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Con: Toyota’s safety, quality record belies current piling on

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Nick Schulz
April 3, 2010
EDITOR’S NOTE: The writer is addressing the question, Should Toyota offer buybacks to consumers who bought defective models?

It is possible that new, damning details could come to light about Toyota’s response to faulty accelerator claims. But absent new revelations—and if we are to judge based solely on what we know now—Toyota is getting a bum rap.


The Japanese carmaker has been stung by a series of reports of customers experiencing out-of-control speeding. The result has been front-page news stories, a product recall, multiple congressional hearings, a big hit to Toyota’s stock price and the threat of multiple lawsuits. To top it off, some are even demanding Toyota offer to buy back vehicles from its customers.


This last demand is silly. To understand why, it’s time we review some facts and context.


For starters, the reports of sudden acceleration are not limited to Toyota. Indeed, the head of the National Highway Transportation Safety Administration told Congress in testimony that the level of Toyota complaints was “unremarkable.”


The chief executive of Edmunds.com, a respected resource for automotive information, had his team recently test the Toyota Camry and Prius. They checked Camry brakes to see if they could stop runaway vehicles, which they could. They tested the Prius to see if pressing the transmission shifter to put it in neutral would ease the throttle, and it did.


Several researchers have noted that many of the problem incidents with Toyotas have involved elderly drivers. This was also true with earlier cases of sudden acceleration in autos involving Audi and GM models in which driver error played a larger role than initially thought. In many cases, it is impossible to know all the factors that have contributed to the reported problems. But in the rush to condemn Toyota, policymakers and others have been too quick to dismiss alternative explanations.


Let’s also consider the scope of the problem in context.


As legal scholar Ted Frank recently noted, “Even if one believes all the hype, the reaction so far has been a giant overreaction. Fifty-odd deaths over 10 years and millions of Toyotas is a drop in the bucket compared to the general risk of being on the road at all. It’s entirely possible that more people will be killed driving to the dealer for the recall than lives will be saved from going through the safety theater demanded by the Department of Transportation.”


This might explain why, as my American Enterprise Institute colleague and polling expert Karlyn Bowman recently pointed out, Toyota owners remain loyal to the company.


Forgotten in the firestorm is just how important Toyota has been to global economic growth and prosperity since World War II.


In his landmark study of successful and unsuccessful economies, William Lewis of the McKinsey Global Institute noted that “Toyota has probably had more impact on the global economy today than any other single firm.”


The reason? Toyota pioneered the development of high-productivity and high-quality manufacturing practices that transformed global industry.


“Hundreds of firms now work toward the standard” established by Toyota, Lewis says. This standard significantly elevated global productivity levels, which in turn elevated the overall level of wealth and well-being around the globe.


In this way, the Japanese auto industry, thanks to Toyota, “has probably had more beneficial effects for the economies on the peak of the global economic landscape than any other single industry in any country,” Lewis writes.


Toyota’s competitive drive even saved the American auto industry in the 1970s and 1980s by forcing it to improve performance and make better products.


There is no denying the pain and tragedy that comes from a death or injury related to an auto accident. Toyota should continue to take steps to make its cars as safe as possible. But there is also no denying all cars made today are better, cheaper and, yes, safer than they would otherwise be if it weren’t for Toyota’s hard work over the last half century.


Nick Schulz is editor of American.com, the journal of the conservative American Enterprise Institute and co-author of “From Poverty to Prosperity.” Readers may write to him at AEI, 1150 17th Street NW, Washington D.C. 20036’ Web site: www.aei.org.

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