It’s not only cars they want to slow down

‘The car in front is a Toyota’, says the advertising slogan. And if recent events are to be believed, that car is accelerating uncontrollably into the distance before turning into a fireball in a high-speed crash. Where did it all go wrong? That was the topic of BBC2’s The Money Programme this week.

The trouble for Toyota really started in August last year. An off-duty California Highway Patrol officer, Mark Saylor, took his Lexus (Toyota’s up-market brand) into his dealer for maintenance and was given a temporary replacement vehicle. Later that day, Saylor was driving family members along Highway 125 in San Diego when the car suffered what is known as SUA – Sudden Unintended Acceleration – with Saylor apparently unable to find a way to stop it. Saylor’s last moments were spent making a heart-wrenching call to 911 before the car crashed at 100mph, killing all the occupants.

Toyota initially blamed the accident on incorrectly fitted floormats which trapped the accelerator pedal, but other problems with Toyota cars soon came to light. For example, there appeared to be a problem where the brakes lost most of their power when the car’s accelerator was fully depressed. Numerous other stories of brake problems and uncontrollable acceleration came to light in subsequent weeks. In January and February this year, Toyota announced wide-ranging product recalls for a number of different models, including it’s ever-so-green hybrid, the Prius. In late February, the head of the company, Akio Toyoda, appeared before a US congressional committee to explain what went wrong and to offer his condolences to Saylor’s relatives.

While Toyota was never regarded as a particularly sexy brand, its cars always had the selling point that they could be relied on to run smoothly. Now, within the space of a few months, Toyota’s hard-won reputation for safety and reliability, built up over decades, has been called into question. The Money Programme argued that all this was a product of the company moving away from its long-established and widely admired principles in favour of a dash for growth.

Toyota was founded as an automatic loom maker in 1926 by Sakichi Toyoda. In 1933, it began to make cars and the Toyota Motor Corporation was founded as a spinoff by Toyoda’s son, Kiichiro, in 1937. By 1957, the company began exporting cars to the US and a highly productive and innovative business model was built around the principles of ‘The Toyota Way’, which included: genchi genbutsu (‘go and see’) – that is, find out for yourself what is going on; taking a long-term view; team effort; understanding each other; and, most importantly, kaizen – an attitude of continuous improvement.

The results were legendary. By the late 1970s, British Leyland produced about five cars per worker; Ford produced 12 cars per worker; Toyota produced 51. As The Money Programme noted, Toyota’s methods, from workers on the frontline taking personal responsibility for improving efficiency through to just-in-time production processes, have been studied by organisations as diverse as Tesco and the UK National Health Service.

By 1999, Toyota had produced a grand total of 100million cars and its next ambition was to become the biggest carmaker in the world, overtaking General Motors. By 2007, it had succeeded in its aim, making multi-billion dollar profits while its rival descended into a pit of debt. Yet this week’s documentary argued that this rapid growth had been at the expense of the very methods that had established Toyota’s profile in the first place.

Production, which had been expanded step-by-step in the past, suddenly leapt by 50 per cent in just a few years. The company’s very close relationships with parts manufacturers in Japan were poorly replicated in other parts of the world. Costs were squeezed and testing procedures were not as thorough as they were in the past. There have been claims that internal concerns about product safety were ignored, employees were ruthlessly overworked, and the firm’s plants in the American south were using cheaper, non-unionised labour to the ultimate detriment of all workers in the auto industry.

While all car manufacturers make recalls, which is unsurprising given the complexity and potential danger of modern vehicles, Toyota seems to have had more than most in recent years – even before the latest traumatic events. Embarrassing memos have emerged from its US arm about how one recall had been particularly narrow, reducing the number of vehicles involved. This may have been regarded as a money-saving ‘win’ by company insiders at the time, but the documents didn’t do much for the firm’s reputation in the light of the Saylor incident and previous serious accidents associated with Toyota cars.

The Money Programme argued that this was essentially an age-old tale of corporate greed, that the company had lost sight of its founding philosophy with devastating consequences for drivers and, ultimately, for its reputation. This was the interpretation placed on events by Akio Toyoda himself when he apologised for his company’s failings. By expanding so rapidly, it seems, corners had been cut. Like Icarus flying towards the sun, Toyota’s ambition and rapid growth were doomed to failure, but the outcome might not be so bad if the company learned some humility. This modern parable fits neatly into a contemporary sniffiness towards economic growth.

Yet this view seems to exaggerate what has actually happened. Drivers have every right to expect the cars they drive to be as safe as possible, and it is quite possible that the firm has not been as diligent as in the past in relation to quality control. But Toyota cars are still overwhelmingly safe, with only a tiny proportion of its vehicles having reported problems. While the blow to Toyota’s reputation will hurt, the company still sold 204,000 cars worldwide last month, compared with 134,000 for the same month in 2009, continuing a run of eight consecutive months of sales growth.

Moreover, it is still not clear what is causing the safety problems. The Money Programme put forward the argument that weaker relationships between the firm and parts suppliers meant quality had been compromised, yet then confusingly argued that the trouble might be with the complex software that now controls cars. The old days when pressing the accelerator pedal was a mechanical process that immediately delivered more petrol to the engine are, apparently, long gone. Now, putting your foot on the gas merely delivers a suggestion to the on-board computer that the driver would like to go faster; the computer then figures out the optimal way to achieve this. Despite denials from Toyota, the programme suggested that this software may be less than perfect, causing a tiny number of cars to accelerate wildly out of control.

For all the criticism levelled at it today, Toyota remains a highly productive and innovative company. But that productivity is built as much upon a compliant workforce as innovation and automation. Toyota’s methods of organisation are super-efficient, but they rely on employees taking responsibility for driving up productivity. This has been the envy of corporations around the world. With even the far-from-perfect trade unions of the past in terminal decline, employers in the US and the UK now have a much freer hand to impose new working practices on staff, extending working hours and forcing employees to do more of their work on their own time.

It is this aspect of the Toyota story that should cause most concern, not the rare but terrible accidents associated with its cars, nor trite, age-old stories about too much corporate ambition.

Rob Lyons is deputy editor of spiked.

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