Toyota Recall Analysis
Toyota Recall Analysis
Toyota Recall Analysis
REPORT ON
ETHICAL ANALYSIS OF
BEHAVIOUR
ETHICAL UNETHICAL
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Ethics is the accepted norms and behavioral set of the group of people. The
norms and acceptable behaviors are very subjective and not absolute. They differ
as the culture, religion and country differs. Even in the different organizations the
ethical norms vary a lot.
But even though ethical norms are not universal, ethic is universal. In the business
world also the customers also expect the ethical behavior from the company’s
employees and top management. The top management of any organization is the
maker of the ethical behavior in the company by setting the policy and
disciplinary rules.
This report gives the analytical view about the ETHICAL BEHAVIOUR of the top
automobile company-TOYOTA.
We all know about the recall of around 9.5 million cars (4.1 million cars, involves
potentially sticky gas pedals and 5.4 million cars whose gas pedals could get stuck
on floor mats) by Toyota in 2009.
To connect the class room theories wiyh the practical business world is very
important. This is true for all the field of education.
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We are really thankful to Prof. Pathik Variya to give the inspiration to connect and
analyze the ethical behavior of Toyota Company.
We really understand that how difficult is to judge the behavior of Toyota from
the view point of ethics. But thorough understanding of theoretical aspects helps
in analyzing Toyota recall issue. And the credit goes to Prof. Pathik Variya.
2 Ethical Or Unethical? 8
3 Issue Intensity
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4 Utilitarianism
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6 Human rights 15
10 conclusion 21
11 Bibliography 24
TOYOTA RECALL is the going on discussion in the automobile world. Being the
number one automobile company in the world, to recall cars more than one time
because of the defects is a major issue. It badly affects its brand value, the trust of
the customers and the reputation of the organization. Experts have given five
critical lessons on this whole issue.
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But this issue involves the damages, injuries and death of human beings, it is
necessary to evaluate this issue from the view of Ethics.
The delay in recall of the 9.5 million cars in 2009 and repeated problems of
defective parts in car is a major concern. Because of such defects like sticky gas
paddle, floor mate there are many injuries and death. Hence it is necessary to
look up at the whole issue at the ethics point of view with reasonable care.
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Before let us have a look at other unfair practices carried out at
Toyotas plants.
Toyota’s manufacturing plants back home in Japan resemble some of the
worst sweat shop in the world.
Their operation plant have been described as “slavery” & “human
trafficking”. Toyota has thousand of “Karoshi” claims each year. This team
means “over worked to death”.
Their plants have very suicide rate as well and when an injury has occurred
to an employee, on the job they are layer off, and receive no
compensation.
So it shows that Toyota is lacking in protecting the human rights & safety of
their own employees in the organization which is against the law of
government.
Toyota is well known for their union busting, which has destroyed many
small countries around the world and reducing the standard of living
amongst the countries citizens.
There are already 1800 instances in the US where employees at the
Kentucky plant have been injured fired and they disappear from the
compensation pay roll.
This happen at the rate of 400 Americans per year working at Toyota.
Toyota builds their plants in the poorest state to take the advantage of the
lowest wages in the country. Many workers have been kept as temporary
workers for over 4 years.
The above points show that Toyota is not an ethical organization. It does not care
for its employees safety and health. Because of its bad labor policies the suicide
rate is very high, and it is unethical from the view of human rights and
justice/fairness.
In cases such as this, investigators almost always start with two time-worn
questions.
To evaluate the issue from the ethical point of view we need to get the answers of
the above questions.
Whether the Toyota’s behavior is ethical or not we need to look at this issue from
the following 4 theories of ethics.
1. Utilitarianism
2. Justice and Fairness
3. Human rights
4. Integrative social contracts
But before that we need to look at and decide the issue intensity of this issue.
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ISSUE
INTENSITY
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Benefits
(profit) This delay has saved $124 million
50,000 man hours can be saved
The financial loss to the company by
way of compensation to the injured
people if Toyota accepts its fault and
recalls 9.5 million vehicles.
According to right to justice the Toyota must follow the following guidelines:
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Organizational rules are enforced fairly and impartially and follow
all legal rules and regulations.
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According to human rights Toyota must have done the following:
1) Toyota has violated the right of life and safety and due process of its
customers by providing unsafe cars with defects fo sticky gas paddle and
floor mates.
2) Also Toyota has made delay in call back of that defective vehicals and tried
to avoid the investogation of the problem.
Based on integration of the general social contract and the specific contract
between community members the company needs to work
When do we hold people Morally Responsible for their Acts and their Effects?
When the person
KNOWINGLY and FREELY
Performed or brought about an action/effect which was morally wrong for the
person to perform/bring about.
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Toyota at last has admitted that it has purposely neglected safety concerns
and delayed recall investigation to save money.
According to an article released by the ‘Associated Press’ it is confirmed
that Toyota not only dragged its feet when looking into safety defects, but
also patted itself on the back for doing so. Other evidences also prove that
Toyota has purposely and repeatedly delayed safety regulations by avoiding
defect investigation and obstructing government inquiries into safety
concerns.
The Associated Press also states that Toyota has the financial benefits of
delay. This delay has saved $124 million and 50,000 man hours.
Toyota was very well aware about this problem. We can say this because
Toyota has the mantra of ‘KAIZEN’ or continuous improvement.
And one research also states that 73% of the employees of any company
are very well aware about the unethical or wrong practices carried out in
their company. Hence the managers and top managements are definitely
aware about this problem.
Instead they somehow found a way to justify negotiating with the
government to make their problems disappear. At the same time Toyota
was producing new vehicles with known safety flaws and advertising their
vehicles to be the safest and highest quality vehicles.
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Now, we need to focus on whether the individuals are responsible held or the
corporate as a whole?
Utilitarianism Unethical
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Toyota Recall Timeline
1986
• In September, NHTSA orders its first recall of Toyota cars because of “speed control”
problems related to a faulty cruise control system in models as far back as 1982. A second
investigation into sudden-acceleration dangers with Toyota vehicles takes place that same year.
1999
• Toyota recalls the popular Lexus RX for problems with an electronic control unit that causes
the headlights and taillights to turn on and off without warning.
2000
• Toyota discontinues using mechanical linkage in their throttle systems in favor of an electronic
throttle control system.
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2003
• In February, NHTSA conducts the first of many defect investigations regarding speed control
problems. The first two involve the Camry and Solara models.
• In April, Toyota internally deals with an “unwanted acceleration” incident during the
production testing of the Sienna model.
2004
• In March, after another customer petition, NHTSA opens a wider probe into Lexus Sedans.
NHTSA also informs Toyota that the agency is opening an investigation into unwanted
acceleration and vehicle surge complaints in 2002-2003 Camry and Solaris models. Toyota’s VP
for regulatory affairs, Christopher Tinto, and another of his employees Christopher Santucci,
“work closely” with NHTSA and manage to narrow the investigation to 11 incidents involving 5
crashes. Both Mr. Tinto and Mr. Santucci are former NHTSA employees.
• In July, NHTSA closes its investigations again, claiming no defects were found. NHTSA turns
down two more requests from owners for new looks at the problem. NHTSA cites lack of
resources as the reason for that decision.
2005
• In August, NHTSA conducts an evaluation of the Camry after reports of “inappropriate and
uncontrollable vehicle accelerations.”
2006
• By January, NHTSA had opened a second investigation and had received questionnaires sent to
Camry owners. Hundreds are returned from owners with reports of problems of acceleration and
braking. NHTSA says the claims are of “ambiguous significance” and closes the investigation.
• Toyota group global sales of 8.808 million vehicles exceed GM’s by 128,000, making it the
world’s biggest automaker.
• In August, NHTSA receives more complaints about the accelerator issues with the Camry
models that covers model years from 2002-2006.
• In September, NHTSA opens a third investigation. Another Camry owner petitions the
administration to investigate multiple “engine surging” incidents he experienced.
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• Toyota’s Tinto writes NHTSA and says that Toyota found no abnormality in the throttle
controller and blames water damage from driving in heavy rain as the reason for any problems
that might exist.
• NHTSA fails to identify the problem and closes the investigation citing “the need to best
allocate limited administration resources” as the reason for the closure. Again – even if true –
very strange.
2007
• In March, NHTSA launches probe into floor mats in Lexus models. Toyota says “issue is not a
safety concern.”
• On July 26, for the first time, NHTSA verifies fatal crash link to floor mats. Toyota eventually
settles with the family for an undisclosed amount.
• In August, NHTSA upgrades its investigation to an “engineering analysis.” This means the
agency will do vehicle testing instead of just reviewing complaints or single vehicles and
crunching questionnaire numbers as done in the past.
• In September, under pressure from NHTSA, Toyota recalls 55,000 Camry and Lexus models
because of suspected floor mats that interfere with the accelerator pedal.
• Documents now obtained from Toyota show that the carmaker noted that it had saved $100
million by conducting a limited recall as opposed to a full recall. The company said that
was a “win.”
2008
• In August, after an eight month review, NHTSA closes the Tacoma investigation, claiming to
find no defect despite hundreds of complaints. This is the eighth investigation of Toyota
vehicles since 2003. Over 2600 complaints of Toyotas and “run away cars” have been
reported. 271 of these complaints were rejected by NHTSA without even asking Toyota for
data.
2009
• In April, NHTSA receives another petition, this one to investigate throttle-control problems
unrelated to floor-mat issues in the Lexus ES vehicles.
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• In August, the fatal crash of a Lexus ES350 in California kills four people. NHTSA quickly
links this incident to floor mats.
• In October, Toyota recalls 3.8 million vehicles related to the floor mat issue.
• In November, Toyota expands the floor mat recall by over a million vehicles.
2010
• On January 21, Toyota issues recall for 2.3 million vehicles for sticking accelerator pedal.
• On January 26, Toyota halts production and stops selling eight models under pressure from
NHTSA.
• On January 27, Toyota expands the pedal recall by 1.1 million vehicles.
• On February 5, Toyota admits problems with brake software in 2010 Prius Hybrids.
• On February 8, Toyota recalls 2010 Prius, 2010 Lexus HS 250h, 2010 Camry Hybrids, and the
Sai (sold only in Japan) due to faulty brake systems. This recall affects 437,000 vehicles
worldwide.
• On February 12, Toyota recalls 2010 Tacoma due to a dangerous drive shaft condition.
• On February 16, Toyota begins to “look into” steering problems with its Corolla models.
• On February 18, it was learned that NHTSA had excluded eight early reports of deaths linked
to the sudden acceleration problem. That may well bring the total deaths to 42.
• On March 11, Toyota officials were forced to turn over a memo produced by its own factory
workers in 2006, which raised their fears about safety issues in the manufacturing process. The
memo is a “smoking gun” that proves management was made aware of a looming disaster due to
an emphasis on profits over production standards.
• On March 24, new evidence emerged revealing that both Toyota and the National Highway
Traffic Safety Administration knew that reported sudden acceleration incidents were linked to a
glitch in the vehicles’ electronic system. In August 2002, Toyota Motor Corp. issued a Technical
Service Bulletin warning every dealership in the country that Camrys were reportedly surging
out of control and that recommended adjustments to the electronic controls could fix the
problem. Toyota also sent the bulletin to NHTSA, which issued an internal memo
acknowledging Toyota unintended acceleration (UA) in 2002 and 2003 Camrys. The document
was never made public until a group of attorneys submitted a copy of it to CNN.
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• On April 8, an internal e-mail was uncovered, in which from Irv Miller to a Japanese colleague,
dated Jan. 16 of this year. At the time, Miller was Group Vice President, Environmental and
Public Affairs, one of the company’s top spokespeople. In the email, Miller says, “I hate to break
this to you but WE HAVE A tendency for MECHANICAL failure in accelerator pedals of a
certain manufacturer on certain models.” (These words were capitalized in the email.) He goes
on to say, “We are not protecting our customers by keeping this quiet. The time to hide on this
one is over” and says, “we need to come clean.”
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List of Recalled Toyota models
Toyota has recalled more than 9 million vehicles worldwide amid concerns of sudden
unintended acceleration
2010 Tacoma
2005-2010 Avalon
2007-2010 Camry
2009-2010 Corolla
2008-2010 Highlander
2009-2010 Matrix
2004-2009 Prius
2005-2010 Tacoma
2007-2010 Tundra
2009-2010 VENZA
2006-2010 Lexus IS 250
2006-2010 Lexus IS 350
2007-2010 Lexus ES 350
Vehicles recalled for both floor mat and sticky accelerator pedal:
NOTE: The NHTSA is investigating 2009-2010 Corollas for reported problems involving loss of
steering control. A recall has not been announced, but these vehicles may be inspected for
steering defects when they are taken to dealerships for floor mat and accelerator pedal repairs.
The following vehicle is being recalled due to possible cracks in the joint portion of the drive
shaft:
The following vehicle is being recalled for frame rust inspection and possible repair:
The following vehicles were recalled for a software update for the anti-lock brake system
(ABS):
2010 Prius
2010 Lexus HS 250 h
Additionally, 7,300 2010 model year Camrys have a brake hose defect that could lead to greater
vehicle stopping distances.
Sienna
Yaris
4Runner
FJ Cruiser
Land Cruiser
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1. http://www.scribd.com/doc/31604081/Ethical -Issues-on-Toyota , 10 Aug, 2010
2. http://www.NHTSA.com/doc/546/inq_toyotarecall date- 12 Aug 2010
3. Brand Management Strategy, ‘Critical lessons from Toyota Recall’ p. 13 of Richard Hood.
4. Reading materials provided by Prof. Pathik Variya, Faculty at DDU, Nadiad
5. http://www.designnews.com/article/446480-Toyota_s_Problem_Was_Unforeseeable.php, 13
Aug 2010
6. http://articles.latimes.com/2010/jan/30/business/la-fi-toyota-pedal30-2010jan30, 12 Aug
2010
7. http://business-ethics.com/2010/01/31/2123-toyota-recall-five-critical-lessons/, 12 Aug
2010
8. http://hosted.ap.org/dynamic/stories/U/US_TOYOTA_RECALL?
SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT, 13 Aug 2010
9. http://www.ctscorp.com/publications/press_releases/nr100127.htm, 13 Aug 2010
10. http://www.rmmag.com/MGTemplate.cfm?
Section=RMMagazine&NavMenuID=128&template=/Magazine/DisplayMagazines.cfm&IssueID=
344&AID=4080&Volume=57&ShowArticle=1, 13 Aug 2010
11. http://www.toyota-lawsuit.com/toyota-recall/toyota-recall-timeline/ 13 Aug 2010
12. http://www.toyota-lawsuit.com/toyota-recall/list-of-recalled-toyota-models/ 14 Aug 2010
13. http://www.reuters.com/article/idUSN3024383920100430, 14 Aug 2010
14. http://money.cnn.com/autos/storysupplement/toyota_timeline/ 14Aug 2010
15. http://findarticles.com/p/articles/mi_qa5427/is_201007//ai_n54363580/ 14 Aug 2010
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