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TheDetroitBureau on Autoblog with Paul Eisenstein

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TheDetroitBureau on Autoblog with Paul Eisenstein

by Paul Eisenstein (RSS feed) on Feb 17th 2010 at 9:29AM

Q&A: Toyota Division General Manager Bob Carter – "We made a couple mistakes."

Bob Carter looked tired, even before he took to the stage to introduce the next-generation Toyota Avalon. And no wonder. In the four months since Toyota announced plans to recall 3.8 million cars, trucks and crossovers due to carpet "entrapment," the automaker has found itself steadily descending towards the inner rings of hell.

It wasn't supposed to be like that. Barely a year ago, the Japanese company ousted General Motors to become the world's largest automaker. But today, decades of careful planning are at risk, with new recalls being added on a seemingly weekly basis. With federal regulators increasing their scrutiny and even Congress stepping in, Carter, as general manager of the Toyota division, could see years of gains evaporate.

How to bring the situation back under control isn't easy, the long-time Toyota executive conceded during an interview in which he tried to walk a careful line, admitting there are problems while insisting Toyota is not only fixing them but still dedicated to deliver the high levels of quality and safety it had long been known for. Here's what he had to say when I spoke with him...

Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials will bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.

Q: This has got to be the toughest year you've ever dealt with.

Carter: We've been remarkably successful, over 50 years, building a franchise based on quality, reliability and dependability – which remain the cornerstones of the brand. That's not to say we haven't had problems. We haven't met the expectations of our customers or ourselves. We've made some mistakes. Now we're focusing on the mistakes and how we respond and rebuild that confidence.

Q: That's made for a lot of skeptics who believe that not all your problems have yet been taken care of. What about worries that you have problems with your electronic control technology?

We have absolutely full confidence in our electronic controls. Carter: We have absolutely full confidence in our electronic controls. We have thoroughly and completely tested our electronics. We have done everything but hit them with lightning bolts. We can't get anything to even directionally say this is part of the problem (with unintended acceleration). We've never going to stop testing but we have full confidence in our electronics and will correct the two mechanical problems.

Q: Last October, you announced a recall for carpet mats which could entrap accelerator pedals, and said that was the solution, but then came back, in January, to acknowledge another problem with sticky accelerator pedals.

Carter: I understand that has shot some of the credibility the company has. I was the guy who stood in front of you, in Detroit and said we had the fix with the carpet mats. It blew some of my personal credibility. Nothing I'd like to do is wind back the clock and have both problems surface at the time same time.

Q: How is the pedal recall coming along?

Carter: In the first four days alone our dealers repaired 225,000 of them. Some dealers have put together assembly lines in their service departments and are repairing (collectively) 52,000 a day. We'll fix this and move on.

Q: How do you earn back credibility with the media, as well as consumers?

What we need to do is take care of consumers. Carter: What we need to do is take care of consumers. I know that when I'm standing on stage, and you hear me say that, it sounds like spin. But find a company that shut down its assembly lines for a week to take care of its customers. I didn't have the gas pedals in the parts depot. We shut down so we could take 25,000 pedals right off the assembly lines to get them to dealers while we came up with the reinforcement bars. There wasn't hand-wrangling over this. I didn't have to go through 25 business plans. We just knew it was the right decision. We probably won't know the full financial impact for a couple more weeks. It's not factory spin.

Q: Some of your competitors have taken some aggressive hits with incentives and ad campaigns targeting Toyota.

Carter: Shoot me if I ever do that... low-road advertising. I had plenty of opportunities to do that during bankruptcies and recalls. There's been plenty of opportunity to do that, but it's just not who we are.

Q: You've also taken some hits from the Secretary of Transportation, Ray LaHood.

Carter: Regulatory affairs are not my department. But our relations (with the government) were, at times, frayed. We perhaps made some communications mistakes. We sent out some press releases that weren't worded correctly and should have known better.

Q: Let's turn to the Prius brake problem, which led to one of your most recent recalls. What happened there?

There's nothing broken but it gives a sensation that some customers feel uncomfortable with, so we have a software upgrade. Carter: We had put the third-generation Prius on sale in May, in the U.S. It's completely redesigned and a more (braking) robust system, really three systems all managed by an ECU. We had 124 complaints in common on the ABS (that said) when you're doing light braking on a rough surface, the vehicle has lost traction. There's nothing broken but it gives a sensation that some customers feel uncomfortable with, so we have a software upgrade.

Q: But that's limited to the 2010 Prius, and as reported on TheDetroitBureau.com, and AutoBlog, we've seen a lot of complaints – and heard from a lot of owners – reporting similar issues on older Prius models.

Carter: There is some head-scratching here. The second and third-generation brakes are completely different systems. We had the second-generation model on sale in the U.S. for five years and sold 650,000. And we had 104 concerns expressed with NHTSA. In the first days of February, we had 356. What I can tell you is that our engineers are telling us is that there's nothing we can find, but we never stop testing. We have a go-to team we are sending out into the field to look at the cars.

Q: While there's no question there are some definite quality and safety problems, does this seem like it's becoming a feeding frenzy?

Carter: I'm at the point where if someone bumps into their garage door they pull me into court claiming it was a sticky accelerator pedal.

Q: Obviously, sales were hurt in January, when you announced a halt in sales of eight models involved in the sticky accelerator recall, but what do you see going forward?

...we have confidence and trust issues. Carter: It's far too early to quantify. In January, we lost about 3 points of market share. We had 60% of our inventory on stop-sale. But if you look at just the series not on stop-sale their sale was virtually identical to (recent months). I do agree we have confidence and trust issues.

Q: You used to have an image of being just plain bulletproof, and that seems like it will be difficult to get back.

Carter: Time will tell, but you say we had a perception of being bulletproof. I hope nobody from Toyota ever felt that way. Once you feel that way, you're over the edge in arrogance. One things sure, when you do make a mistake, you can have a greater influence (on your image) by how you respond to that mistake.



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