Toyota Panel Urges More US Control

May 26, 2011

A report released Monday by the Toyota North America Quality Advisory Panel criticized the company’s structure of operations, with all major decisions coming from Toyota Motor Corp. in Japan. “Toyota has erred too much on the side of global centralization and needs to shift the balance somewhat toward greater local authority and control,” the panel advises.

The report, “A Road Forward: The Report of the Toyota North American Quality Advisory Panel,” listed decisions involving recalls, communications, marketing, vehicle design and development that have come from “tightly controlled” Japan.

North America lacks a chief executive and has individual heads of departments that report to Japan.

The report suggested appointing one chief executive for North American operations.

Toyota in North America is split into a sales division in California, an engineering department in Michigan and a manufacturing division in Georgetown, home to the company’s largest North American plant.

The advisory group was formed in March 2010 after Toyota issued safety recalls that affected millions of vehicles, including some models built at Toyota Motor Manufacturing, Kentucky.
The panel, headed by former U.S. Transportation Secretary Rodney Slater, did not look at specific complaints about Toyota-produced vehicles but at how the world’s largest automaker addressed complaints.

Toyota President Akio Toyoda, who commissioned the seven-member panel, released in a statement expressing his gratitude for the observations and recommendations in the 60-page report.

“Their advice has been reflected in the meaningful steps we’ve taken to give our North American operations more autonomy and become an even more safety-focused and responsive company,” Toyoda said.

Another observation of the panel was that the automaker reacted with skepticism and defensiveness to the “sticky pedal” safety issues at first.

“On the vehicle assembly line in Toyota factories, when a problem on a vehicle is spotted, any line worker can pull a rope called an ‘andon cord’ to stop production so that the problem can be quickly fixed.

But when external sources have complained about quality and safety issues, it has often taken Toyota too long to pull a metaphorical andon cord and quickly try to solve the problem,” the report stated.

The report noted that extensive testing by the National Aeronautics and Space Administration and the U.S. National Highway Traffic Safety Administration revealed no electronic flaws to cause unintended acceleration in Toyota vehicles.

The automaker announced with the release of the report that several steps in line with recommendations were under way.

These included “giving North American operations greater autonomy to make proactive recall decisions” and appointing a chief safety technology officer.