Former Toyota Quality Manager’s Thoughts on Historic Recall

This does not seem like the Toyota we know. The latest recall from Toyota related to its faulty accelerator continues to expand. Toyota has stopped sales of eight major models in the U.S. and the jury is still out as to how far this will spread to sales in Japan, China, Europe and other major markets. The Wall Street Journal reported today that Toyota has a fix:

The company is calling the equipment repair a “spacer” that would be inserted into the gas pedal, increasing the tension in a spring and helping to prevent the accelerator from sticking in position.

For the non-technical person, a spacer is a an inexpensive piece of flat metal, rubber, plastic, fiber or other material used to fill a gap or change spacing between two parts of a mechanical system. Although admirable in its simplicity, the spacer as a solution seems more like a band-aid than a root cause countermeasure in this case.

We’ve reported before on the cost of Toyota’s run to become number one is global vehicle sales, particularly in the area of recalls, and speculated about the erosion in quality at Toyota over the past few years as evidenced by unusually high level of recalls. In order to gain some perspective, I spoke with Chris Schrandt, one of our senior consultants who spent 10 years at Georgetown as the Quality Engineering Manager for Toyota.

What kind of conversations are going on right now at Toyota?

It depends on what the truth is. For Toyota to have missed something that big in the design would be huge. I know the push at Toyota has been toward commonization of parts. This has been great for cost reduction. It still seems inconceivable that all of these vehicles have the same mechanical problem. It doesn’t seem like it’s the truth that so many vehicles can have the same problem, same supplier or same design. It doesn’t seem likely based on my experience at Toyota. We always had back up suppliers, so the current problem implies that it is a Toyota design issue with several suppliers all making the good products to a bad spec.

What is the nearest comparable thing you saw when you were there?

We never saw anything this big. My former boss who started up the San Antonio plant had some pretty big drive shaft issues they found pretty late in the game. That was about 5 years ago. We never had to recall anything from the Georgetown plant. Maybe we had to get the dealer to look at a couple of hundred vehicles, but that was it. Unless it was a safety issue, it used to take an act of God to get the quality VP to send out a warranty notice to the dealers to look at something, so the scale of this is incredible.

What makes you say it’s not a mechanical issue, as their spacer solution seems to imply?

A mechanical issue implies either identical flaws across different parts, or some common part with problems across many models. This problem started with the Lexus, which is a different set of parts and now it has spread to other Toyota models. There is no way one supplier produced 5 million of the same parts. I read that the European plants are running so that means something isn’t the same between their parts and the parts at the other plants. The spacer as a solution doesn’t ring true. The body between these three models wouldn’t be the same. This suggests that it might even a software issue.

What would you be doing if you were at Toyota right now?

I’ve never seen anything like this before. I can’t imagine shutting down Georgetown for any reason. We never went into an emergency shut down while I was there. Sure we slowed down when sales were slow. If Toyota had a fix, every new vehicle would have the correct part. They would have jumbo jets flying around the world to keep the plants running. Was it their intention to idle the plants to free up the workers to help out at the dealerships? Even that’s inconceivable. It sounds like they really don’t have a root cause countermeasure.

You brought up an interesting point. Some say that Toyota are being opportunistic, using this quality problem as an excuse to idle their plants on purpose to cut operating costs while demand is down and dealer inventories are up. What do you think?

Nothing catastrophic has happened recently to sales that would cause Toyota to take that action. This problem has hurt their reputation, and shutting factories hurts their reputation further. I don’t believe they would do that opportunistically. It’s short-term thinking. They have slowed production down before, but never quite like this. Toyota would fly parts in on jets to keep the plants running. For example if it was an American supplier and they couldn’t figure out the problem, they would have a Japanese supplier make the parts and fly them in from Japan. In fact I was flown out at 2AM on Sunday to Delphi because it was 3 months to launch and there was a quality issue. That’s how seriously they take it. It’s not like other automotive companies who would just say “Oh well, we can catch it during our first recall.”

Thanks for your time Chris. Do you have any closing thoughts?

The magnitude of this problem is historic. Toyota always errors on the side of safety and quality. People have lost their lives due to this defect. I am sure that the leadership at Toyota is working tirelessly to get to the root cause and correct all of the problems as quickly and efficiently as possible.

4 Comments

  1. Anonymous

    January 29, 2010 - 6:14 am

    “People have lost their lives due to this defect.”
    – not according to this: http://www.ctscorp.com/publications/press_releases/nr100127.htm
    Maybe I missed another article?
    Other than that, some great comments from someone who used to be on the inside. Much appreciated.
    Simon.

  2. Karl

    February 1, 2010 - 5:07 am

    First all, I don’t KNOW what has happened, but I never let that stop me from speculating. According to several articles (including the Business Week one Jon mentions), Toyota has several suppliers for the same part. The one in Japan has had no problems. I am guessing that the European supplier also has not. I believe the parts on US cars come from China, because Ford has suspended production on its Transit trucks made in China, just in case their linkages from the same supplier have a problem.
    Regarding stopping production, it is obvious that the supplier can only produce so many new parts per day. Toyota is correctly assigning these parts to fixing cars already owned by existing customers, rather than in producing new cars for potential customers. I am sure that, as soon as the supply chain catches up to the recalled vehicles, production of new cars will resume.
    In a previous lifetime, I specified a change in material on a moving part to reduce costs. It led to huge warranty charges as the material would gall when rubbing. We changed again to a material almost as inexpensive, but not subject to damage. I learned.

  3. Jamie Flinchbaugh

    February 17, 2010 - 6:20 am

    Jon, I have read no less than 50 (and probably 100, I hate counting) blog posts and articles on the subject. I thought this was one of the most useful contributions.
    I have been resisting writing about the Toyota case because so little is actually know about the defect itself, and cause and effect isn’t clear. But I have been getting enough questions about it. I don’t think this changes anything about Toyota’s success. They still have dramatically fewer recalls than others. And of course no one that knows lean would say they were anything close to perfect.
    I did write up some of my thoughts and lessons in observing the story on my blog here: http://jamieflinchbaugh.com/2010/02/the-fall-of-the-mighty-toyota/
    Jamie Flinchbaugh