Toyota unintended-acceleration recall

Toyota bragged internally about saving $100M by negotiating the recall down. It cost them $1.2 billion.

Documented, foreseeable risks that were ignored anyway. The failure is attention, not information.

Room: Q1 Predictable
Year: 2010
Impact: $1.2B
Sector: Automotive
Region: Global
Category: Societal

Why this room

This is a predictable-room case because the information was not merely available, it was internal, written down and treated as an asset. A July 2009 Toyota presentation to its Washington office logged, under the heading 'Wins for Toyota - Safety Group', that the company had 'negotiated "equipment" recall on Camry/ES re SA; saved $100M+, w/ no defect found', alongside claimed savings of $124 million on side-airbag rulemaking and $11 million on door-lock rules. The hazard was known, the remedy was scoped and priced, and the decision was to narrow the remedy. The failure was attention and incentive, not information, which is the q1 signature; the subsequent $1.2 billion penalty attached to concealment, not to the engineering defect.

The record

A July 2009 internal Toyota presentation listed under 'Wins for Toyota - Safety Group': 'negotiated "equipment" recall on Camry/ES re SA; saved $100M+, w/ no defect found', referring to the September 2007 recall of 55,000 floor mats.certain
The same presentation claimed a phase-in of new side-airbag safety regulations saved Toyota $124 million and that delaying a tougher door-lock rule saved $11 million.certain
In March 2014 the DOJ imposed a $1.2 billion financial penalty under a deferred prosecution agreement, on a wire fraud charge, the largest penalty of its kind ever imposed on an automotive company; Toyota admitted misleading consumers and NHTSA about floor-mat entrapment and 'sticky pedal'.certain
Toyota recalled approximately 9 million vehicles worldwide over unintended acceleration: about 5.2 million for floor-mat entrapment and about 2.3 million for accelerator pedals, with roughly 1.7 million subject to both.high
As of January 2010, 21 deaths were alleged in NHTSA complaints linked to the defect, rising to 37 alleged deaths after the 28 January 2010 recall announcement.medium

Sources

The book

This entry is one of 111 in the register. The full story, and what it cost the people who lived it, is in Risky Business by Claudia Zeisberger, David Munro and Joanna Reijgersberg-Siew.

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