Toyota Motor Corp. on Tuesday announced a recall of some 223,068 vehicles in Japan, in a move that is likely to seriously dent the reputation of the Japanese automaker, and may cause lasting damage to the prospects for autoworkers across the world.
The recall, which will involve 400,000 vehicles of four models worldwide, is the most recent in a serious of disastrous incidents to strike at the company's reputation, which has already seen its market share decline in the United States.
A Toyota Prius vehicle is pictured parked at a dealership in Crissier near Lausanne February 7, 2010. Toyota, which has recalled more than 8 million vehicles around the world for problems with unintended acceleration, has decided to recall its new Prius hybrid in Japan to fix a braking software glitch, a dealer said Sunday. (Xinhua/Reuters Photo)
In November, Toyota conducted an initial recall of more than 4 million vehicles due to a potential fault in accelerator pedals, which was expanded to include an additional 2.2 million vehicles in January. After the latest recall, Toyota is likely to have sent more than 10 million vehicles back for repair in the last three months.
The issue goes beyond a simple repair, however, with the company now likely to see sales decline, which could lead to a loss of jobs both overseas and in Japan.
On Monday, the New York Times pointed out that in Georgetown, Kentucky, "most ... people owe their livelihood to the sprawling Toyota plant outside of town." That article went on to say that the people of the town were both nervous about their futures and hopeful that the current crisis would eventually blow over.
Toyota has overseas bases in over 27 countries and regions, and employs more than 300,000 people worldwide. As the New York Times article points out, most are confident the current crisis will be handled in a timely manner and damage will be minimized.
Japan's Yomiuri Shimbun, however, had sharp words for the automaker in a Jan. 31 editorial: "It is inevitable that Toyota will be seen as having been too focused on quickly streamlining its operations and expanding its global reach to pay sufficient attention to safety, the most important point for any automaker to be watchful of."
That perception has perhaps been exacerbated by the global coverage of the recall. The recall has made the front page of newspapers worldwide and led Toyota President Akio Toyoda to deliver a public apology on Friday and Tuesday.
"I am sorry that we have caused trouble again. Let me assure everybody that we will redouble our commitment to quality as our lifeline, with myself in the lead," he said in English at a live broadcast press conference Tuesday.
"We will do everything in our power to ensure the safety and well-being of our customers," he added.
Doing so may be a long haul for the automaker. While trust in a vehicle can take years to build, it can be damaged overnight. This has led GM to start a campaign to try to lure away potential Toyota customers.
Aaron Bragman of IHS Global Insight, however, pointed out that a core of loyal customers may stay with the Japanese automaker for the long haul, and that GM was taking a risk.
"If the public decides that the media outcry against Toyota is unwarranted, GM could suffer a public backlash instead, given that Toyota still commands a significantly loyal following among U.S. car buyers," Bragman wrote recently.
Website Hybridcars.com also commented that the risks associated with Toyota cars may not be as bad as currently perceived. "Media coverage of Toyota's safety issues may be blurring the lines between a potentially fatal problem with the accelerator pedals and hybrid braking issues that may largely be based on perception, " the site wrote in a Feb. 5 article.
Rather than arguing this case, however, Toyota has embarked upon a massive recall in order to attempt to limit any damage to its public image. With more than 10 million cars set for recall, 300,000 employees worldwide and the attention of the global media, it may have made the right move.