Paige Sweet

FI 311

Professor Kim

18 May 2020

Toyota’s Scandal

In the past decade Toyota has not seen many scandals. This may be because they are still

recovering from their last scandal. The company had a recall in place from 2009-11. Several of

the cars, from the Lexus and Toyota segments. There were more than 12 million vehicles that

were recalled during this time-period. In this time Toyota was deceitful and told their customers

many things that are false and they did not take ownership of the problems.

In 2009, the problem was first reported in California, a family of four called the police

and reported that the breaks were not working, and that the car was accelerating on its own. This

family was the first casualty. In total there was 19 deaths. After the first deaths reached national

news the company was forced to address the policies of the events that were happening because

the nation started playing close attention.

In October 2009, Toyota sent letters to their customers telling them to expect a recall, but

they had not detected any problems. The company when they started sending the letters only sent

it to certain people and not to every car that was susceptible. One of the engineers stated that the

car that was bestselling that had the issue was the corolla, but they were not featured when the

company was sending letters to consumers so that they could become aware of the problem.
 This was the reason that there was a class action suit, that because the company misled

the public to the size of the problem, they then are liable for an injury or death that occurs from

the problem. Toyota then acted to the problem by having a recall in the floor mats of the cars

having many of the cloth ones be replaced by rubber ones, hoping that this would solve the car

problems.

The American media was focused on the first family who died, while the Japanese news

companies began reporting things that then were being contradicted by Toyota. Toyota began

facing backlash for the transparency issues, they stated they only issues that share with the public

as “community service” or when they are ordered by a judge.

Repeatedly NHTSA (National Highway Traffic Safety Administration) was reporting

things differently than what Toyota was telling the public. In the court case that was started and

published by the US government they preceded to state that the company used misleading

statements and lies that made Toyota less at fault.

In the court case that was filed, they were facing several felonies in a criminal case. The

charges were then dropped when the company reached a deal that they would have an

independent contractor travel through checking all of the safety requirements for the company as

well as being on probation for 3 years where every deal that they strike will be closely monitored

to make sure that they had no more serious infractions.

The company faced backlash from these problems, this is because Toyota was not

genuine and that they continually were breaking the trust that they had built and they lost money

in both the stock of the company and in their goodwill.

Sources:

https://www.abc.net.au/news/2014-03-20/toyota-pays-1-3-billion-for-defect-cover-up-

statements/5332894?nw=0

https://www.motortrend.com/news/toyota-recall-crisis/

https://www.justice.gov/opa/pr/justice-department-announces-criminal-charge-against-toyota-motor-

corporation-and-deferred