Back in July of 2006, then-Toyota Motor CEO Katsuaki Watanabe bowed and apologized at the company's midyear news conference. Watanabe said a series of recalls and quality glitches have grabbed the full attention of senior leaders at the mighty Japanese auto maker.
"I take this seriously and see it as a crisis," Watanabe said in 2006. "The world-class quality that we've achieved is our lifeline. I want to apologize deeply for the troubles we have caused."
This was a very, very big deal in Japan and something of a crisis within Toyota. In one month alone in 2006, Toyota recalled about one million vehicles worldwide for problems ranging from loose trim parts to faulty engine parts in a wide range of model.
Then in August 2006, the U.S. National Highway Traffic Safety Administration (NHTSA), which, unlike Transport Canada, very publicly announces recalls and defect investigations, disclosed that it had launched an inquiry into the suspension on 219,522 Toyota Tundra pickup trucks. This eventually led to the recall of nearly one million pickups and SUVs in North America that might have been equipped with faulty steering rods.
The 2006 bad news came on the heels of a troubling 2005. During that year in the U.S. – Toyota's largest market by volume – the then-world's second largest auto maker recalled 2.38 million vehicles, according to the NHTSA. Most of the recalls in the U.S. were matched by similar actions in Canada.
And now, in the span of about the last two months, Toyota has recalled more than six million vehicles in North America, nearly half a million of them in Canada.
Recalls, of course, are a regular and normal part of the car business.
But for most of the last 40 years of the company's stunning and relentless growth, Toyota was rarely in the news for massive safety recalls. And Toyota remains unaccustomed to intense public scrutiny of this sort. Toyota grew into the world's richest and largest auto maker by offering cars and trucks renowned for their sterling reliability, durability and quality.
"We will continue to strengthen quality control under our belief that we must put the customer first and make quality No. 1," Toyota said in a statement in July 2006. That was when Toyota launched its company-wide quality initiative, Customer First.
Fast forward to today, and industry insiders say that it is important to point out that for the most part, Toyota's recalls have involved relatively minor issues and nearly all have been voluntary actions by the company.
However, these past two massive recalls have been about a sticking accelerator pedal. For everyone in the auto industry, this particular issue awakens the memory of Audi's unintended acceleration problem in the 1980s. This is the one later proved not to be the fault of the auto maker at all, but which nonetheless nearly destroyed Audi's entire business in North America – in large part because of shoddy reporting from the CBS news show 60 Minutes.
The truth is, vehicle recalls have been on the rise at most auto makers for several years now. One reason is that auto makers increasingly are using common components across many models to cut costs. If a single part goes bad, it can affect millions of vehicles.
Another factor at work: Manufacturers are piling on advanced features with often finicky electronic parts. The gizmos and do-dads may add value, but they can sometimes be troublesome. Auto makers have also increased the number of individual models and devoted enormous resources to developing gasoline-electric hybrids and other alternative propulsion systems.
In addition, auto makers have become incredibly cautious out of fear for costly litigation, particularly in the United States. U.S. juries regularly award multi-million-dollar settlements.
