Payday Loans

By 2g1c2 girls 1 cup

GM Chairman and CEO Dan Akerson testified before Congress yesterday. He opened with the following statement. Akerson has been criticized in the media for his lack of experience in the auto industry and his public comments of his competitors’ products, specifically Prius and Lincoln. This statement to open the hearing, though, is perfect. Whoever wrote this statement should have prepped Rick Wagoner and the rest of the auto CEOs when they testified a few years ago. Enjoy.

Good morning and thank you Chairman Jordan and Ranking Members Cummings and Kucinich.  I welcome the opportunity to testify today and stand behind a car that all of us at GM are proud of.

Please allow me to start with some Volt history: 

GM unveiled the Volt concept at the January 2007 Detroit Auto Show.  In June of 2008, the “old GM’s” Board of Directors approved the Volt project for production well before the bankruptcy and infusion of government funds.

The battery story goes back much farther to the early 1990s with GM’s extensive work on the EV1.

Drawing on that experience, we engineered the Volt to be a winner on the road and in customers’ hearts.

Today, I’m proud to say the Volt is performing exactly as we engineered it…

            …In its first year, Volt garnered the Triple Crown of industry awards: Motor Trend Car of the Year; Automobile Magazine’s Automobile of the Year; and, North American Car of the Year;

            …Volt is among the safest cars on the road – earning 5 Stars for occupant safety and a Top Safety Pick from the Insurance Institute for Highway Safety;

            …And, 93 percent of Volt owners report the highest customer satisfaction with their car — more than any other vehicle and the highest ever recorded in the industry.

Beyond the accolades, the Volt’s importance to GM and our country’s long term prospects is far reaching.

We engineered Volt to be the only EV that you can drive across town or across the country without fear of being stranded when the battery power is drained.

You can go 35 miles, and in some cases much more, on a single charge… which for 80 percent of American drivers is their total driving range.

After that, a small gas engine extends your range to 375 miles before you have to recharge or re-fill.

But, if the Volt message boards are any indication, there’s some real one-upmanship going on out there – with customers reporting going months and thousands of miles without stopping once at a gas pump.

No other current EV can do this or ‘generate’ that much passion with its drivers.

We engineered Volt to give drivers a choice— to use energy produced in the United States rather than oil from places that may not always put America’s best interests first.

And, we engineered Volt to show the world what great vehicles we make at General Motors.

Unfortunately, there is one thing we did not engineer.  Although we loaded the Volt with state-of-the-art safety features — we did not engineer the Volt to be a political punching bag.

And that, sadly, is what it’s become.

For all of the loose talk about fires, we are here today because tests by regulators resulted in battery fires under lab conditions that no driver would experience in the real world.

In fact, Volt customers have driven over 25 million miles without a single, similar incident.

In one test, the fire occurred seven days after a simulated crash.  In another, it took three weeks after the test.  Not three minutes.  Not three hours.  Not three days.  Three weeks.

Based on those test results, did we think there was an imminent safety risk?  No.

Or, as one of our customers put it:  if they couldn’t cut him out of the vehicle in two or three weeks, he had a bigger problem to worry about.

However, given those test results, GM had a choice on how we would react.  It was an easy call.

We put our customers first.  We moved fast and with great transparency to engineer a solution.

We contacted every Volt owner and offered them a loaner car until the issue was settled.  And if that wasn’t enough, we offered to buy the car back.

We assembled a team of engineers who worked non-stop to develop a modest enhancement to the battery system to address the issue.

We’ll begin adding the enhancement on the line and in customers’ cars in a few weeks.

And in doing so, we took a 5-star rated vehicle and made it even safer.

Nonetheless, these recent events have cast an undeserved, damaging light on a promising new American technology that we are exporting around the world, right from Detroit.

As the Wall Street Journal wrote in its Volt review:  We should suspend our rancor and savor a little American pride. A bunch of Midwestern engineers in bad haircuts and cheap wristwatches just out-engineered every other car company on the planet.

The Volt is safe.  It’s a marvelous machine. It represents so much of what is right about General Motors and, frankly, about American ingenuity and manufacturing. 

I look forward to taking your questions.

Thank you

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Relax, your Volt isn’t going to spontaneously combust as your drive to Grandma’s house. The sky isn’t falling. Fox News has its head up its…butt.

Despite the bad press, which was only that and not a real-world issue, the National Highway Traffic Safety Administration (NHTSA) issued a statement today saying that it closed the investigation into the Volt because they found “…no discernible defect…exists and that the vehicle modifications recently developed by General Motors reduce the potential for battery intrusion resulting from side impacts.” See below for the entire statement from NHTSA.

WASHINGTON, DC – The National Highway Traffic Safety Administration (NHTSA) released the following statement today regarding the conclusion of its safety defect investigation into the post-crash fire risk of Chevy Volts (PE11037):

Today, the National Highway Traffic Safety Administration closed its safety defect investigation into the potential risk of fire in Chevy Volts that have been involved in a serious crash. Opened on November 25, the agency’s investigation has concluded that no discernible defect trend exists and that the vehicle modifications recently developed by General Motors reduce the potential for battery intrusion resulting from side impacts.

NHTSA remains unaware of any real-world crashes that have resulted in a battery-related fire involving the Chevy Volt or any other electric vehicle. NHTSA continues to believe that electric vehicles show great promise as a safe and fuel-efficient option for American drivers. However, as the reports released in conjunction with the closure of the investigation today indicate, fires following NHTSA crash tests of the vehicle and its battery components—and the innovative nature of this emerging technology—led the agency to take the unusual step of opening a safety defect investigation in the absence of data from real-world incidents.

Based on the available data, NHTSA does not believe that Chevy Volts or other electric vehicles pose a greater risk of fire than gasoline-powered vehicles. Generally all vehicles have some risk of fire in the event of a serious crash. However, electric vehicles have specific attributes that should be made clear to consumers, the emergency response community, and tow truck operators and storage facilities. Recognizing these considerations, NHTSA has developed interim guidance—with the assistance of the National Fire Protection Association, the Department of Energy, and others—to increase awareness and identify appropriate safety measures for these groups. The agency expects this guidance will help inform the ongoing work by NFPA, DOE, and vehicle manufacturers to educate the emergency response community, law enforcement officers, and others about electric vehicles.

For additional information on the Volt investigation and others, visit www.SaferCar.gov

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Toyota’s image took another hit today, as Consumer Reports magazine recommended that customers avoid the Lexus GX460 SUV. The model was redesigned for the 2010 model, and that is the only model affected by the magazine’s recommendation. CR believes the problem is in the calibration of the electronic stability control (ESC) system. CR testing revealed that the vehicle could roll over under certain, common driving situations. Specifically, when driven into a curve too fast and the driver lifts off of the gas pedal (not a panic braking or sudden swerve), the ESC will not intervene until the vehicle is almost sideways, according to CR. Under these circumstances, the vehicle could rollover. CR also pointed out that there are no actual reports of such an occurrence, but the risk is there. The Toyota Pathfinder, which is mechanically similar, was not found to have the same issue, lending credibility to the calibration idea. Click on the video to see the actual test.

Some have blamed the government for some of Toyota’s recent quality issues, saying that because the US government owns GM and Chrysler, they have purposely damaged Toyota’s quality reputation in order to improve GM and Chrysler’s sales. I do not subscribe to this idea, and it should be noted that Consumer’s Union, publisher of Consumer Reports, is not part of nor controlled by the US government.

Lexus responded quickly, issuing a stop sale order to its dealers. They plan to evaluate the SUV using CR’s testing methods to see if they agree that there is an issue. Obviously, they will fix whatever they find. Note that the government is not involved at all (yet), and this is not a recall.

Toyota needs to get out of the spotlight, and quickly. I had just thought the other day that it had been a while since any bad news had come out about them. Now this. The longer they stay in the (negative) spotlight, the more damage will be done and the longer it will take them to repair the damage. Americans forget quickly, but we haven’t had the chance to forget. Heck, if we all developed ADHD, we would still have Toyota’s issue top of mind.

Lexus issued the following press releases today:

Early this morning:  “We’re concerned with the results of Consumer Reports testing on the Lexus GX 460 and their suggested buyer recommendation.  Our engineers conduct similar tests and we feel these procedures provide a good indication of how our vehicles will perform in the real-world; however, we will try to duplicate the Consumer Reports’ test to determine if appropriate steps need to be taken.  Please keep in mind that the 2010 GX 460 meets or exceeds all federal government testing requirements.  Customer safety and satisfaction remain our highest priorities.  We take the Consumer Reports’ test results seriously and appreciate Consumer Reports bringing it to our attention.”
12 hours later:  “For more than 20 years, Lexus has made customer safety and satisfaction our highest priorities.  We are taking the situation with the GX 460 very seriously and are determined to identify and correct the issue Consumer Reports identified. At this time we have asked our dealers to temporarily suspend sales of the 2010 GX 460.
Lexus’ extensive vehicle testing provides a good indication of how our vehicles perform and we are confident that the GX meets our high safety standards.  Our engineering teams are vigorously testing the GX using Consumer Reports’ specific parameters to identify how we can make the GX’s performance even better.
For any customer who has purchased a 2010 GX 460 and is concerned about driving their vehicle, we will provide a loaner car until a remedy is available.
As always, Lexus is committed to providing our customers with outstanding products and service.”
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The runaway Prius that was the subject of so much media attention last week has been examined by both Toyota and the US federal government (NHTSA). NHTSA isn’t talking, at least not yet, but Toyota is. Toyota released a statement (see below for the full text) today that comes just short of accusing the driver of lying about the incident. While not actually saying he lied, it does say that his account is “inconsistent” with the examination of the actual vehicle that Toyota engineers performed over the last several days. Reports have circulated that the driver, James Sikes, has financial troubles, driving speculation that he is attempting to capitalize on the publicity surrounding the reports of Sudden Unintended Acceleration (SUA) in various Toyota models.

Toyota has steadfastly denied that there is any electronic cause for the problems, saying that the sticking pedal and misplaced floor mats are the only causes for the acceleration problems. Toyota has recalled over 8 million vehicles worldwide to address the problem. The statement shows that Toyota doesn’t intend to go down without a fight in the battle over the SUA problem. Anyone over 35 probably remembers the similar issue surrounding the Audi 5000, made famous by the CBS program 60 Minutes in 1986. Audi’s sales tumbled dramatically in the wake of the report, and took many years to recover. Toyota obviously intends a happier outcome for itself, though its handling of the problem hasn’t exactly been perfect. They’ve let this continue to be front-page news for many weeks now, which is the last thing they want. They need to get this off of the news cycle and let it die down. The longer this stays top of mind, the longer lasting and more damaging the problem will be.

Toyota’s Statement:

Toyota Offers Preliminary Findings From Technical Field Examination of Alleged ‘Runaway Prius’ in San Diego


Toyota Engineers Conclude Two Days of Investigation

Driver’s Account Of Event Inconsistent With Initial Findings

SAN DIEGO, Calif., March 15, 2010—At a press conference today, Toyota Motor Sales (TMS), U.S.A., Inc. offered key preliminary findings of technical field examination and testing that were performed on March 10 and 11 regarding an alleged “runaway Prius” event dramatically covered by national news media.

Toyota engineers completed an investigation of the 2008 Prius driven by Mr. James Sikes that was the subject of a 911 emergency call on Monday, March 8. The driver reported that the vehicle was traveling at a high rate of speed, the accelerator pedal was stuck, and that the vehicle was out of control and could not be stopped.  The emergency operator repeatedly instructed the driver to shift the car into neutral and turn off the power button.
A California Highway Patrol officer intercepted the vehicle and instructed the driver to press firmly on the brakes, apply the emergency brake and turn off the car, at which time the Prius came to a safe stop.
While a final report is not yet complete, there are strong indications that the driver’s account of the event is inconsistent with the findings of the preliminary analysis.
Toyota engineers employed data download/analysis, static and dynamic testing as well as thorough inspections of all relative components.  In addition, they retraced the reported driving route taking into account driving time and accounts from the 911 recording.
The investigation revealed the following initial findings:
• The accelerator pedal was tested and found to be working normally with no mechanical binding or friction. It should be noted that the Prius is not subject to a recall for sticking accelerator pedals and the Prius component is made by a different supplier than the one recalled.
• The front brakes showed severe wear and damage from overheating. The rear brakes and parking brake were in good condition and functional.
• A Toyota carpeted floor mat of the correct type for the vehicle was installed but not secured to the retention hooks. It was not found to be interfering or even touching the accelerator pedal.
• The pushbutton power switch worked normally and shut the vehicle off when depressed for 3 seconds as the 911 operator advised Mr. Sikes to do.
• The shift lever also worked normally and neutral could be selected. The neutral position is clearly marked and can be easily engaged by moving the lever left to the “N” marking.
• There were no diagnostic trouble codes found in the power management computer, nor was the dashboard malfunction indicator light activated. The hybrid self-diagnostic system did show evidence of numerous, rapidly repeated on-and- off applications of both the accelerator and the brake pedals.
• After examination of individual components, the front brakes were replaced and the vehicle was test driven, during which the vehicle was observed to be functioning normally.
• During testing, the brakes were purposely abused by continuous light application in order to overheat them. The vehicle could be safely stopped by means of the brake pedal, even when overheated.
The Prius braking system uses both conventional hydraulic friction brakes and a regenerative braking system which switches the electric drive motors into brakes to generate electricity.
The system features a sophisticated self- protection function which cuts engine power if moderate brake pedal pressure is applied and the accelerator pedal is depressed more than approximately 50 percent, in effect providing a form of “brake override.”
This function, which is intended to protect the system from overload and possible damage, was found to be functioning normally during the preliminary field examination.
Toyota engineers believe that it would be extremely difficult for the Prius to be driven at a continuous high speed with more than light brake-pedal pressure, and that the assertion that the vehicle could not be stopped with the brakes is fundamentally inconsistent with basic vehicle design and the investigation observations.
These findings suggest that there should be further examination of Mr. Sikes account of the events of March 8.
NHTSA investigators were present during Toyota’s examination, and are conducting their own investigation of the vehicle and its performance.  Toyota’s examination was also observed by a congressional staff member.
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Toyota’s Smoking Gun?

22nd February 2010

The Wall Street Journal is reporting today that among the documents Toyota has turned in to the Congressional committee investigating acceleration-gate is a potentially damning document that apparently describes as a win their success in lobbying the National Highway Safety Administration (NHTSA) to limit the recall over sudden acceleration to only 55,000 units. The document claims the save to the company was $100 million. The document also claims other wins in eliminating other potential recalls, including the Tacoma pickup.

This is just the kind of “smoking gun” that Congress and safety advocates will say “proves” that Toyota intentionally put the company’s profits above the safety of its customers. Toyota said, “Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong. Our values have always been to put the customer first and ensure the highest levels of safety and quality. Our recently announced top-to-bottom quality review of all company operations, along with new quality initiatives and a renewed commitment to transparency are all designed to reaffirm these values.”

It is entirely inappropriate to take a page from a presentation out of context and use it like this. Of course Toyota cares about its customers – just about every company does. Just about every company also cares about its profits, and they should. It is likely that the Toyota employees that put the presentation together would regard saving $100 million as a good thing – who wouldn’t? They likely also thought that because they were successful in lobbying NHTSA to limit the scope of the recall, NHTSA agreed that more vehicles didn’t need to be recalled. Given what the letters NHTSA stand for, Toyota logically assumed that NHTSA would push for the recall if it deemed it necessary. It apparently didn’t, at least until the publicity of the San Diego law enforcement officer’s death made this a bigger, more public issue.

Did Toyota act perfectly? It seems not. But to take this piece of paper as proof that they willfully put the lives of their customers in danger is silly, and dangerous.

That’s what I think – how about you? Please leave your comments below. Thanks!

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Sweet Home…Tacoma?

15th February 2010

It’s getting a little hard to keep up with all of the Toyota recall news these days. Late Friday, Toyota announced yet another safety-related recall. This time it is for the Tacoma pickup. In some 2010 model year Tacoma 4WD trucks, the front drive shaft “may include a component that contains cracks that developed during the manufacturing process.  As those vehicles are used, the cracks may eventually lead to the separation of the drive shaft at the joint portion,” according to Toyota. Owners of the affected vehicles will be notified next month. Toyota says that there are approximately 8000 vehicles that have the potentially bad drive shafts.

The recalls are truly piling up now, and it’s hard to imagine how Toyota’s reputation can survive much more of this. As I’ve said before, Toyota literally built its reputation on the high quality of its products, and seemed to actively encourage its customers to think of their products as appliances, but appliances that never fail to get you where you are going. Because they have foregone trying to make any real emotional attachment to their products, how will consumers react now? You can get better quality and better styling, performance and prices elsewhere. Brands that come to mind are Ford, Chevrolet and Hyundai. This is clearly a case of living by the sword. Now the sword has turned on them, and they may die by it – or at least severely injured.

Toyota may find themselves answering this question from their customers, “If the big wheels don’t keep on turning, how will I get home to see my kin?”

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As expected, Toyota announced that it will, in fact, recall 133,000 2010 Priuses in the United States and about 300,000 in the rest of the world, for a total of 437,000 units worldwide. Toyota also included 14,550 2010 Lexus HS250h models as well, because they utilize the same anti-lock braking system as the Prius.

This picture speaks for itself. Note the Prius in the customer parking lot. Spotted today (9 Feb 2010) in suburban Detroit.

This picture speaks for itself. Note the Prius in the customer parking lot. Spotted today (9 Feb 2010) in suburban Detroit.

Toyota’s explanation of the problem is that “the anti-lock brake system (ABS), in normal operation, engages and disengages rapidly (many times per second) as the control system senses and reacts to tire slippage.  Some owners have reported experiencing inconsistent brake feel during slow and steady application of the brakes on rough or slick road surfaces when the anti-lock brake system (ABS) is activated in an effort to maintain tire traction.” They go on to say that the affected vehicles are safe to drive, as increased effort will stop the car.

The fix is an update to the software that controls the anti-lock brakes. This update was already introduced for Priuses in production last month. Toyota says the update will take about 30 minutes.

Hidden away in the release is another recall, this one for the 2010 Toyota Camry. This one is for brakes also, but is unrelated to the Prius/HS250h ABS problem. In the Camry’s case, some 4 cylinder units have a power steering pressure hose in the engine compartment that is the incorrect length. If this condition exists, a crimp on the power steering pressure hose may come in contact with a front brake tube. Should this condition continue, a hole may wear in the brake tube and deplete the brake fluid in the vehicle.  As a result, the brake pedal stroke will increase and lead to greater vehicle stopping distance. Owners will be notified within the next week or 2. If affected, your dealer will inspect and, if necessary, adjust the space between the brake tube and the power steering pressure hose crimp.  Based upon the inspection results, the dealership may need to replace the brake tube.

In yet another issue, the National Highway Traffic Safety Administration (NHTSA) is considering opening a formal investigation into the 2009-2010 Toyota Corolla. An analysis by Automotive News found that the Corolla has been the subject of 83 power-steering complaints to the National Highway Traffic Safety Administration since April 2008. Seventy-six of those reports note that the vehicle unexpectedly veers to the left or right at 40 miles an hour and up. The complaints compare the issue to hydroplaning or being hit by a strong wind gust. NHTSA is reviewing the complaints and will decide whether to open a formal investigation. Following NHTSA’s initial review, a formal investigation typically begins with a preliminary evaluation which, if warranted by the evidence, can be upgraded to an engineering analysis. A recall can follow. Toyota switched from hydraulic to electric power steering with its 2009 Corolla, which first went on sale in February 2008. This is in addition to another Corolla issue. Since November, NHTSA has been investigating reports of engine stalls in the 2006 Corolla.

Wow. That’s about all I have to say. Toyota’s reputation has taken a slide so steep and so sudden that it would have been unimaginable just a few months ago. It is not just the recalls themselves that are the problem, strangely enough. The American people have a very forgiving nature. As long as you give them a real, heart-felt apology and fix the problem, they won’t hold a grudge. By all reports, Toyota has dragged its feet and has had to be forced by the US and Japanese governments to recall the biggest problem (at least in terms of number of vehicles affected – the accelerator pedals). This is why the media has been all over these issues. Toyota’s handling of these issues will be studied by students and businesses for years to come as an example of what not to do. It will be interesting to see, going forward, how they step up and if these issues continue to haunt them.

That’s what I think – how about you? Please leave your comments below.

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The Slandy Report first told you about the Prius brake issue back in December, before it was known to most of the general public. Back then, they had only recalled 3.8 million vehicles for accelerator issues. That number is now over 8 million. Back then, Toyota was not the subject of congressional investigations for potentially withholding evidence of the safety defect and for stalling before doing anything about it. Now they are. Back then, their stock was trading in the US at almost $85. Now, Toyota’s market capitalization has lost about $18 billion, or more than 15% of its value in those 6 weeks. Apparently, much can happen in 6 weeks. The Lions, however, didn’t win anymore games. They still suck. But I digress.

Toyota acknowledged the Prius issue today with this release:

Toyota is aware that NHTSA has opened a Preliminary Evaluation centered on owner complaints of a braking issue with the 2010 model year Prius. Toyota will cooperate fully with NHTSA’s investigation.

Some customers have complained of inconsistent brake feel during slow and steady application of brakes on rough or slick road surfaces when the anti-lock brake system (ABS) is activated in an effort to maintain tire traction.  The system, in normal operation, engages and disengages rapidly (many times per second) as the control system senses and reacts to tire slippage.  A running production change was introduced last month, improving the ABS system’s response time, as well as the system’s overall sensitivity to tire slippage.

This preliminary evaluation addresses owner complaints specific to the 2010 Prius.  This condition is not related to either the floor mat entrapment recall or the sticky pedal recall currently in action.

Toyota will continue to evaluate the condition as it relates to owner complaints and will keep NHTSA informed of its progress.

Toyota Toyopet - see? They were known for green cars then, too.

Toyota Toyopet - see? They were known for green cars then, too.

At this rate, all of Toyota’s vehicles will be the subject of 1 or more recalls. Which is next, the 1957 Toyopet (the vehicle that launched Toyota’s sales in the US market)? It seems that Toyota can’t buy break (pardon the pun) these days. It seems that they are suffering from the same ailment that has infected the Detroit 3. for a long time, they could do no wrong and their sales were only limited by their ambition. They made the age-old error: they began to believe their own press. They have violated the basic tenants of their own systems that are the source of their great success to this point, believing they could violate them at will with no consequences. They were wrong.

That’s what I think – how about you? Please leave your comments below.

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Toyota’s New Math

3rd February 2010

Perhaps you’ve been following the news about Toyota’s “issues”. Perhaps, even, you know a bit about automotive design and engineering and can see through the PR-speak and the smoke screen that they tend to put up in front of the real truth. If so, then you have already come to the same conclusion that I have. Congratulations, but this column is not for you. This column is for the people who are taking all of the news in, and are confident that Toyota is the greenest, most altruistic company that has ever walked (several inches above) the Earth. Toyota makes the best cars and trucks anywhere, and this little glitch only proves that they’re human, even if all previous evidence indicates that their headquarters is not in Japan, but on top of Mount Olympus.

To recap, Toyota is recalling over 8 million vehicles around the world for 2 separate, but similar, problems. In some vehicles, the floor mats can interfere with the gas pedal and cause it to stay depressed even when the driver takes their foot off of it. The other is for gas pedals that, on their own, stay depressed when the driver intends to slow down. Different problems, same effect – the car doesn’t slow down when the driver intends it to slow down.

Toyota maintains that the floor mat issue is simple to fix – the mat just needs to be secured properly. In other words, customer error. Toyota is taking the step of recalling the affected vehicles to fix this.

Toyota's Pedal Fix

Toyota's Pedal "Fix"

In the other, Toyota blames the pedal itself, and said a few days ago that it has a fix for cars on the road. A small metal part will be inserted into the accelerator pedal assembly to make sure that the pedal’s springs will work as intended and force the pedal up when the customer takes their foot off.

So far, so good, right? Wrong. Toyota says only the pedals made by CTS, an Indiana supplier, are affected. Pedals made by the other supplier, Denso, are not. Denso, by the way, is partly owned by Toyota. In the world of automotive purchasing, such an arrangement is called “dual-sourcing” (as opposed to “single-sourcing”). Two (or more) companies make the same part for the same vehicle from the same set of specifications from the automaker, and are used interchangeably. Neither Toyota nor the government has indicated that CTS is to blame in any way, but only its pedals need to be fixed, not Denso’s. The pedal design is to blame, according to everybody. If it’s a design issue, then why are Denso’s parts not part of the problem?

Something doesn’t add up.

Next, the issue being “fixed” is being called unintended acceleration, as in “the car keeps going faster than I want it to.” No matter if you’re talking about the floor mat issue or the pedal issue, neither one will make the car or truck go faster. The both would prevent the car from slowing down. Big difference. To be fair, to a panicking driver, these would likely feel very much the same, so maybe this is a case of a badly worded problem. However, if that were the case, wouldn’t Toyota or the US government use the proper wording when describing the problem? If the cars are, in fact, accelerating, Toyota’s “fix” won’t “fix” anything. It will simply pacify the masses while they really try to figure out the problem. If they really are accelerating, then the problem is likely to be in the vehicle’s electronics, in the software code that makes modern cars and trucks (usually) so reliable and fuel-efficient. Toyota itself said during a meeting with a congressional committee that “…sticking accelerator pedals are unlikely to be responsible for the sensational stories of drivers losing control over acceleration as their cars race to 60 miles per hour or higher.” In addition, there have been reports of the acceleration issue in vehicles that are not subject to either recall.

Something doesn’t add up.

Also, less than 2 weeks ago, Toyota said it did not know what the problem was, nor how to fix it. Yet on Monday, February 1, Toyota announced the fix, complete with a diagram, saying, “Toyota’s engineers have developed and rigorously tested a solution…” Toyota went from still investigating to a “rigorously tested” solution is less than 2 weeks. Just how “rigorous” is this solution?

Something doesn’t add up.

If the “solution” is so good for the cars already on the road, why then is the solution for cars and trucks yet to be built different? That’s right, kids, CTS is already making a redesigned accelerator pedal for the factory to use after they are back up and running next week. It is NOT the same pedal with an extra part inserted, as described above for cars on the road. Why?

Something doesn’t add up.

If the various “fixes” that Toyota is implementing do not correct the problem, they will have a PR problem that will make the Pinto look like a schoolyard argument. And something else won’t add up, either. Toyota’s sales and profits.

That’s what I think – how about you? Please leave your comments below.

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The Sharks Begin Circling

28th January 2010

Toyota’s problems seem to multiply everyday. The latest in the saga of Toyota’s quality issues involves other car companies, namely General Motors and Ford. Yesterday, GM added an extra incentive to its existing ones specifically for Toyota and Lexus owners, giving them an extra $1000 which they can apply in three ways: 1. Those who choose to lease a vehicle may waive three payments for up to a total of $1,000. 2. Qualifying customers who are financing a vehicle purchase can receive 0 percent financing for up to 60 months. 3. Cash buyers can receive $1,000 off their purchase. It is noteworthy that GM did not “announce” this new incentive. They didn’t want to appear like they were gloating over Toyota’s situation. Ford followed suit shortly thereafter, but with a twist. Ford’s program targets people who own Honda, Acura, Toyota, Lexus or Scion vehicles that are 1995 models or newer. The owners of eligible vehicles would get $1,000 for trade-in assistance on either a purchase or lease of a new Ford, Lincoln or Mercury vehicle. That money is stackable on any other incentives already on a Ford Motor product.

In straw #2, the suppler of the pedals in question, CTS, (sort of) fired back at Toyota. Toyota, you might remember, was quick to drive a bus over CTS by naming them as the supplier of the faulty pedals, prompting some reporters (me) to question where the buck stops at Toyota. Mitchell Walorski, head of CTS Corp. investor relations, said the Elkhart, Ind., supplier is not part of the problem. CTS has “no knowledge of any accident or injury” stemming from the accelerator assemblies it supplies Toyota, he said. Walorski told Automotive News that CTS engineers are assisting Toyota, “but this is their recall.” CTS was not consulted about Toyota’s decision to issue the recall or to halt certain vehicles’ sales, he said.

In straw #3, the National Auto Auction Association announced that all of its member auctions would be required to make an announcement concerning the affected vehicles at their auctions. This is regular procedure for any auctions that have issues, and NAAA said Toyota is no different. The reason is simply full disclosure so everybody knows what they are getting. The impact is that Toyota’s residual (resale) values just took an immediate and substantial hit, which will affect trade-in values and, further down the road, lease payments. A lower residual value makes the lease payment higher, absent additional incentives. So lower residuals will hurt sales (especially leasing) or make them more costly to Toyota.

Straw #4 is an update to #3. The NAAA changed course and advised its member auctions to halt the selling of the affected Toyota models until the issues are resolved. This takes the ramifications in #3 and magnifies them significantly.

Straw #5 concerns rentals. All of the largest rental companies –  Hertz, Enterprise, Alamo, National, Avis, Budget, Dollar and Thrifty – all said they would stop renting vehicles covered in the recall.

In Straw #6, Toyota yesterday said it would recall an additional 1.1 million autos in the United States to fix floor mats that may jam accelerator pedals and cause unintended acceleration. The action is an extension of last fall’s recall, in which Toyota recalled 4.3 million vehicles in its largest-ever U.S. safety action. Today’s amended recall involves 2008-10 Highlanders and 2009-2010 Corollas, Venzas, and Matrixes, Toyota said in a statement. The action also covers 2009-2010 Pontiac Vibes made in a joint venture with General Motors Co. This brings the total units recalled for the 2 separate problems to over 6 million.

Lucky Straw #7 goes overseas. Toyota announced that it will extend the recall to an estimated 2 million units in Europe and about 75,000 in China. Let’s see, that now makes over 8 million units worldwide, about the same as Toyota sells worldwide in a year.

For Crazy Straw #8, Ratings agency Fitch, placing Toyota on watch negative, said the recalls and production suspension damaged Toyota’s reputation for quality and could hamper its recovery. If they ultimately lower Toyota’s credit rating, this will make borrowing to fund operations more costly. If it is only a short-term hit, then it will be unlikely to affect Toyota very much, as Toyota has more cash on hand the the pharaohs did.

I wonder if the camel’s back is getting weary yet?

As you might expect, all these straws are having an effect on Toyota’s stock. It has fallen over 15% since last week, reducing the camel’s market capitalization by $25 billion. That’s not going to make the shareholders very happy.

That’s what I think – how about you? Please leave your comments below.

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