VECTOR INFORMATICS

TOYOTA RECALL "STICKING

ACCELERATOR PEDAL"
TOYOTA MOTOR CORPORATION
SUBJECT “RECALL”

It is no secret that Toyota has encountered massive media attention over the past few
weeks with the release of a temporary suspension to a line of their selected vehicles due
to a “sticking accelerator pedal” recall. The announcement, on January 21, 2010,
launched a mission by the Toyota Motor Corporation to cease manufacturing and suspend
sales pending further investigation and remedy to the problem. With daily updates and
continuing press releases flying through the airwaves, Toyota Motor Corp. is making an
amazing effort to provide assistance, updates and information to the consumer on this
pedal flaw.

“Helping ensure the safety of our customers and restoring confidence in Toyota are very
important to our company,” said Group Vice President and Toyota Division General
Manager Bob Carter. “This action is necessary until a remedy is finalized. We’re making
every effort to address this situation for our customers as quickly as possible.”

With over 1,234 Toyota brand dealers affected by this recall, they are reported to lose
$1.75 million to $2 million a month in revenue from new and used versions of the models
that aren’t allowed to be sold. It would appear that the gravity of this situation could be
devastating. However, dealers, executive automotive industry leaders and consumers
show the utmost confidence in the Toyota brand. So states David Sargent, Vice President
of Global Automotive Division at J.D. Power and Associates.

“Historically, vehicle recalls have minimal effect [as far as customer satisfaction ratings
go] as only a very tiny percentage of owners actually experience the problem," Sargent
explains. "For the majority of owners, the most significant impact will be the
inconvenience of taking their vehicle in to the dealer to be fixed. The high volume of
recall work is also likely to affect other owners trying to get a dealer service appointment.
The effect will be largely dependent on how well Toyota and the dealers manage this
process. There may also be an indirect effect coming from some consumers’ residual
concerns about the general reliability of their vehicle and potential effect on the resale
value. Overall the impact is likely to be less profound than might be expected."

Although the spotlight seems to be on Toyota at the moment, I ponder the subject “recall”
as a whole. On a grander scale, this begs the question, “What other undiscovered product
defects are lurking out there”? What’s more, “When will it prove faulty? What danger
and are we in?”

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It is a given that with our ever-expanding growth multiplied by the impenetrable demand,
we produce products at such great rates that these recalls for product defects are grossly
anticipated. The control we maintain to manufacture products to meet consumer demand
comes with extraordinary and overwhelming guarantee that we will continue to be at risk.

As this discussion directs our attention to vehicle recalls, we note that almost every
manufacturer submitted a recall in 2009 from BMW to Volkswagen. The U.S.
Environmental Protection Agency (EPA) lists those vehicle recalls by 1) Order of the
EPA, 2) Voluntary Recall by Manufacturer, 3) Voluntary Service Campaign by
Manufacturer or 4) Manufacturer voluntary action with EPA Influence. The attention
Toyota is getting albeit current, shows they are clearly not alone.

Beyond the automobile industry we were subject to countless product recalls across the
board in the past year. We find that the US Consumer Product Safety Commission found
several defects, in just the month of January 2009, ranging from choking, fire and falling
hazards beyond the unthinkable death hazard. Play sets, ice cleats, aromatherapy kits,
jewelry, electric gloves, children bed canopies, lip gloss key chains, children’s manicure
kits, television wall mounts, glider recliners, furnaces, sunglasses, stationary bicycles,
infant rattles, dishwashers, sweatshirts, portable play yards and even pajamas were on
their list of recalls just to name a few.

After taking a course in economics we are educated enough to know about supply and
demand and how the system works. But, where does the protection element come into
play? When does it become necessary to introduce a law stating that a limit on production
will be required to prohibit such defects from occurring in the first place? It is always the
best intentions of the manufacturer to produce such products with efficiency, safety and
quality so I dare not say that they don’t care. In fact, they cannot produce such products
without thorough research and submitting to extensive testing. That being the case, I hope
that it becomes a greater motive to the “counsels that be” to reduce these risks at that
same level of concentration as they display in creating and producing the products to
begin with.

Applause to Toyota for acknowledging this situation as expediently and intently as they
have. Toyota proves to be a major backer of their products and services showing their
true dedication to the consumers wellbeing and satisfaction.

Toyota USA Newsroom, “Toyota Temporarily Suspends Sales of Selected Vehicle”,

TORRANCE, Calif., January 26, 2010, http://pressroom.toyota.com/pr/tms/toyota/toyota-
temporarily-suspends-sales-153126.aspx
Bloomberg Press, “Toyota’s U.S. Dealers May Lose $2.47 Billion a Month (Update2)”
by Mike Ramsey and Doron Levin,
http://www.bloomberg.com/apps/news?pid=20601109&sid=a1tVU.Dmb8pk.
Quality Digest, News Archive, “Will Toyota's Recall Severely Impact Customer
Satisfaction?”, by Raissa Carey | 01/28/2010,
http://www.qualitydigest.com/inside/quality-insider-news/will-toyotas-recall-severely-

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impact-customer-satisfaction.html
U.S. Environmental Protection Agency, Cars and Light Trucks, “Vehicle Recalls”, 3rd
Quarter 2009 Recall Updates (PDF) “, (8 pp, 38K, October 2009),
http://www.epa.gov/oms/cert/recall/2009recallreport3.pdf.
U.S. Consumer Product Safety Commission, Press Releases/Current, “January 2009
Recalls and Product Safety News”, http://www.cpsc.gov/cpscpub/prerel/prereljan09.html

Heather Grandquest
1/28/2010

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accelerator-pedal.cfm

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