Akio Toyoda, CEO of the company founded by his grandfather, has finally made a statement to the U.S. consumer about Toyota's (TM) recall problems. In an op ed piece in The Washington Post, he writes, "To ensure that our quality-control operations are in line with best industry practices, we will ask a blue-ribbon safety advisory group composed of respected outside experts in quality management to independently review our operations and make sure that we have eliminated any deficiencies in our processes."The missive comes as Toyota announced that it would recall 437,000 2010 Prius hybrids worldwide for brake problems, and it is probably too little too late. The piece also contains some self-congratulatory statements that may not be appreciated by people who own his company's cars. The most direct of these is that, "80 percent of all Toyotas sold in the United States over the past 20 years are still on the road today," but people faced with recalls of the firm's vehicles are unlikely to care.
Toyoda's comments fall into three categories: 1) "I have launched a top-to-bottom review of our global operations to ensure that problems of this magnitude do not happen again", 2) "To ensure that our quality-control operations are in line with best industry practices, we will ask a blue-ribbon safety advisory group composed of respected outside experts in quality management to independently review our operations" and 3) "We fully understand that we need to more aggressively investigate complaints we hear directly from consumers and move more quickly to address any safety issues we identify."
Toyoda completed his statement by writing that "great companies learn from their mistakes." Toyota's problem is that it may have already lost its image as a great company. It took the world's No.1 car firm over three decades to establish itself as the highest quality manufacturer marketing cars in the U.S., routinely scoring at the top of JDPower and Consumer Reports surveys. Toyota had nearly 18% of the American car and light truck market last year, about the same amount as Ford (F). But its quality image has evaporated now, and it may take years and hundreds of thousands of lost sales before its gets that image back, if it ever does.
Investing Like Warren Buffett
Learn from one of the world's best investors.View Course »