Toyota, Ethics and Compliance

Toyota Logo

With Toyota’s problems all over the news, I started to think about whether compliance and ethics professionals could learn anything from these problems.

To begin, I don’t think there is a systemic problem with their vehicles or with the company. I think the sudden acceleration problem is bunk.

Yes, I own a Toyota, but my Tundra has not been implicated.

Numbers

It is unfortunate that people have died in Toyotas. About 56 people have died in accidents involving Toyotas that allegedly accelerated out of control. That anyone has died or been hurt is difficult to face.

But lets put that number in perspective.  Over 34,000 people died in car crashes in 2008 and over 2 million people were injured.

Over 10,000 of those deadly crashes in 2008 involved alcohol impaired driving. That means you were at least 100 times more likely to be killed by a drunk driver than sudden acceleration.

From an ethics perspective, you obviously don’t want to sell a product that is defective or even a little more likely to injure your customers. Of course, that assumes there is a defect in the product and it’s not just a big pile of media hype.

Look back at Audi

We have seen this situation before. Twenty years ago it was Audi. The reports on Audi suffering from sudden acceleration nearly destroyed the automaker in the late 80s.

They never did find a problem with the Audi cars. Audi was never able to counter the outcry against their cars.

Is there really a problem with the cars?

Surely, the throttle of a car could get stuck open and cause the car to accelerate. Cars are increasingly run through electronics that control the fuel levels and throttle of the car. Floor mats can get stuck on the gas pedals. Cruise controls can malfunction. For any number of reasons, a car could accelerate without the driver’s input. (With Audi, the assumption is that the driver stepped on the gas pedal instead of  the brake pedal.)

But what about the brakes?

Car and Driver ran some tests for unintended acceleration. Even with the throttle held wide open, if you stepped on the brakes your car would stop in roughly the same distance.  In a normal situation, they stopped a Toyota Camry from 70 mph to 0 in 174 feet. With the throttle held open it took 190 feet to stop from 70 mph.

The brakes were not as successful for the hugely powerful Roush Stage 3 Mustang with 540 horsepower. It required an extra 80 feet to stop with all extra horsepower was fighting the brakes.

Even if the engine in most cars suddenly accelerates, the brakes should stop in it roughly the same distance.

However, if you pump the brakes, you may lose the vacuum boost needed for the power assist and have a hard time stopping the car. Prior to anti-lock braking systems, we were taught to pump the brakes in slippery conditions.

Another possibility is that the car could have suffered a brake failure at the same time the throttle failed.

Driver error

One way to deal with sudden acceleration is to disconnect the engine. With a manual transmission you step on the clutch and with an automatic you shift into neutral. (I’m not sure that I would have thought to do that if my throttle got stuck.  I would now.)

With Audi, they main theory was that people were stepping on the gas when they thought they were stepping on the brake.

As for the runaway Prius a few days ago, he could have pumped the brakes and lost the power assist needed to stop the car, or had a simultaneous failure of the brakes and the throttle. (Or he could have faked it.)

Systemic failure

What Toyota needs is a way to avoid systemic failure. It’s really bad to have the throttle and the brakes fail at the same time.

What Toyota needs is a throttle kill switch. When you step on the brakes, the electronic throttle control will cut the throttle and cut the power. In the Car and Driver test, they tried an Infiniti G37 that had the throttle kill and its braking distance barely changed. Many cars have this throttle kill mechanism, but not all.

Having a safeguard for a systemic failure is good thing from a compliance and risk management perspective. By having a throttle kill, it’s easier to point to operator error. (“If you had stepped on the brakes, the engine throttle would have released.”)

What about the conflict of interest?

One problem with a government investigation of Toyota is the inherent conflict of interest the United States government and the taxpayers have in the automobile industry. We own a competitor to Toyota. It would be good for the U.S. ownership in General Motors for Toyota vehicles to be less popular.

I was very disappointed to see Mr. Toyoda flogged in front of a Congressional panel. To some extent, he was being yelled at by the board of directors of GM.

Lessons

In the end, I believe the Toyota story is one of a failure of crisis management and not one of ethics or compliance. It seems like Toyota was not able to quickly gather the facts and act on the facts. They keep announcing recalls, without explaining the problem or the fix.

Every company action made in error is magnified under the white hot lights of the media looking for stories. We the taxpayers and our government has a big conflict of interest in attacking the company without a good set of facts.

The failure of crisis management is going to cost them. There will be shareholder class action lawsuits, driver lawsuits, owner class action lawsuits, the cost of recalls and the long term damage to the company’s image.

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