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Toyota's quality meetings faded away

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Toyota's quality meetings faded away

Hans Greimel

Automotive News -- February 8, 2010 - 12:01 am ET

TOKYO -- Toyota President Akio Toyoda has promised to launch a global quality task force to rein in the explosion of recalls that are hammering the company's reputation and sales.

But the task force comes too late to avoid the frenzy over unintended acceleration.

In fact, last year Toyota quietly scrapped high-level "Customer First" quality meetings that had been implemented in 2005 during the last flurry of recalls.

Why? Top executives felt they weren't needed.

The quality meetings were phased out in the months after Akio Toyoda was named the company's next president in January 2009.

Today the company is grappling with a spiraling emergency. At a hastily called 9 p.m. press conference on Feb. 5, the reclusive Toyoda faced the public for the first time since October, when the problems erupted.

"This is a moment of crisis for Toyota," he said after apologizing to customers worldwide.

He pledged to "take the lead toward improving quality around the world by establishing a global quality special task force that will conduct regional quality improvement activities."

The strategy sounds familiar.

In 2005, then President Katsuaki Watanabe rolled out the Customer First program after the company was buffeted by a surge of quality problems and recalls. Watanabe chaired a committee of top brass that met regularly to drum the Toyota Way back into a company gone astray.

Over time Toyota grew into the world's No. 1 automaker, executives grew satisfied that quality control had become part of the company's DNA, an everyday way of life, a Toyota executive involved with quality decisions at the time told Automotive News.

By the time Toyoda took over in June, the committee had stopped meeting, he said.

"We saw that the whole company and each division understood what they need to do in terms of Customer First operation," the Toyota insider recalls. "It became a daily activity rather than a special activity. So they didn't need an executive to instruct them."

The meetings just faded away, the executive said.

"Because Customer First is something like a philosophy," the source said, "Customer First activities themselves are continuing. But we don't have an official organization like a committee."

Today, "customer first" is one of Toyoda's favorite catch phrases. At his press conference he repeatedly stressed that his company needs to get back to basics and put customers first.

"Under the banner, 'Let's build better cars,' we will go back to the basics of 'customer first,'" Toyoda said, "and once more, deeply consider what 'customer first' really means."

Toyoda said part of the solution would be to give more autonomy to local business units.

At the briefing, Executive Vice President Shinichi Sasaki, the company's quality czar, outlined Toyota's renewed quality campaign:

-- Verify the cause of the recalls.

-- Inspect every process, from design and production to sales and service.

-- Beef up customer research offices to collect more comprehensive feedback from the field.

-- Set up regional Automotive Centers of Quality Excellence.

-- Seek evaluation and help from outside experts on how to improve quality.

Toyoda didn't give a timetable for implementing these changes. But he said they are key to getting Toyota back on track.

His appearance in Nagoya last week was highly symbolic. The 53-year-old scion of the company's founding family now heads a company -- and represents a family -- that still commands enormous respect in Japan.

But his promise of "customer first" will need a lot of proving, even in Japan.

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