The lead editorial in the Nikkei today carries the headline “Response from Toyota [that] will determine trust in Japanese products.” It’s about, of course, the recent spate of accidents, attendant recalls, and public questioning of what the hell Toyota thinks it’s doing:
In the background of the quality issues are changes in the structure of the industry. In the last ten years, the globalization of automobile production and parts procurement has expanded greatly. Toyota itself has more than doubled the number of units it produces overseas, from 1.75 million in 2000 to a peak of 4.30 million in 2007. Hasn’t quality assurance been neglected in the process of this rapid expansion? Rethinking and inspections will be indispensable.
Additionally, there’s the increased level of technology. Even in the world of automobiles, which were products of mechanical engineering, the relative importance of electronic controls that employ IT (information technology) and software technology has increased recently.
The issue of recurring complaints related to brakes, which affects the Prius hybrid car that’s become Toyota’s representative line, had origins that lay in electronic control systems. It won’t do to be smug about past successes; it’s necessary to have new quality-assurance mechanisms that fit the electronic age.
The company’s capacity for crisis management has further been severely questioned. The trigger for this string of problems was a Lexus accident in which all four members of a California family were killed last summer, but Kindness itself would be hard-pressed to call Toyota’s response rapid.
While one issue smolders, the next pops up, and the situation gradually worsens. If a full stop isn’t quickly put to this negative cycle, the pulling away from Toyota by consumers will gain ground globally.
In the United States, the epicenter* for the issues, a midterm election will be held this fall, and portents that protectionism could raise its head have emerged. There’s also a possibility that a pushback against foreign manufacturers could gain in power.
Correspondingly, Toyota should respond to consumer unease and criticism of the company head-on, by swiftly adopting response policies with the CEO and other top managers at the lead. A clear and powerful message about the company’s path forward from here on must also go out to Toyota employees and shareholders.
Toyota is an enterprise that represents Japan, and the possibility cannot be discounted that its vacillating could lead to a lost of trust in the Japan brand as a whole. Additionally, there are environmental shifts common to many Japanese enterprises, such as globalization of production, and we’d like to see others also take the current situation as a lesson and channel their capabilities into quality and safety assurance.
Yes, we would, wouldn’t we? But consumer-product safety has been a thorny issue since the Japan, Inc., era, and the only reason it’s caught so many people by surprise in the West is that previous scandals have involved makers that don’t sell outside Japan (except for Bridgestone and, to a lesser extent, Mitsubishi Motors). On the one hand, the Japanese thrive on competition and are detail-oriented. On the other, the Japanese don’t have a culture of individual responsibility, and there’s a pervasive, if nearly always unspoken, belief that if no one noticed you doing it, it didn’t happen. (I believe that shame culture has many qualities that recommend it over guilt culture, but that isn’t one of them.) Hence the super-scary revelations in the ’90s and early ’00s about lax enforcement of safety procedures at nuclear facilities, hence the dumping by hospitals of indigent patients whose social insurance has run out, and hence the years that the Hidetsugu Aneha (along with others) was able to palm off bogus structural calculations for buildings that didn’t meet earthquake codes on government agencies.
It’s hard to know what the source of the problem here is. Electronics and cars are highly complex and sometimes have defects even when those who designed and manufactured them knew what they were doing and were working in good faith. But what starts with an honest mistake can end up being a dishonest cover-up when it’s handled with blame-shifting and stonewalling. Toyota is not alone among Japanese organizations in favoring blame-shifting and stonewalling as a response to accusations of bad work, and while its international reach means the organization is more sensitive to the expectations of non-Japanese audiences, it’s not surprising that it began by taking the usual approach of issuing vague statements about “unfortunate occurrences” and the like. We’ll see whether Toyota deals with the immediate problem and renames a few divisions or, if there turn out to be deep organizational problems at work, actually roots them out.
* Fellow Japanese geeks: don’t bother telling me that 震央, not 震源, means “epicenter.” I know. In English, we don’t talk about the “focus” of a crisis. Well, we do, but we mean something else by it.
Obviously, we need to know a lot more about the specifics of Toyota’s recent quality woes before we can establish causal links between the rise of lean product design in the 1990s and the current rash of bad news. The fact that Denso-built pedals do not appear to suffer from the same problem as CTS-supplied pedals indicates that this might be a supplier-specific problem, rather than the result of a systemic de-emphasis on quality at Toyota. Still, the Toyota practice of working closely with suppliers in the development process indicates that there’s more than enough blame to go around.
The real extent of this cost-cutting, decontenting and “design leaning” won’t be easy to quantify, but the fact that it’s been taking place since the early nineties and is only now yielding negative effects suggests that it’s been relatively well-managed. But Toyota’s reputation was built on those “fat” products of the mid-80s to early-90s, and it won’t be returning to the old practices that created them anytime soon due to their competitive disadvantages. This seems to suggest that, once damaged, Toyota is unlikely to ever recover its former quality halo.