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INTRODUCTION
In 2005, Lupe Lee bought a new Toyota Camry from a local Sunnyvale, California, Toyota
dealership, donating her immaculate Camry bought in 1990 to a local charity. Going from an older
Camry model to a newer one, it was obvious that Lupe not only liked Camry cars, but she liked
Toyota and its business model. However, this was all about to change on September 9, 2011.
On this day, Lupe and her daughter were on their way to Berkeley for a nieces wedding. They
planned to stop in Burlingame to pick up Lupes sister, Rose. They arrived at the sisters apartment
early, so Lupe and her daughter went inside.
After visiting in the apartment for a time, the three of them went out to get into the Camry to
continue on to Berkeley. Lupe would have to make a U-turn to head back towards the freeway.
Instead, she decided to manoeuvre into a nearby driveway to turn around. This is when things
began to go horribly wrong; as they started up the driveway, the car began accelerating. Rose
exclaimed Lupe! What are you doing!? Why are you going so fast!? Push on the brake! Lupe had
no control of the car; she was terrified. She tried desperately to press the brake, but nothing
happened. She quickly realized that the car mat had been lodged under the gas pedal forcing the
car to accelerate and making it impossible for her to slow down.
Her Camry crashed through the garage doors at the end of the drive, and Lupe had to think quickly
about what to do next (reference Exhibit A for the crash visual). She knew that if she kept going
straight, she could go through the wall into someones apartment, which had the potential of
resulting in a serious or fatal injury to the occupants. Seeing her sisters large and sturdy Toyota
Land Cruiser parked nearby, Lupe decided the only way to stop her car was to smash into it. She
hit the Land Cruiser, pulled on the emergency break, took the keys out of the ignition, and they
were finally at rest.
They got out of the wrecked car trembling and confused as to what had happened. Lupe called the
fire department to inspect the garage, and a tow truck company to deal with the car. While they
waited for the fire department to arrive, Rose mentioned to Lupe that she had heard something on
the news about Toyotas cars experiencing unintended acceleration problems. Lupe replied, Maybe
this is the same thing, I dont know. But all I do know is that I am never going to drive this car or
another Toyota car ever again. My old Toyota never had any problems; I thought that they were
Case Study: Toyota Inc. (2013)
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Marshall School of Business, University of Southern California, Center for Management Communication (2013)
known for the quality of their cars. But, if more people with Toyotas are having problems similar
to what just happened to us, I wonder what has gone wrong with Toyota and why they didnt let
me know about the danger. (Lee & Sandlin, 2012)
COMPANY BACKGROUND
Lupe was not alone in her perception of the quality of Toyota cars. The automaker had
become the largest automaker in the world based on that reputation. In fact, West Virginia
Senator John D. Rockefeller IV said he had worked very hard to bring a Toyota engine and
transmission plant to Buffalo, West Virginia, because I knew Toyota was a company built
on the philosophy of quality first. (US03, 2010:02) However, after Lupes story and many
similar incidents across the country, it became clear that, as Rockefeller noted,
Somewhere along the way, public safety took a back seat and corporate profits drove the
companys decisions. (US03, 2010:02)
In the year 2000, Toyota recalled 8,379 vehicles, which accounted for just 0.034% of all
cars recalled that year (US03, 2010:03). In 2010, a decade later, 4,872,583 Toyota vehicles
were recalled more than any other auto manufacturer that year. This made Toyota
responsible for 29.7% of all vehicles recalled in 2010 (US03, 2010:05).
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During the Senate Commerce Committee hearing March 2, 2010, Senator John D.
Rockefeller IV pointed out that Transportation Secretary Ray LaHood, the head of the
department that oversees the National Highway Traffic Safety Administration, had
testified that Toyota was safety deaf and didnt respond to [his] concerns until [he]
personally called Mr. Toyoda in Japan. (US03, 2010:27)
PUBLIC RELATIONS
Toyota was afraid of experiencing the same outrage from its customers that it had
experienced from the government. Its good reputation had been garnered from excellent
customer service and top-of-the-line workmanship resulting in unrivalled reliability. So,
in an attempt to protect itself and avoid damaging its pristine reputation, Toyota needed
to determine whether it should admit fault to customers or try to solve the problem and
keep them in the dark.
Toyotas external communication with its customers was questionable regarding the
sudden accelerations in vehicles. It issued a statement saying that, Toyota does not believe
that uncontrollable acceleration can occur without the driver applying the accelerator pedal
(Kane et al, 2010:49). In further attempts to discourage any belief that Toyota was at fault,
the company issued another statement regarding the allegations that the floor mat was the
culprit, saying, No defect exists in vehicles in which the drivers floor mat is compatible
with the vehicle and properly secured. (Kane et al, 2010:50)
Finally, Toyota relented and took a minimal amount of responsibility for the problem.
First, it addressed customers in a letter, explaining that the NHTSA conducted a very
thorough inspection and it only could conclude that the acceleration problems were
attributable to improper installation of floor mats (Kane et al, 2010:50). This statement
faced resistance very quickly when numerous Toyota owners stepped forward
complaining that they too experienced sudden unintended acceleration, even after they
took the floor mats out of their vehicles (Kane et al, 2010:50).
After it had become evident that there was more to the problem than Toyota was
admitting, the company went on the defensive. The president of US sales made the
audacious statement that we know what the problem is. We have the fix. And were
going to take care of our customers. (Kane et al, 2010:50) Toyota did its best to appear
strong and in control to its customers; however, the reality was that it had been slow to
solve the problem.
Case Study: Toyota Inc. (2013)
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CONCLUSION
After Lupe consulted her insurance company, she was left with devastating news. The
insurance company informed Lupe that the floor mat was the cause of the accident, and it
was not the car malfunctioning. Because of this, Lupe received no insurance compensation.
Still traumatized by the accident, she refused to buy another Toyota; so, Lupe opted for a
Honda Accord and has been safe behind the wheel ever since.
REFERENCES
1. Heller, Victor L. & Darling, John R. (2012) "Anatomy of crisis management: lessons from the
infamous Toyota Case", European Business Review, Vol. 24 Iss: 2, pp.151 168
2. Kane, Sean, Ellen Liberman, Tony DiViesti, and Felix Click. Toyota Sudden Unintended
Acceleration. Rep. Safety Research and Strategies Inc., 5 Feb. 2010. Web. 10 Mar. 2012.
<http://www.safetyresearch.net/Library/ToyotaSUA020510FINAL.pdf>.
3. Lee, Lupe and Sandlin, Rose (2012). "Toyota Accident Interview." Personal interview. 11 Mar.
2012.
4. US01 (2010).United States. Cong. House of Representatives. Committee on Oversight and
Government Reforms. Toyota Gas Pedals: Is the Public at Risk?. 111 Cong., 2nd sess. S.
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5. US02 (2010).United States. Congressional House of Representatives. "Response by Toyota and
NHTSA to Incidents of Sudden Unintended Acceleration." Response by Toyota and NHTSA to
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7. Yamaguchi, Mari (2010) Toyota Recall Problems Wake-Up Call for Japan Inc. thestar.com.
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