Greg Roach's Berkshires Blog
Friday, April 25, 2008
  Crisis Management 101
I saw all the old Toyota trucks in the lot and wondered what in the heck was going on. Thanks to Glenn, now we know.
Over the past two weeks since Toyota Motor Sales announced an extended warranty for Tacoma pickups built between June 1995 and September 2000 because of a rust problem that rots their frames, the local shop has been inundated with customers.

As of Thursday, K & M had accepted 58 Tacomas that had the rust problem and has had to postpone any more inspections, be-cause there's no more room for the pickups in the parking lot, according to Leroy Burns, service manager.

"Most of the people are sad to see their vehicles go, but at the same time the money's making it worthwhile," Burns said. "It's a very popular truck, and with what Toyota's offering, people are taking advantage of it."

And Toyota's reaction to the poor corrosion prevention is textbook 'turning lemons into lemonade.' I am beginning to look at buying a truck as my trusty little Pontiac approaches its 11th birthday and Toyota definitely has my eye.
A)This is the best marketing scam I've seen in a long time. The free advertising they are getting out of this will more than make up for the expense of having to replace a portion of the 813,000 trucks.

B)People who never considered Toyota maybe swayed to purchase one thinking that the company will be this responsive in the future.

C)While other manufactures will have to spend millions on advertising, rebates, promotions, added extras - Toyota will be moving vehicles off their lots at little to no discount, create brand loyal customers, and re-coup a portion of the cost in selling the scrap for recycling.

D)The demand on new Toyota trucks will no doubt create a shortage which will keep their selling price high.

E)"Other Toyota models are not affected because the frames were built in Japan, not at a U.S. plant in California, according to the Web site." Good old US auto workers. The company should give them all a raise for creating this marketing ploy.
Snoop....."Good old US auto workers". I hope you are referring to the Corporate Executives who make the decisions to put out a shitty product on purpose and not the workers who only do what they are told to do?
Jack--keep in mind, now, that a lot of these workers aren't told what to do by executives, but by their union.

Trade unions have brought many benefits to the American worker, and they're absolutely necessary to prevent widespread labor exploitation.

Having said that, though, the folks who RUN those unions generally take a short-sighted view of labor negotiation and have set up some questionable precedents. Just keep in mind that a lot goes into making a car and you can't lay the full blame on the execs here, like you can with, say, the entertainment industry...
I have some familiarity with the automobile business both on the union and the management side. While I am not familiar with this specific problem, it sounds like purely an engineering problem possibly due to unfamiliarity with the road salting habits specific to different parts of our country. Since the extended warranty has mostly affected vehicles in the northeast, it looks to me as if the problem could perhaps have been avoided by an inexpensive deflector shield. It doesn't sound at all like poor workmanship.I am familiar with the plant and its culture. It is not a "problem" plant. It's important to remember that most of the welding and body work done on todays cars is performed by robots not individual workers.
The company is indeed doing the right thing and thus both the company and its customers profit by the actions taken.
Ross...Your red necktie (Republican Gang Colors) and lapel pin are showing!
Gramps...You may be correct. I always find it interesting that our products are manufactured with aging defects built in to them. "Build them good, but not that good" This of course feeds the aftermarket industry.
I don't know if it was the corporate execs, the engineers, or those who actually built the vehicle.

A couple thoughts on Grandpa's ideas - How come Japan's engineers can figure out road salt conditions, but engineers in this country couldn't? Wouldn't the deflector shields be the same part no matter where the vehicle was assembled? Just another example of where foreign auto workers have made a better product than their counterparts in this country - why is that?

Perhaps the blame could be laid at the feet of the higher ups in Toyota itself. They change specs for the American version, do a massive recall, sell more vehicles and possibly get a huge hunk of the financing dollars as well.
Snoop - Michigan is one of the states that does not require front license plates. There is a great story about a brand new model of GM pick-up that went out to dealers nationwide. All of a sudden the phone started to ring at the GM Tech Center: "How do you attach the front plates?" Oops.

The culture of large auto companies, in general, seems to occasionally be clueless about things that are not right under their collective noses.
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