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Toyota’s Woes Continue

Another week and the fallout continues to spread from Toyota’s recall controversy.

In Minnesota, a man imprisoned for vehicular homicide in a fatal Toyota crash sought a new trial, claiming that, in light of the unintended acceleration recalls, he was wrongly convicted for a mechanical malfunction that wasn’t his fault. A prisoner in Portland, Oregon has made similar claims in what is sure to be new trend in courts around the country.

Meanwhile, lawyers have begun to jockey for position in what is assumed to be a lucrative, and perhaps historic, class action lawsuit for all involved (J.P. Morgan recently put the total recall price tag for Toyota at $5.5 billion), internal company documents revealed that Toyota was aware of the unintended acceleration problem in 2002, when Camry owners began to complain about the issue.

The technical service bulletin went to every U.S. Toyota dealership in late August 2002 after some customers reported their vehicles were speeding up unexpectedly.

“Some 2002 model year Camry vehicles may exhibit a surging during light throttle input at speeds between 38-42 mph,” the bulletin states. “The Engine Control Module (ECM) calibration has been revised to correct this condition.”

Since the National Highway Traffic Safety Administration (NHTSA) was apparently aware of the issue as well, some critics, including Clarence Ditlow, the head of the nonprofit Center for Auto Safety, have suggested that both Toyota and the NHTSA are guilty of a coverup.

“The government is really hiding this information from the consumer,” Ditlow told CNN. “They’re in a conspiracy with the auto industry to keep these out of the public’s sight.”

Some analysts have questioned the seriousness of this document, however. Matt Hardigree of the automotive blog Jalopnik wrote that the CNN article may be misleading.

[The document] just shows there was a problem with electronics on one year of the Camry, which Toyota identified and repaired. The engine affected, the 1MZ-FE, isn’t even offered in the Camry anymore. The change to a new platform and new engine lineup would have drastically changed the ECM between the sixth-gen Camry and the current seventh-generation 2007-2010 Camry. Claiming the 2002 TSB [technical service bulletin] is related to Toyota’s current sudden unintended acceleration problems is sort of like claiming a screen recall on an iPhone is related to a recall on a first-generation iPod click-wheel.

While lawyers to try to figure what what Toyota knew and when, the recall problems continue to plague the automaker’s business and have been blamed for plant shutdowns in France and the UK. In February, Toyota’s sales in the European Union fell 20% as compared to the same time last year, despite the fact that overall auto sales in the EU were up 3%.

Finally (for now), Toyota was also forced to respond to owner complaints that recalled cars were still experiencing acceleration problems after they had been repaired by dealers. The company pledged to replace the pedals free of charge at the owner’s request. The operative phrase being “at the owner’s request”  as an internal memo cautioned dealers “not to solicit pedal replacement.”

As the crisis at Toyota rages on, stay tuned to the Monitor for the latest news and updates.

RiskCast: Episode 6

We’re back with another installment of the RiskCast. Listen to the staff of Risk Management magazine discuss newsworthy events. Topics covered include animal extinction, cosmic rays as the source of Toyota’s problems and the wide world of floods and flood insurance. This RiskCast is especially amusing because Editor in Chief Morgan O’Rourke is angrier than ususal.

And remember, you can also subscribe to the RiskCast through iTunes by clicking here or searching for “RiskCast” within the iTunes store. Please let us know what you think by ranking us or giving us a review on iTunes. (Past episodes are also available for you listening pleasure.)

Enjoy!

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Runaway Toyota a Hoax?

On March 8, San Diego-resident Jim Sikes was driving his 2008 Toyota Prius on a Southern California freeway when he claimed it began to speed out of control. According to Sikes, his attempts to slow the car failed and after reaching speeds in excess of 90 mph, he was only able to stop the runaway car with the assistance of a highway patrolman.

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At first glance, the incident seemed like yet another symptom of Toyota’s unintended acceleration woes that have led to the recall of millions of vehicles since late last year (and will be covered in more depth in our upcoming April issue).

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But when a subsequent examination of the vehicle by Toyota and federal government investigators failed to duplicate the problem, it called the accuracy of Sikes’ account into question. Toyota found the car’s gas, brake, and safety override to be in working order and that Sikes had rapidly pressed the gas and brake pedals back and forth 250 times (the maximum amount of data that the diagnostic system could collect). This may have caused the brakes to overheat and since Sikes did not press the brakes hard enough, the brake override system did not engage.

Fox News reported that Sikes has had a history of financial problems, which has led some to suggest that his report may have been a hoax. Toyota spokesperson Mike Michels would not say outright that Sikes had fabricated his story, however.

“We have no opinion on his account, what he’s been saying, other than the scenario is not consistent with the technical findings.”

Toyota’s investigation of the Sikes incident seems to indicate a shift in their response to the acceleration issue from one of contrition to a more aggressive defense of the safety of the vehicles. As they continue to investigate the source of the problem (could it be cosmic rays?), it is apparent that they are now willing to fight for their brand. Hopefully for their business and, more importantly, for Toyota drivers, their rediscovered focus is not a case of too little, too late.

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RiskCast: Episode 5

Toyota’s tumultuous times and a preemptive lawsuit involving Thomas’ english muffin.

These were the topics of the discussion when us editors of Risk Management got together to record this fifth installment of the RiskCast for your listening pleasure. Also included is an interesting discussion on the top 10 product recalls ever issued.

Enjoy.

And remember, you can also subscribe to the RiskCast through iTunes by clicking here or searching for “RiskCast” within the iTunes store. Please let us know what you think by ranking us or giving us a review on iTunes.

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