Word: globalization
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...much. At least not from an engineering, mechanical or even a quality point of view. You don't reach the top gear in the global auto industry unless you make outstanding cars, which Toyota does - most of the time. Though cars are familiar machines, they are also highly complex ones. To create a modern car, a company has to design, engineer, build, buy and then assemble some 10,000 parts. Sell 7.8 million cars, as Toyota did worldwide in 2009 - a horrible year for the industry - and there are billions of new parts with the potential to go kerflooey. Inevitably...
...Toyota dealerships, meanwhile, customers have had to haul their cars in to have the sticky gas pedals repaired. Loyal Toyota owners now have a reason to flirt with other brands, though switching could cost them: trade-in prices for Toyotas have fallen. And at global headquarters in Toyota City, Japan, corporate officers belatedly grasped the seriousness of the situation and tried to make amends. "I apologize from the bottom of my heart for all the concern that we have given to so many of our customers," a chastened Akio Toyoda, grandson of the corporation's legendary founder, Kiichiro Toyoda, told...
...reputation for quality that Toyota has damaged in just a few months took decades to build. Though Toyota was founded in the 1930s, its climb to global prominence started after World War II as the company became one of the exemplars of Japan's miracle - the creation of a successful, technologically advanced economy out of the ashes of war. In the 1950s, the company experimented with ways to manufacture cars more efficiently. Ironically, Japan's awful postwar poverty acted as a spur. The production techniques of American car companies - with heaps of stored components awaiting assembly, and ample machinery...
...management wasn't listening. By then, the heroic stage of Japan Inc. was over; parts of its business culture had become sclerotic. Compared with the nimbleness seen in Silicon Valley, Japan's manufacturers and their systems began to be seen as inflexible, too removed from a changing global economy to adapt. Analysts describe a Toyota management team that had fallen in love with itself and become too insular to properly handle something like the current crisis. "The reaction to [the situation] is a very Japanese thing," says Kenneth Grossberg, a marketing professor at Waseda University's business school in Tokyo...
...strategy is to build "world cars" the way Toyota does, reducing the cost of manufacturing by making sure that more of its models share common parts on a relatively small number of platforms, built at plants around the world. That sounds like the epitome of manufacturing efficiency in our globalized economies. But it also explains why the brakes that caused the Prius' recall are found on Toyota's luxury Lexus 300 too. It's a system that all but guarantees that there are no small problems when a part goes bad, only big ones. In fact, global ones...