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Toyota hopes to fix image along with gas pedals

The automaker says parts are already on their way to the company's 1,200 dealerships so that motorists' cars can be repaired.

February 02, 2010|By Ken Bensinger and Tiffany Hsu
  • Though salesmen had fewer models to offer customers in the showroom, mechanics were busy in the service department at Brent Brown Toyota in Orem, Utah.
Though salesmen had fewer models to offer customers in the showroom, mechanics… (George Frey / Bloomberg…)

Toyota Motor Corp. announced a fix to its sticking gas pedal problem Monday, but the Japanese automaker must still convince a skeptical public that its latest action will prevent vehicles from accelerating out of control.

Taking the offensive, Toyota escalated a media barrage it began over the weekend, sending a top U.S. executive to appear on NBC's "Today" show and other venues to detail the company's plans to repair pedals on millions of recalled vehicles in coming weeks.

Toyota sought to assure its customers that the fix -- a steel shim that can be inserted in pedal assemblies in half an hour -- will resolve its ongoing woes with sudden acceleration. The modification will allow Toyota to resume sales and production of eight popular models that were subjected to an unprecedented "stop sale" last week.

The automaker has had difficulties explaining why it didn't address these problems sooner, considering the fact that it conducted a floor mat recall in 2007, and revealed in a filing to federal regulators that it first detected a problem with sticking pedals nearly three years ago.

Christine Pearson, who teaches crisis management at the Thunderbird School of Global Management, believes that Toyota has no choice but to be completely transparent going forward.

"The question is going to hinge on whether they really knew about these problems for a long time," Pearson said. "If that's the case, it's going to be really bad news for them."

According to Toyota, the parts are already on their way to the company's 1,200 dealerships so that motorists' cars can be repaired. Its production lines in the U.S. and Canada, idled this week because of the recall, will begin pumping out cars and trucks again Monday.

"We're sorry for what we put our customers through," Jim Lentz, president and chief operating officer of Toyota's U.S. division, told reporters. "We want to demonstrate that our commitment to safety and our customers is higher than it's ever been." Lentz also went on the "Today" show.

Toyota dealers were bracing for an onslaught of customers seeking repairs later this week, with some shops considering extended operating hours.

"We are prepared and are in the process of putting together schedules," said Tom Rudnai, general manager of Longo Toyota in El Monte. "It's going to depend on parts availability, but if they give us enough parts, we'll definitely do 24/7."

Industry experts say Toyota must move quickly to repair its relationship with its customers.

"If they had been able to handle this situation all at once, it might have been different," said Michael Gordon, chief executive of Group Gordon, a crisis management and corporate public relations firm in New York. "But they've made so many missteps in doing this that the damage could be permanent."

He and others point to the staggered approach Toyota has taken to the situation as the chief problem.

Since public attention became focused on the sudden acceleration problem last fall, Toyota executives have until recently denied that the thousands of complaints about the problem lodged by Toyota and Lexus drivers could be explained by anything other than floor mats, which are subject to a previously announced recall that has gradually expanded to include 5.3 million cars and trucks.

Then, late last month, Toyota suddenly said it had also found a problem with sticking pedals made by an Indiana supplier, prompting the recall of 2.3 million vehicles (most of which were also targeted by the floor mat recall). Five days later, Toyota said it would halt all production and sales of those vehicles, a step it insists was voluntary, despite a statement by U.S. Transportation Secretary Ray LaHood that Toyota stopped sales "because we asked them to."

Some Toyota owners expressed frustration over what they said was a lack of communication from the company.

"I've never seen Toyota go through something like this," said Susan Glandon, 49, of Huntsville, Ala., who bought a 2009 Corolla on Jan. 6. "It's not like this is a recall on a door latch or a trunk latch. I think their reputation for customer service is going to hinge on how each of these dealerships address this fix."

A poll conducted by HCD Research after Lentz's appearance on NBC's "Today" indicated how far Toyota has to go.

After reviewing the video clip, 56% of respondents said they were unlikely to buy a Toyota -- compared with 37% who said they were unlikely to do so before viewing it.

Auto industry experts remarked that Toyota's handling of the situation echoes the infamous Ford and Firestone recall of a decade ago. That incident, spurred by faulty tires and sport utility vehicles prone to rollovers, turned into a nasty shoving match that damaged the reputations of both companies.

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