On Aug 26, 2010, Toyota announced two recalls affecting Corollas and Matrixes, one for engine stalling problems  and one for the power brake issues. Customers are already outraged at the plans to deal with the power brake recall. These new recalls are negatively affecting Toyota’s Quality Reputation. Toyota’s stock has dropped 25% since the beginning of the year.

1. Engine Stalling problems

The Engine Stalling recall affects 1.13 Million 2005 – 2008 Toyota Corolla and Matrix front wheel drive models with a 1.8 liter 4 Cylinder Engine (type 1ZZ-FE) in the US and Canada. An engine control module may have been improperly manufactured and a crack may develop on certain parts used to protect circuits against excessive voltage. The result could be
a. Check Engine light may light up
b. Driver will notice Harsh Shifting
c. The engine may not start
d. The engine could stop working while the vehicle is being driven.

Since the Matrix and the Pontiac Vibe Hatchback are manufactured in a joint venture in California, this recall affects about 200,000 Pontiac Vibe owners as well.

The stalling problem has been under investigation since November 2009 with the US National Highway Traffic Safety Administration (NHTSA). One hundred and sixty three complaints were received by NHTSA, including six crashes that were thought to be caused by the stalling problem.

According to a USA Today article Toyota has known about the Engine Control Module problem for 2 1/2 years.  In November 2007, Toyota issues a Technical Service Bulletin (TSB) to its dealers advising them to replace the Engine Control Module with an improved one, in 2005 to 2007 Corollas and Matrixes,  to fix complaints from customers.

In a March 2, 2010  letter to NHTSA, Toyota said it “does not believe that the alleged defect creates an unreasonable risk to motor vehicle safety.” The automaker said the flaw, due to faulty parts from suppliers, affects 0.8% of the vehicles. Toyota acknowledged that some drivers would be “inconvenienced” by stalling, but said the alternative is allowing the engine to run during the fault and possibly fail or catch fire.

This letter is not in the spirit of an organization trying to regain its reputation as a quality manufacturer. This letter implies cover up and making excuses. There are some interesting comments from Toyota drivers who were affected by stalling.  See Safety officials look into Toyota Corolla stalling issue and look at the comments section. Stalling can be very dangerous (in an intersection, at a railroad crossing, on a highway).

On August 18th, 2010 NHTSA upgraded its investigation to an engineering analysis, a step that can lead the agency to demand Toyota issue a recall. NHTSA’s more advanced investigation appears to have prompted Toyota to issue the recall.

That doesn’t say much for the image Toyota is trying to convey that they care about their customers’ safety.

2. Power Brake Issues

In a less publicized recall, on the same date, Aug 26, 2010, Toyota issued a press room release about a voluntary safety recall of about 95, 700 Toyota and Scion vehicles sold in the US.  Selected models of the 2009 and 2010 Toyota Corolla and Corolla Matrix and 2008 and 2009  Scion  xD vehicles with a 1.8 liter engine are affected by the recall.     The recall is being issued to address possible braking problems at extremely low temperatures, where possible moisture leaked into the braking system can freeze, reducing the power assist and ultimately lengthening vehicle stopping distances. As part of the recall, Toyota will install a new intake air connector. I expect to see something from GM for the possible recall of Pontiac Vibes for similar problems.

Here’s the bad news

Since this condition only takes place in extremely low temperatures, Toyota is only willing to fix (for free) the selected models above in 19 states:

1. Alaska
2. Colorado
3. Idaho
4. Illinois
5. Iowa
6. Kansas
7. Maine
8. Michigan
9. Minnesota
10. Montana
11. Nebraska
12. Nevada
13. New Hampshire
14. New York
15. North Dakota
16. South Dakota
17. Vermont
18. Wisconsin
19. Wyoming

Reactions from some owners is outrage.  In the comments section of this article titled Toyota Recall of Corolla, Corolla Matrix, and Scion xD vehicles owners complain that cars are mobile and people drive their cars from warmer climates to go skiing and would be subject to these extreme weather conditions. Others suggest that other states get freezing temperatures too should be added to the 19 states. There is even some talk in the comments about possible class action suits.

Clearly Toyota hasn’t thought this one through. I think the strongest case is that a car is mobile. It can go anywhere. Everyone who owns an affected car should have the option to get it brought up to safety standards.

Summary:

The two most recent recalls and their history (see the Toyota recall website)  and implementation are not, in my opinion, going to improve customer confidence in Toyota’s quality reputation. This can only hurt the future of Toyota’s sales and the value of its stock price.

What is your opinion? Please join the conversation by posting your thoughts below.

Uncategorized

The following two tabs change content below.

Adele Berenstein

Adele Berenstein is an Experienced Customer Satisfaction Executive, recently retired from a Large Global IT Organization after a long productive management career including Sales, Marketing, Services, teaching and education center management and most recently, 19 years in customer satisfaction management. She turned around divisions with customer satisfaction problems, implemented measurable improvements and management systems, and implemented programs to prevent problems from ever affecting customers.

Leave a Reply

Hide me
Sign up below to receive a Free Report (Retail Value $150.00)
Name: Email:
Show me