded acceleration, know how many cars had the CTS pedal assembly?


    Of the 18 fatalities, know how many are involved with the recall cars getting new gas pedals?


    As a matter of fact, the only car they could come up with that could even be remotely involved was a 2008 Toyota Camry hybrid, but that is a "J" car built in Japan.

    If you're thinking TM is a buy and this CTS pedal fix is the true fix - think again. Toyota still hasn't come clean to the real issue.

    I strongly suggest you read the story of Kevin Haggerty, and his 2007 Toyota Avalon (not part of the recall and no CTS pedal).

    The story here is not that he got a free Hyundai in a PR stunt to make Toyota look bad - so don't focus on that. The real eye opener here is this:

    1) His car was accelerating out of control. He was able to solve this by shifting to neutral.

    2) He called his dealer, his dealer told him to, "bring the car in?"

    3) By riding his brakes and shifting back and forth from neutral to drive, he drove his Avalon to the dealer. He arrived with the engine and brakes smoking from an overheat condition, and the engine stuck at redline in neutral - DEALER VERIFIED.

    4) Dealer couldn't not find why car was doing it. They contacted Toyota manufacturing rep, and here is the damning part...

    5) Toyota told the dealer to replace the gas pedal, THE ETC ASSEMBLY (which experts have been saying is the problem), and all related electronic throttle sensors. Again, this car did not have a CTS pedal and is not part of the current recall.

    6) Replacement solved the problem, but replaced out of courtesy, not as a "fix," per say.

    This is the biggest single piece of evidence out there that the problem is not pedal related, not CTS fault, and is a serious computer based problem that is complex in nature. Why would Toyota have a car like this available to them, KNOW ABOUT IT, and not immediately offer to take the car, bring it to their proving grounds in Arizona and tear it apart to understand, "why."

    So what's the point of all of this?

    There is a mountain of evidence that Toyota has not fully come clean on this situation. Short term gains in buying TM - sure - but there is huge associated risk, especially when you review the accident data that proves out, CTS pedal don't have anything to do with it at all. So where in lies the real problem???

    There are three possibilities:

    1) Toyota engineering is incompetent, and believes the CTS pedal solves the problem

    2) Toyota doesn't know what the real problem is, and this is buying time

    3) Toyota knows, but it is so expensive and potentially damaging their management structure is still playing Fight Club with their customer's lives

    None of these are good options.

    Again - I'm not interested in hyperbole and thin defenses - there is a huge mound of evidence that points pretty clearly, the fix isn't in - and that makes the stock a very risky investment.

  • Report this Comment On February 11, 2010, at 7:02 AM, TMFMarlowe wrote:

    madinga: Higher resale price doesn't mean a "better product", it means that it is perceived as a better product. The difference is really important to grasp -- whether or not their product really is "better", that perception is the key to their success in the US, and that perception is taking a lot of damage right now.

    That's the issue.

    Thanks for reading.

    John Rosevear

  • Report this Comment On February 11, 2010, at 8:17 AM, ecoloney wrote:

    I had a POS Toyota back in the early '80s and learned a lesson not to buy another one.

    Face it, their **MARKETING** is superior to most everyone else's, not their product.

  • Report this Comment On February 11, 2010, at 2:22 PM, Superdrol wrote:

    This recall is an early Christmas gift to the Big 3. They can't sell their product any other legitimate way.

  • Report this Comment On February 12, 2010, at 11:02 AM, BioBat wrote:

    If it was just a big American media conspiracy to prop up the US auto industry, the Japanese media would not be following suit investigating problems with Toyota like they are.

  • Report this Comment On February 12, 2010, at 11:06 AM, BioBat wrote:

    TMFMarlowe is right. High resale value has nothing to do with being a better product.It has to do with demand, which can come from the perception that a car is better.

    Go look at reviews from Edmunds, Consumer Reports, Road and Track, Motor Trend, or KBB and you'll see Toyota's aren't really head and shoulders above anyone anymore. They're still good cars but they may no longer be worth the import premium people used to be willing to pay for them.

  • Report this Comment On February 12, 2010, at 11:59 AM, gszesz wrote:

    I'm a loyal Honda driver and this won't affect my affinity for Honda vehicles. It does affect my image of Toyota. I have never owned one, but came close on many occasions.

    Toyota obviously does not put the customer/consumer first. I'm not saying any other automaker does, but hiding these problems has cost lives and they need to pay dearly for their oversights. It will be a long time before I would even consider purchasing one of their vehicles. Unfortunately for US automakers, something like this only makes the playing field even given the US automakers penchant for continuing to churn out unreliable cars/trucks. Ford seems to be making a turnaround and I hope it continues. The new Taurus is one I will consider for my next car.

  • Report this Comment On February 12, 2010, at 12:36 PM, mudman90039 wrote:

    I owned a 2004 Ford Focus, it was designed in Europe, it handled very well and never had a mechanical problem. I sold it to my best friend who watches all cars and said the Focus was the only small car he didn't get car sick in. The Asian cars are all softly sprung and don't give road feedback. He'd had 2 Alfa Romeros and said the Focus has been as good in engine and handling and superior in AC, and electrics.

    He watches Top Gear on BBC America and I"ve seen them on the internet. The Focus is their pick for reliability and handling. My current 09 Focus averages 31 MPG. The Fusion is also getting great marks on reliability and has a Hybrid if that's what you want. Sync is very hot and getting a GPS later this year.

    One friend slammed me for Ford factories in other countries. This helps Mexico keep jobs in their country instead of them all flooding over here.Why are you so snide and prejudiced about Mexicans? they do work very hard, that's why construction jobs have gone to them.

    Ford is an international company with factories in Asia and India being built, and we're helping our neighbors. Ford is also finishing new factories with the latest equipment in America to recreate jobs here. So don't think the Pinto is Ford's standard, that was 40 F-ing years ago. Ford has been doing research and getting patents for decades that will put it ahead again. I bought a 1000 shares at average of $2.50, it's now at $11, I'm laughing at you nay sayers. GM is the one that was ignorant of the future

    I still see old Ford trucks/cars from my college years. Recently spotted an original Shelby Cobra tooling down the freeway and looking very hot, I wish I had that for a fun car. Very lucky young guy having fun in a classic.

  • Report this Comment On February 12, 2010, at 2:48 PM, saldamico wrote:

    Now that Toyota is under the microscope, I anticipate problems arising in large numbers. If you look hard enough, you can find a glitch in any car, except now, people will be looking at toyota cars hard enough.

    I wonder if this could be a gift of sorts to the American car industry that would allow them to turn around the way harley-davidson did in the 80s after it suffered a huge blow from foreign competition and prior poor production.

    we're allowed to make mistakes, as long as we learn from those mistakes going forward.

  • Report this Comment On February 12, 2010, at 2:53 PM, terrylengle wrote:

    Since the 80's I have always owned a used Toyota. My husband who was born and bred servicing GM products switched to working on Toyotas and has always said, the Toyota is engineered to perform up to and over 300,000 miles per vehicle. Because we were not able to afford a new Toyota we always purchased them used. I have to say that after owning for a short period of time a dodge van where the flywheel shattered on I-75 on a foggy night I will never trust the American made cars until they can prove to me that their vehicles will outperform the toyotas. My youngest sister was one of the first to own a Toyota in the early 70's and she was ridiculed for her purchase, she laughed all the way to the bank because it outperformed all of my other sisters cars by as many as 10 years with minimal repairs needed. Not to mention that fabulous sound system which was way beyond offered in the American Made cars. I've looked at this since the media started pounding Toyota that it was a ploy to discredit the foreign cars so that GM and Chrysler (american made) can level out the playing field because the government now has ownership in these companies. I told my husband to not sweat it, we are a loyal group of people who love our Toyotas and they can tout the American cars all they want but past experience says that it will be a miracle if they last 100,000 miles without major mechanical problems, much less the Toyota that is designed to be mainteance free up to 100,000 miles.

    What the government and the big wigs of American Companies did not take into consideration is the upselling that happens every time a Toyota passes through a Toyota dealership for things the customer knows they should take care of and have not done so. Toyota knows how to take care of their customers and the managment team as well as those who work on their vehicles. Certainly there are those who are never pleased and they even know how to take care of those customers. I think that Toyota will also laugh on the way to the bank because the Amercian management team underestimate the loyalty of the Toyota owning public. Did I mention I own a '94 Previa Van that I just drove round trip to Miami without a hitch! Not only does it run like a champ it still looks good without having to put the vehicle in a garage - my automatic windows still work, my ac is cold as ice, the upolstery is in tact and no one has ever guessed the age of my vehicle and most importantly I have have had minimal upkeep on this vehicle, I saved buying used and continue to save because I have not been marketed to trade my vehicle in every 3-4 years. I do want a VENZA because I think they are hot but I have to wait until I can buy a used one and that won't be for several years. I thank you Toyota for raising our ideals of what a quality vehicle should be, otherwise I'd still be stuck with that Cougar I had in the 70's where the engine failed at 60 mph and I was left with no power steering or power brakes or the dodge with the shattered fly wheel, the broken ac and the upolstery that blew out after 4 years.


  • Report this Comment On February 12, 2010, at 3:16 PM, madinga wrote:

    Higher resale as everything to do with a better product because you can judge how a product ages better than the other one. So if one car roles fine after 10 years and the other one is rusting in a scrapyard is based on reality not on perception. If Ford and Gm are willing to trade in Toyotas and giving a discount for it, it is clear there is money to be made...unless it's only a perception that they are making a favor to their customers.

  • Report this Comment On February 12, 2010, at 8:28 PM, LACEYLEE wrote:


    Been driving for 45 years. Owned them all. Volkswagen, Nissan, Chevy, Ford, Honda, Cars, Trucks, Motorcycles, you name it. And it comes down to this: A smart consumer does his research before he commits to a large investment like a car. Read Consumer Reports, ask your friends, visit a transmission shop. The brand that is NOT on the rack is the one you want to consider. Talk to your mechanic. And test-drive every car you are considering. The last time around it was a toss up between a Honda Accord and a Toyota Camry. Took both cars to the gas station & filled them up. Then proceeded to take my regular route to work, round trip. Compared the ride, mileage and comfort. Made my choice and have not been sorry.

    The comment about recalls is duly noted. All "American" manufacturers have had a lot of them.

    Most of the problems we have in this country can be traced back to the mainstream media. They are like a pack of sharks, circling, waiting to pounce on an unsuspecting victim and savage them until a new feeding opportunity presents itself. Then they swim away to feed on the new victim. Toyota was a "target of opportunity" for the media. This does not absolve them of blame, but merely puts the whole situation in proper perspective. Woe betide the (pick one) president, movie star, sports figure or company that goofs up on a slow news day! Here come de sharks! Thanks for reading. have a great weekend!

  • Report this Comment On February 15, 2010, at 9:43 AM, TMFMarlowe wrote:

    "Higher resale as everything to do with a better product because you can judge how a product ages better than the other one."

    You think the average person can look at a 2-yr-old Camry and a 2-yr-old Fusion and tell which one will be the better car 10 yrs from now? I don't.

  • Report this Comment On March 19, 2010, at 1:51 AM, INoFoolin wrote:

    The 'unintended acceleration' solution proposed by Toyota is a smoke screen. They have a controller problem in the electronics/software system that is made truly dangerous because their systems are not fail-safe when the computer senses a full open throttle. The brakes don't work, can't shift to neutral, can't (on 'smart' key systems) even turn off the ignition. These cars not only will cause Toyota huge recall costs and sales losses, but gigantic liability judgments. If you own Toyota sell the stock and the car. Ford is in an excellent position to profit!

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