A small diorama in a Toyota City museum in Japan depicts an often-told story within Toyota Motor Corp. On the left is a disabled truck on a country road. On the right is a single figure about the size of a tin soldier.
Shown in full flight and headed toward the broken-down vehicle, the figure represents Kiichiro Toyoda, the auto maker’s founder. According to the tale, Toyoda learned one of his products had failed and rushed to the scene to personally oversee the repair.
This story is being replayed today on a global scale as the world’s largest auto maker struggles to repair its relationship with consumers. Toyota vehicles once revered as the pinnacle of technological achievement now are viewed with skepticism or outright scorn following a wave of quality lapses.
Enter Akio Toyoda, Kiichiro’s grandson, who took charge of the auto maker last year.
“As early as possible, we would like to restore this trust, confidence placed by the customers in us,” he tells a small group of journalists recently given unprecedented access to Toyota test sites in Japan.
“For the past year, I was leading the whole company in apology. In my second year, I want to be a leader who can express the gratitude on behalf of the company.
“We are most concerned about the fact that we would like to build a better car,” Toyoda adds. “That’s how we started. We wanted to build a better car.”
A newly created quality-control organization is a critical tool in this process. And a key feature of the organization is its decentralized structure.
North America, Asia, China and Europe each have a chief quality officer with unfettered access to the top of the house.
“If I don’t like the way (an investigation) is going, I have a direct line to Akio Toyoda,” says Toyota North America’s Chief Quality Officer Steve St Angelo. “Everybody knows that, so they try their best to make a good consensus at a lower level.”
Since the new organization was established, Toyota has issued eight U.S. safety recalls to address issues ranging from possible fuel leakage to potential corrosion in vehicles sold in regions subject to harsh winters.
Would these campaigns have been conducted under the former Toyota quality regime?
“Several of them happened sooner,” says Dino Triantafyllos, Toyota Motor Engineering and Mfg. North America Inc vice president-quality. “We’ve improved the sensitivity of raising issues and the standardization by which they’re (investigated).”
The auto maker has set up a Swift Market Analysis Team of some 250 engineers and technicians. In keeping with the legend of Kiichiro Toyoda, SMART members conduct on-site probes of alleged vehicle defects by:
- Collecting and sharing data
- Confirming complaint details
- Broadening investigations (if warranted)
- Consulting specialists
Within Toyota the approach is known as “genchi-genbutsu,” which translates to “go and see.”
“Another big change is that we are involved of knowing any defects that are happening in any vehicles worldwide,” St. Angelo tells Ward’s in an exclusive interview at the CAR Management Briefing Seminars in Traverse City, MI.
“If there is a defect in China or Vietnam, we don’t actually participate in deciding whether it should be recalled or not,” he says. “But we do get the information, which allows us to take a look at our own designs. And I truly believe if we had that opportunity before we might have been able to be more sensitive to the sticky pedal.”
Complaints of sticking accelerator pedals, and Toyota’s lethargic response to those complaints, led the U.S. National Highway Traffic Safety Admin. to level a $16.4 million fine against the auto maker.
The problem, which had been reported in overseas markets, “caught us off guard in North America,” St. Angelo admits.
Traced to a material substitution at Indiana-based supplier CTS Corp., a fix was implemented.
“In addition to the material changes, we have spent more time with (CTS) in making sure there are no additional risks, working with them as we like to work with all our suppliers to improve their process,” Triantafyllos says, adding CTS remains on Toyota’s supplier list.
Adds St. Angelo: “Whenever we launch a new vehicle we have a very intense audit process to make sure all the worksheets are in place, all the quality processes in place, and also to ensure everybody is ready to launch the new vehicle. That process is very intense.
“What we’ve done now is taken a deep breath and said, ‘We cannot afford any more concerns.’ So (we are) going back right now and doing that complete audit (at) all of our key suppliers and all of our plants in North America, even though we’re running carry-over production.
“It gives us a chance to reevaluate, make sure nothing swayed away from where it used to be and give us a reassurance we are doing the best we can,” St. Angelo says.
Toyoda himself chairs a global quality task force that is integrated with the regional quality-assurance organizations. Serving with him are senior managing directors responsible for: Each senior manager also is a member of Toyota’s board of directors.
- Quality
- Customer service
- Product development
- Research and development
- Manufacturing
- urchasing
- perations
- ccounting
- Administration
- Human resources
Human resources is represented because Toyota is retraining its entire 320,000-member global workforce. On July 29, the auto maker opened a Toyota Center for Quality Excellence in Ann Arbor, MI, where it plans to instruct 10,000 employees annually on new quality-control measures.
A renewed emphasis on ensuring quality during the research-and-development phase portends the most promise for Toyota’s future because of its inherent forward-looking approach.
“It will take some time – and we’re trying to minimize that time – to (introduce) improvements into the product cycle,” Triantafyllos tells Ward’s.
“Obviously, for some time, with this increased sensitivity, we’re going to raise more problems. In the long term, our vision is to improve the product to the point where, even with this increased sensitivity, we will not see any problems – or we’ll see fewer problems.”
Industry observers and stakeholders are relatively unfazed by Toyota’s unfamiliar role as the goat.
“The American buyer still has an affinity for Toyota,” says Peter DeLongchamps, vice president-manufacturer relations at megadealer Group 1 Automotive Inc.
“Toyota builds marvelous cars,” he adds. “It’s possible the sleeping giant has awakened. And they are sparing no expense to ensure that they continue to be one of the leading automotive brands in the world.”
Says University of Detroit-Mercy marketing professor Mike Bernacchi: “While it’s been nicked and bumped, this is Toyota we’re dealing with.”
If Akio Toyoda is that confident about repairing his company’s broken relationship with the public, he doesn’t let on.
“It’s not I who will make that judgment,” he says. “Customers in the market are the ones to judge whether our actions were correct and successful.”
Through July, Toyota’s total light-vehicle sales in the U.S. were tracking 7.5% ahead of like-2009, according to Ward’s data.
Against this backdrop, the auto maker reported first-quarter net income of Y190 billion ($2.2 billion), a Y268.2 billion ($3.1 billion) swing from like-2009’s Y77.8 billion ($911 million) loss.
– with James M. Amend and Christie Schweinsberg
