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TOYOTA VEHICLES RECALL SAGA
1.
TOYOTA VEHICLES RECALL SAGA
AN INVESTIGATIVE
RESEARCH AND ANALYSIS
TO
PRINCIPLES OF RESPONSIBLE COMMERCE
November 2010
2. Table of Contents
1. Introduction 1
2. Impact on Individual, Organization and Society 2
3. Review of Relevant Theories
3.1 Capitalism 3
3.2 Corporate Social Responsibility 4
4. Applications of Relevant Theories
4.1 Capitalism 5
4.2 Corporate Social Responsibility 6
5. Conclusion 7
6. Recommendations 8
=================================================================
7. List of References 10
8. Appendix A: Company Profile 11
9. Appendix B: Public and Media Information 17
3. Introduction
Authorization, Purpose and Scope of Report
Our engagement is one that is to further gather information for Toyota Motor Company on
how this episode affected the society on three levels, namely Individual, Organization and
Society.
Our chief source of information is primarily from official online media pressrooms and
portals. We will employ these findings, business ethnical concepts and models to better
understand the predicament, as well as how can such incidents be avoided, or prevent from
re-occurrence.
Background
Toyota Motor Corporation recalls started at the end of 2009, millions of automobiles around
the world were involved due to safety concerns over certain models of Toyota automobiles
being potentially prone to uncontrollable acceleration.
Toyota initiated a total of 3 high profile recalls. Two of which were assisted by the United
States National Highway Traffic Safety Administration (NHTSA). And Toyota was charged
with a penalty totaling US$16.4 million by NHTSA. (Crawley 2010)
The first car recall that took place on October 2009 was to prevent and rectify a suspected
fault of pedal. It took a fatal accident, struck on 28th August 2009 in San Diego to discover
that there were no retaining clips secured to the mat and the brake hardware requires heavy
braking to be consistent with a stuck accelerator. An NHTSA report stated that there was not
only any relieving obstruction allowance on the accelerator pedal hinge but also a shortage of
the emergency activation in the dashboard for automated pedal release. Further NHSTA
investigation revealed that that the accelerator pedal was stuck on the floor mat and the
elasticity of the accelerator pedal spring was found to be in good operative condition. (Kim &
Bailey 2010)
A number of car-crash cases were later diagnosed that the cause was not the floor mat
incursion but a possibility of unintentional acceleration due to mechanical ‘sticking’ of the
pedal. As such, Toyota realized then that there was a need for a second recall and it took
place on 21st January 2010. (Kim & Bailey 2010)
Prius, the latest car model and other hybrid cars, were then found to have braking problems.
When driving on a slow and steady pace on a rough or slick road surfaces, customers
complained that they always have an inconsistent brake feeling while the anti lock braking
system is activated. In normal operation circumstances, the system would engage and
disengage swiftly in accordance to the system sensors and tire slippage. This third and final
recall to date happened on the 9th February 2010. (Kim & Bailey 2010)
1
4. Impact on Individual, Organization and Society
Individual
Both current and prospective Toyota automobiles are affected. Not only for the car owners
and their passengers, but also the general public, safety is compromised due to the uninitiated
acceleration. Owners who had models that were affected by the accelerator and brake will
have a hard time trying to sell off their cars because many dealers will know that these cars
are difficult to sell as no one is willing to pay for something defective, or even suspected to
be defective. Owners will feel unjustified for the high price they had to pay to own the car
initially, now grossly depreciated. Moreover, they had spent both time and money on the
repair, service and maintenance of the vehicles. For the owners who had accidents due to the
faults, they may have suffered bodily hurt, as well as penalized for violating traffic laws.
More importantly for Toyota, current as well as prospective car owners will see their faith
and trust in Toyota’s quality, diminished. They will not want to put their lives and jeopardize
lives of others.
Organization
Long known for their quality assurance and reliability of their cars, Toyota’s reputation is
greatly affected. The public announcement of the recalls greatly affected sales and profit
during that period. Large expense of effort, time and money had been exercised to have the
affected models to be recalled and parts replaced. This in turn affected the value of Toyota
shares as investors lost confidence.
CTS Corporation is engaged by Toyota to manufacture and supply their pedals. Although
CTS manufactured the pedals in accordance to Toyota’s specifications and had officially
announced that they refused to be blamed for the ‘sticking’ pedal, CTS reputation is
adversely affected. Contracts were lost or put on hold with other automobile companies like
Ford Motors. (Green & Ramsey, 2010)
Society
Investigations done by NHTSA on Toyota automobiles made known that the ‘sticking’ pedal
had caused the unintended acceleration. Public unrest was felt for the fear of traffic accidents.
Everyone deserves the right to live well and safety for everyone should not be compromised.
There was consensus and also a sense of economic instability in the automobile as the public
community fears that when carmakers’ quality is compromised, safety becomes negotiated.
2
5. Review of Relevant Theories
Capitalism
Capitalism can be described as an economic system in which the means of production are
largely in private hands, and the main incentive of economic activity is the accumulation of
profits. (Schaefer, 2008, p193)
Capitalism patterns, in a particular way, economic activities in a society. It can be defined
along two primary aspects - its class relations, and the mechanisms of economic coordination
as its central plan. (Wood, 1996. p250)
Class relations refer to the social relationships through which power is exercised over the use
of production means. In capitalism, human laboring activity is provided by workers who do
not own the means of production and who, in order to acquire an income, are hired by
capitalist firms to operate the means of production. The fundamental class relation of
capitalism therefore is the social relationship of capitalists and workers. (Wright, 2000)
Economic coordination in capitalism is accomplished primarily through mechanisms of
decentralized voluntary exchange by privately contracting parties within a free market –
through which the prices and quantities of the things produced and transacted are determined.
The famous metaphor of the invisible hand captures the basic idea, that each individual and
firm, simply pursuing their own private interests, and uncoordinatedly engages in bargaining
exchanges with other individuals and firms. (Wright 2010, p22-23)
The combination of these two features of capitalism – class relations defined by private
ownership and property-less workers, and coordination organized through decentralized
market exchanges – generates the characteristic competitive drive for profits and capital
accumulation of capitalist firms. Each firm, in order to survive over time, must compete
successfully with other firms. Firms that innovate, lower their cost of production, and
increase their productivity can undercut their rivals and thus expand at the expense of the
other firms. Each firms faces these competitive pressures, and thus in general all firms are
forced to innovate in order to survive. The resulting relentless drive for profits generates the
striking dynamism of capitalism relative to all earlier forms of economic organization.
(Wright 2010, p22-23)
3
6. Corporate Social Responsibility
The entirety of CSR can be discerned from the three words contained within its title phrase:
‘corporate,’ ‘social,’ and ‘responsibility.’ Therefore, in broad terms, CSR covers the
responsibilities corporations (or other for-profit organizations) have to the societies within
which they are based and operate. (Werther & Chandler 2010, p5)
More specifically and contextually, CSR involves any business organization identifying its
stakeholder groups and incorporating their needs and values within the strategic and decision-
making process.
CSR is employed as a mean to analyze the inter-dependent relationships that exist between
businesses and economic systems, and the communities within which they are based. CSR is
an instrument to discuss the extent of any obligations a business has to its immediate society;
a way of proposing policy ideas on how those obligations can be met; as well as a tool by
which the benefits to a business for meeting those obligations can be identified. (Asongu
2007, p20)
Understanding that profits are necessary for any business entity to exist, businesses rely on
the society within which they operate and could not exist or prosper in isolation. They need
the infrastructure that society provides, its source of employees, not to mention its consumer
base, and in cases, natural resources. (Werther & Chandler 2010, p94)
Werther & Chandler (2010, p94) noted that CSR is the recognition of that inter-dependence
and a instrument of delivering on that obligation, to the mutual benefit of businesses and the
societies within which they are operate in.
CSR advocates point out that no organization exists in isolation. They believe that businesses,
without exception, have an obligation to contribute to the community, on which they rely so
heavily. (Werther & Chandler 2010, p94)
4
7. Applications of Relevant Theories
Capitalism
A pivotal aspect of the pursuit of profits by capitalist firms centers on laboring activity of
employees. Capitalist firms hire workers to use the means of production to produce the goods
and services, which the capitalist firm then sells. The difference between the total costs of
producing those goods and services and the price at which they are sold constitute the profits
of the firm. In order to maximize profits, such firms face a double problem with respect to
labor: on the one hand, hiring labor is a cost that takes the form of wages and capitalists want
to keep these costs (like all costs of production) as low as possible. The lower the wage costs,
the higher the profits, all other things being equal. On the other hand, capitalists want workers
to work as hard and diligently as possible, since the more effort workers expend, the more
will be produced at a given level of wages. The more that is produced for a given level of
costs, the higher the profits. The economic interest of capitalists – the profits which they
command – therefore depends upon extracting as much labor effort from workers at as little
cost as possible.
Procuring parts of lower quality, and the stress on low cost is as intense as it has ever been
felt in Toyota. The manifestation of these capitalistic pressures had reared its ugly head. With
trillion yen worth of internal reserves, Toyota has been paying its worker unfair wages,
replaced full-time regular workers with contingent labor under the pretext of international
competition. It has exported low-cost vehicles abroad as a result of its all-out cost-cutting
effort in order to increase profits. Toyota has not performed its due diligence in ensuring the
safety of its products prior to launching and has continued to produce defective vehicles,
endangering lives. The manifestation of capitalistic pressures has reared its ugly head in
Toyota’s relentless pursuit of the position as the world’s number one carmaker.
5
8. Corporate Social Responsibility
Despite the sluggishness in reaction, it is important that Toyota had performed the recall and
suspended sales of models suspected of the publicized defect. Toyota owed both the car
owners, as well as the general public, a responsibility of safety and order.
That being said, Toyota had deemed undecided on releasing their findings from the
investigations. There had been inconsistent speculation on the cause of sudden acceleration.
Specifics of recalls were not made very explicitly clear, and investigation has been
unrealistically lengthy, if not drag-like.
It is shocking to know that Toyota is aware of the accelerator issue, long before the recalls
and announcements. Toyota has enjoyed a longstanding reputation not only for business
prowess but also for social responsibility. This revelation made it all the more scandalous.
Toyota, of course, had fostered this image. Toyota has sought harmony between people,
society and the global environment, as well as the sustainable development of society.
However, it took the escalating number of complains and car crash fatalities to trigger a
response action from Toyota. After the announcement was made, closet complains flooded. It
reflected on the level of severity of the issue, not made known until the defect became public.
Toyota’s more laudable stances on sustainability is further compounded by its corporate
policies to have successfully kept unions out of its heavily-subsidized American plants and
has taken advantage of contingent works to keep down costs in those operations. This current
safety scandal shows Toyota puts its business interest ahead of the safety of its customers and
other with whom they share the roads.
6
9. Conclusion
The Toyota recall had impacted individuals, especially current owners, who will feel injustice
for the risk they had been put under, and to a lesser extent, for economic reasons due to repair
and re-sale.
Both Toyota and their business associates, as organizations took a heavy blow from this
incident. They saw their reputation tarnished, sales revenue and value declined.
It is too, apparent that the society is enraged for Toyota’s indifference and lack of prudence in
ensuring road safety of its vehicles, for the public.
Toyota found itself under great capitalistic stress. There were sales to be made, costs to be
cut, profits to be earned and social stratum to be pursued. It is no coincidence that it took
disgruntled workers, as well as sub-graded parts to manifest this ugly facet of cost-cutting
measures for profit-maximizing. This analysis made recommendation is the following chapter
to underline the paramount importance of both human resource and product cost
management.
Toyota has long been regarded as a company with commendable record of demonstrating
CSR. In this context, Toyota has failed to be forthright and decisive to react promptly to
resolve the problem. In this delayed response, lives of many continued to be at risk. It is
alarming to know that Toyota found safety became an entity to be negotiated for better
monetary returns. This tactlessness and disregard for social responsibility is inexcusable.
The CSR concept must be re-educated in Toyota, as proposed in the next chapter.
7
10. Recommendations
To regain public trust in Toyotas’ products, the rebuilding should start from the internal of
Toyota – re-fostering quality-first culture, revamping corporate policies as well as reflecting
on its social responsibilities amidst capitalistic stress. Only then, the public can gradually be
won over and confidence recovered. And when this happens, a win-win situation for both the
Toyota stakeholders and the rest of general community can be achieved.
1. Promote quality first culture
It is imperative to instill into all employees what the company values. Run campaigns
and exhibitions to advocate the emphasis on quality. If they believe in it, they will
perform in accordance.
2. Avoid unnecessary downsizing intrinsically to cut cost.
Over-working of employees may cause them to compromise on quality in
production/engineering in order to meet up with the work demands. Health issues may
arise due to insufficient rest for the employees. Downsizing should be moderated to
avoid overburdening a reduced workforce. Employees will be more focused at work
and desired performance can be better achieved.
3. Appropriate adjustment in employee’s remuneration for motivation
Low wages for high volume of work will cause resentment. Resentment in turn will
lead to indifference. Employees should be encouraged to be vigilant to report and
feedback suspicion of faults. Pay adjustments should be based on the quality of work
produced, to motivate.
4. Providing training to enhance work performance
To guarantee all employees are equipped with the essential soft skills and knowledge
for their scope of work, relevant and effective training programs are to be in place.
With improved knowledge and skills, engineering and production can then be carried
out at an advanced professional level.
8
11. 5. Treat all employees equally to promote fairness and loyalty
Employees from the developing countries and developed countries are to be paid
equally accordingly to their knowledge and skills. Exploitation should not be present
as resentment to the company will grow and therefore quality products and services
will not be obtained.
6. Employ specialists to improvise quality standards
Specialists are able to identify as well as improve production and engineering with
their knowledge, experience and skill. Quality and safety can be guaranteed with their
expertise and supervision.
7. Avoid purchasing low quality parts to intensify profits
Quality should not be compromised at the expense of customers’ safety. Customers’
satisfaction will promote long term sales interest and profits.
8. Create online portal for customer to reinforce customer service
This is to ensure fast acknowledgement and reaction to customers’ problems and
provision of solution to their queries. This will provide a centralized hub to enhance
information flow and knowledge sharing.
9
12. List of References
Crawley, J 2010, ‘UPDATE 1-Toyota Motor pays $16.4 million U.S. safety fine’, Reuters, 18
May, accessed 21/10/2010, http://www.reuters.com/article/idUSN1813964220100518
Kim, SY & Bailey D 2010, ‘Timeline: Toyota from rise to recall crisis, hearings’, Reuters, 22
February, accessed 25/10/2010, http://www.reuters.com/article/idUSTRE61M0IT20100223
Green, J & Ramsey, M 2010, ‘Toyota Pedal Maker CTS in Spotlight as Recalls Widen
(Update3)’, Bloomberg Businessweek, 01 February, accessed 28/10/2010,
http://www.businessweek.com/news/2010-02-01/toyota-pedal-maker-cts-thrust-into-
spotlight-as-recalls-widen.html
Schaefer, RT 2008, Sociology: A Brief Introduction, 4th edn, McGraw-Hill
Wood, JC 1996, Karl Marx’s economics: Critical Assessment, Routledge
Wright, EO 1997, Class Counts: Comparative studies in class analysis, Cambridge
University Press
Wright, EO 2010, Envisioning Real Utopias, Verso Books
Werther, WB & Chandler, D 2010, Strategic Corporate Social Responsibility: Stakeholders
in a Global Environment, Sage Publications.
Asongu, JJ 2007, Strategic Corporate Social Responsibility in Practice, Greenview
Publishing
10
13. Appendix A: Company Profile
| WORLDWIDE |
Top Page > Company > History of Toyota
1867-1939 Toyota’s Business Activities
1940-1949 Information on Toyota’s
businesses including the
1950-1959 automobile business.
1960-1969
1970-1979
Questions that Toyota
1980-1989
regularly receives from
The AA Sedan Koromo Plant Older building of
1990-1999 customers have been
(currently Honsha Plant) Toyota Head Office organized into an FAQ.
2000-
* Detailed information can be found by selecting the topics listed in the left-side menu.
1867 Birth of Sakichi Toyoda
1924 Sakichi Toyoda invents Toyoda Model G Automatic Loom
1929 Automatic-loom patent is sold to a British company
1930 Kiichiro Toyoda begins research on small gasoline-powered engine
1933 Automobile Department is established at Toyoda Automatic Loom Works, Ltd.
1935 The Toyoda precepts are compiled
1936 The AA Sedan is completed
1937 Toyota Motor Co., Ltd. is established
1938 Honsha Plant begins production
1950 Company faces a financial crisis; Toyota Motor Sales Co., Ltd. is established
1951 Suggestion System is begun
1955 The Toyopet Crown, Toyopet Master and Crown Deluxe are launched
1957 The first prototypes of the Crown are exported to the USA Toyota Motor Sales U.S.A.,
Inc. is established
1959 Motomachi Plant begins production
1962 Joint Declaration of Labor and Management is signed
1965 Toyota wins the Deming Application Prize for quality control
1966 The Corolla is launched Business tie-up with Hino Motors Ltd. begins
1967 Business tie-up with Daihatsu Motor Co., Ltd. begins
1974 Toyota Foundation is established
1975 The prefabricated housing business begins
1982 Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. are merged into Toyota Motor
Corporation
1984 Joint venture with GM (NUMMI) begins production in the USA
1988 Toyota Motor Manufacturing, USA, Inc. (present TMMK) begins production
1989 The Lexus brand is launched in the USA
1992 Toyota Motor Manufacturing (UK) Ltd. begins production
1997 The Prius is launched as the world first mass-produced hybrid car
1999 Cumulative domestic production reaches 100 million vehicles
2000 Sichuan Toyota Motor Co., Ltd. begins production in China
2001 Toyota Motor Manufacturing France S.A.S. begins production in France
2002 Toyota enters Formula One World Championship Tianjin Toyota Motor Co., Ltd. begins
production in China
2004 The Toyota Partner Robot is publicly unveiled
2005 The Lexus brand is introduced in Japan
2008 Worldwide Prius sales top 1-million mark
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14. | WORLDWIDE |
Top Page > Company > Vision & Philosophy > Toyota Traditions > Mar-Sep 2010
Guiding Principles
CSR POLICY :
Contribution towards
Sustainable Development
Toyota Code of conduct
Toyota Production
System
The Corolla Philosophy
With the establishment of new Customer First training centers around the world in July, Toyota Motor Corporation (TMC) is
Toyota Design
taking definitive steps towards improving the way its global associates relate with the people who purchase and drive Toyota
Globalizing and Localizing vehicles. While these centers are an innovative addition to TMC, the philosophy behind them has been a driving force within
Manufacturing
Toyota since the company's early days.
Toyota Traditions
Mar-Sep 2010 In October 1936, with the addition of the Model AA passenger car to Toyota's production line, the company initiated a
Dec2009-Feb2010 program to visit customers in cooperation with domestic dealers in each region of Japan. The announcement of the start of
Aug-Nov 2009 the service in Toyota's internal newsletter said, "Increasing benefits for customers, dealers, and manufacturers is the desire
May-July 2009 that the three parties have in common." With this new program, the root of Toyota's "Customer First" philosophy was born.
Mar/Apr 2009
To this day, putting the customers' needs ahead of everything else has always helped the company manufacture quality
products and provide good service.
Nov2008-Feb2009
Sep/Oct 2008
Jul/Aug 2008
Another clear declaration of the "Customer First" policy came in May 1946, when Toyota invited representatives of
dealerships across the nation to the Koromo plant (the present head factory). It was in his speech, "A Concept of Sales
May/Jun 2008
Policy and Structure," that Shotaro Kamiya, the first President of Toyota Motor Sales Co., Ltd., recognized the progress of
Mar/Apr 2008
the U.S. automotive industry by stating that "their sales method adopts an organization which directly connects customers
Jan/Feb 2008
and manufacturers, which makes it possible to reflect the general customers' experience with cars."
Nov/Dec 2007
Sep/Oct 2007
Kamiya called for an end to Japan's wartime distribution system, which was preventing the voice of the customers from
Jul/Aug 2007
being heard. He concluded, "Progress and development of vehicles are impossible unless vehicles are improved. Both sales
May/Jun 2007 methods and structure need to be formulated from this point of view. To put it in another way, based on the recognition that
Jan/Feb 2007 dealers cannot live without customers, and manufacturers cannot live without dealers, we are thinking of setting up
Jul/Aug 2006 dealerships which directly link customers and Toyota."
May/Jun 2006
Mar/Apr 2006 Realizing that dealers and distributors strengthen the bond between the customer and manufacturer, Kamiya made a pledge
Jan/Feb 2006 that summarizes the spirit of Toyota today. "The priority in receiving benefits from automobile sales should be in the order of
Nov/Dec 2005 the customer, then the car dealer, and lastly, the manufacturer. This attitude is the best approach in winning the trust of
Sep/Oct 2005
customers and dealers, and ultimately brings growth to the manufacturer."
Jul/Aug 2005
May/Jun 2005
Customer trust can only be built upon a dependable, well-made product, and Toyota understands that cultivating superior
human resources is essential to ensuring reliable quality. Just as TMC has established Global Production Center training
Mar/Apr 2005
facilities around the world to transfer manufacturing skills and expertise to its associates, the Customer First training centers
Jan/Feb 2005
will better equip Toyota associates with the knowledge and abilities to steer the company's quality-improvement program in
Nov/Dec 2004
the years and decades ahead.
Sep/Oct 2004
Jul/Aug 2004
May/Jun 2004
Mar/Apr 2004
Jan/Feb 2004
Nov/Dec 2003
Sep/Oct 2003
Jul/Aug 2003
May/Jun 2003
Mar/Apr 2003 An exhibition was held in Tokyo to
Shotaro Kamiya, the first
commemorate addition of the Model AA
Jan/Feb 2003 President of Toyota Motor
passenger car to Toyota's production line,
Nov/Dec 2002 Sales Co., Ltd., was the
September 1936. The following month the
A diorama in the Toyota Kuragaike Commemorative Hall Exhibit first Toyota executive to
Sep/Oct 2002 company initiated a program to call upon
Room recreates the April 1936 story of when Toyota founder publicly declare that the
Jul/Aug 2002 customers at their homes
Kiichiro Toyoda (right) rushed out to help the driver of a G1 truck, primary focus of the car
which had broken down. Toyoda and staff of the local dealership manufacturer must
made repairs to the vehicle, displaying their commitment to the always be the customer
customer
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16. CSR POLICY: Contribution towards Sustainable Development
We, TOYOTA MOTOR CORPORATION and our subsidiaries, take initiative to contribute to
harmonious and sustainable development of society and the earth through all business activities
that we carry out in each country and region, based on our Guiding Principles.
We comply with local, national and international laws and regulations as well as the spirit thereof
and we conduct our business operations with honesty and integrity.
In order to contribute to sustainable development, we believe that management interacting with
stakeholders as described below is of considerable importance, and we will endeavor to build and
maintain sound relationships with our stakeholders through open and fair communication.
We expect our business partners to support this initiative and act in accordance with it.
Customers
Based on our philosophy of “Customer First”, we develop and provide innovative, safe and
outstanding high quality products and services that meet a wide variety of customers’ demands to
enrich the lives of people around the world. Guiding Principles and
We will endeavor to protect the personal information of customers and everyone else we are
engaged in business with, in accordance with the letter and spirit of each country's privacy laws.
Guiding Principles
Employees
We respect our employees and believe that the success of our business is led by each individual’s
creativity and good teamwork. We stimulate personal growth for our employees.
Guiding Principles
We support equal employment opportunities, diversity and inclusion for our employees and do not
discriminate against them. Guiding Principles
We strive to provide fair working conditions and to maintain a safe and healthy working
environment for all our employees. Guiding Principles
We respect and honor the human rights of people involved in our business and, in particular, do
not use or tolerate any form of forced or child labor. Guiding Principles
Through communication and dialogue with our employees, we build and share the value “Mutual
Trust and Mutual Responsibility” and work together for the success of our employees and the
14
17. company.
We recognize our employees' right to freely associate, or not to associate, complying with the laws
of the countries in which we operate. Guiding Principles
Management of each company takes leadership in fostering a corporate culture, and
implementing policies, that promote ethical behavior. Guiding Principles and
Business Partners
We respect our business partners such as suppliers and dealers and work with them through
long-term relationships to realize mutual growth based on mutual trust. Guiding Principles
Whenever we seek a new business partner, we are open to any and all candidates, regardless of
nationality or size, and evaluate them based on their overall strengths. Guiding Principles
We maintain fair and free competition in accordance with the letter and spirit of each country’s
competition laws. Guiding Principles and
Shareholders
We strive to enhance corporate value while achieving a stable and long-term growth for the
benefit of our shareholders. Guiding Principles
We provide our shareholders and investors with timely and fair disclosure on our operating
results and financial condition. Guiding Principles
Global Society/Local Communities
Environment
We aim for growth that is in harmony with the environment by seeking to minimize the
environmental impact of our business operations, such as by working to reduce the effect of our
vehicles and operations on climate change and biodiversity. We strive to develop, establish and
promote technologies enabling the environment and economy to coexist harmoniously, and to
build close and cooperative relationships with a wide spectrum of individuals and organizations
involved in environmental preservation. Guiding Principles
Community
We implement our philosophy of “respect for people” by honoring the culture, customs, history
and laws of each country. Guiding Principles
We constantly search for safer, cleaner and superior technology that satisfy the evolving needs of
society for sustainable mobility. Guiding Principles and
15
18. We do not tolerate bribery of or by any business partner, government agency or public authority
and maintain honest and fair relationships with government agencies and public authorities.
Guiding Principles
Social contribution
Wherever we do business, We actively promote and engage, both individually and with partners,
in social contribution activities that help strengthen communities and contribute to the
enrichment of society. Guiding Principles
16
19. Appendix B: Public and Media Information
Diagram B.1 Toyota World-Wide Recalls Overview
17
20. Diagram B.2 Toyota Recall List of Models and Parts Involved (2005-2009)
18
21. Diagram B.3 Toyota Floor Mat Recall Timeline
Source: Jalopnik.com
19
22. Diagram B.4 Toyota Faulty Pedal Recall Overview
Source: Chicago Tribune
20
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Toyota You Don't Know, detailing what it alleged were serious human-rights violations.
The report linked Toyota to human trafficking and sweatshop abuse in connection with its importing of foreign guest
workers from China and Vietnam to work in its Japanese factories.
Many are pressured to work overtime without pay, the report claimed, adding that there were signs similar practices
were emerging in the United States.
Toyota is imposing its two-tier, low-wage model at its nonunion plants in the south of the U.S., the report read,
which will result in wages and benefits being slashed across the entire auto industry.
Toyota officials said they could not confirm they received the memo but declined to comment further.
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Believing that Toyota's unions were too compliant with management, Wakatsuki in 2006 formed the All Toyota Labor
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Toyota about an impending disaster. After consulting technicians around the company, they also provided a detailed
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Our responsibility as a labor union was to point out these problems that Toyota should have known about. People
'Toyota Man's' conformist ways come
were overworked; some were committing suicide, he said. Of course, Toyota did nothing, but looking back we see
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how important this was. We just told them what we saw.
March 22, 2010
Tense times in Toyota City Hiroko Uchino's complaint with Toyota wasn't over its products. She believes its workplace environment killed her
March 4, 2010 husband.
In 2002, at age 30, the father of two collapsed at his desk of sudden heart failure. It was 4:30 a.m. and Kenichi Uchino
had finished his assembly line shift hours earlier. But as a team leader, he was responsible for completing his
paperwork on his own time.
The pattern had long concerned Uchino, who routinely worked 14 hours a day. In his final month, his wife says, he
worked 144 hours of unpaid overtime, a common practice known as service to the company.
In 2007, a Japanese court ruled Uchino had died from karoshi -- he had literally worked himself to death.
In an interview, Hiroko Uchino described the pain of watching her husband's energy ebb, how he went right to bed
after work rather than play with his children or wash and wax his precious van.
He used to tell me 'I'm tired, I'm tired, but what can I do? There's no way out.' He used to be such a happy person.
But in the end, he stopped smiling, she recalled.
Two years ago, Uchinosneakedinto a Toyota stockholder's meeting to confront then-President Katsuaki Watanabe.
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One of Toyota's most vocal critics is automobile consumer advocate Fumio Matsuda, often called his nation's Ralph
Nader, who in 1970 formed the Japan Automobile Consumer Union.
FIND MORE STORIES ABOUT Now 84, the former Nissan quality control engineer has spent decades monitoring Toyota and Japan's other
• Business carmakers.
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He calls Toyota's business practices the most secretive of all.
In the past, he said, Toyota sponsored secret recalls, asking owners to visit dealers for vehicle checkups, a ploy that
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allowed them to replace defective parts and then charge the owner for the work.
'Toyota Man's' conformist ways come
under fire Everything Toyota does is hidden, he said.
March 22, 2010
Matsuda said he believed that Toyota also knew of defects involved in the most recent recall long before going public.
Tense times in Toyota City
March 4, 2010 I believe there will eventually be criminal charges, he said. They knew there were problems with their cars, but they
didn't do anything until they were pressured.
john.glionna@latimes.com
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27. | WORLDWIDE |
Top Page Company Company Profile Message from Top Management
Message from Top
Management
Guiding Principles
Overview
Executives
Business Activities
Design, R D /
Manufacturing
I would like to begin by offering my profound gratitude to all of Toyota's customers, shareholders, employees and other
Market / Toyota Sales and stakeholders for their ongoing support.
Production
History of Toyota In recent months we have given Toyota and Lexus vehicle owners, as well as our shareholders and other stakeholders,
Toyota Today cause for concern with respect to the quality and safety of our vehicles, and for this I offer my heartfelt apologies.
During the congressional hearings in the U.S. and various briefings both in Japan and abroad, I received much support in
my attempt to uphold Toyota's reputation for good quality. That support came in the form of constructive criticism and
encouragement, for which I am extremely grateful.
When I assumed the position of president of Toyota in June 2009, I said that we were setting sail into very challenging
business conditions. This year has indeed been a challenging one, a year where we could not afford to relax in the
slightest.
It was also a year in which we had to make many difficult decisions, such as withdrawing from the Formula One World
Championship and ending our production orders to NUMMI (New United Motor Manufacturing Inc.), the joint venture
company we established with General Motors. However, even in such a difficult period for Toyota, I am sincerely grateful
to our dealers and suppliers who remained fully committed to providing people with cars, and to our employees worldwide
for their efforts in working together so that the company will return to stability as soon as possible. And finally, above all, I
am sincerely grateful to the more than 7 million people around the world who newly purchased Toyota and Lexus vehicles.
Together with your help, Toyota managed to achieve an operating income of 147.5 billion yen on a consolidated basis for
the year ending March 31, 2010. Returning to the black so quickly bodes well as we try and foresee what the next hundred
years holds for the automotive industry and devise strategies for future growth. I have positioned FY2010 as the year for a
fresh start for Toyota, and as such I intend to steer the company toward new strategies for growth.
Regarding one of Toyota's central growth strategies, we announced a tie-up with Tesla Motors, Inc. in May 2010, to
develop electric vehicles. During a visit to the U.S. earlier this spring, Tesla CEO Elon Musk kindly gave me an opportunity
to drive one of Tesla's electric vehicles. Simply put, I felt the wind of the future. I gained an understanding of Tesla's
technological prowess, and the energy enabling them to make that technology a reality in such a short time.
Initiating a once-in-a-century turning point in technology cannot be done by a large corporation like Toyota alone; it also
requires the spirit, quick decision-making and flexibility of a venture capital company. Toyota was once a venture capital
company, before growing into the global corporation it is today. It is my strong hope that in working with Tesla, all of us at
Toyota will be reminded of the pioneering spirit that founded our company and be inspired to take on the challenges that lie
ahead.
We intend to fulfill our founding mission of contributing to society through automobiles and services. Customer
requirements and society's expectations change with time. I believe that the continual changes that occur over time are
what define growth, and I am determined that Toyota, as well as myself, shall continually grow in step with these temporal
changes.
To do that, I believe that it is important that all of Toyota's stakeholders—customers, shareholders, local communities,
dealers, suppliers, and employees alike—share in the faith that Toyota's continual growth is good for all concerned.
My objective is not simply to achieve growth in terms of expanding Toyota's size:My aim is to maintain sustainable growth
by ensuring that all Toyota employees are committed to paying the utmost attention to each and every vehicle that is
produced as we endeavor to deliver safe and high-quality cars at affordable prices to people the world over.
Despite the difficult business environment in which Toyota finds itself, I am determined to cultivate a shared mindset
among everyone involved in Toyota's businesses and strive to live up to the always better cars motto. In this quest, I ask
for your continued support.
July, 2010
Akio Toyoda
President
Toyota Motor Corporation
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http://www2.toyota.co.jp/en/about_toyota/message/index.html 2010/11/3
28. Diagram B.5 Toyota’s full-page advertisement to announce their temporally
shut down plan for certain plants due to massive recalls.
26
29. DigramB.6 Public Criticisms
Source: Reddit and Digg
Source: caglecartoons.com
27
