Auto Industry Confronts Ethical Controversies
Feb 1st, 2010 • Posted in: NewsToyota continues massive recalls, buffeted by claims it moved slowly on safety issue; Ford hires new workers, but at about half typical wages
NEW YORK and LOS ANGELES
Toyota last week weathered a public-relations disaster amid questions related to business ethics, including whether it cut corners to meet demand and ignored safety red flags.
Industry analysts say that the recalls of millions of Toyota vehicles stem from compromises on quality control, reports the Canadian Press.
“The recalls for gas pedals prone to sticking and faulty floor mats that can entangle the accelerator are a devastating blow to an automaker that had prided itself on a reputation for quality. The safety doubts have also forced Toyota to suspend U.S. and Canadian sales and production of eight models including the Camry, America’s top-selling car,” writes the Canadian Press.
While many say the auto company acted responsibly and in a timely manner when it halted sales, critics contend that Toyota acted too slowly when complaints started coming in.
The high-profile death of four people in an out-of-control Lexus last August put the autos’ flaws in the spotlight, But as the Los Angeles Times reports, the August 2009 accident was “at least the fifth fatal crash in the U.S. over the last two years involving runaway Toyota and Lexus vehicles made by Toyota Motor Corp. It is also among hundreds of incidents of sudden acceleration involving the company’s vehicles that have been reported to Toyota or the federal government, according to an examination of public records by The Times.”
In an editorial, the Times contends: “Toyota’s response to this issue has been too slow and conservative for its own good — or its customers’. The number and variety of reports about sudden acceleration in the years leading up to the [fatal car] crash in August pointed to broader problems than the automaker was willing to acknowledge. Instead, it shrugged off complaints, arguing that the National Highway Traffic Safety Administration (whose methods were also suspect) had found no cause for concern.”
Two congressional committees have begun inquiries into Toyota’s handling of the accelerator problems, according to Bloomberg.
On Sunday, Toyota engaged in its first direct communication with the public by taking out full-page newspaper ads to explain why it suspended sales, reports USA Today.
In related news, Ford Motor Co. was expected to announce that it would begin hiring workers at lower wages — about half the amount that current union members earned when they started, reports the Wall Street Journal. The new second-tier wage was a major union concession, reports the Journal. The move raises an ethical issue relating to treating employees equitably, as well as the dilemma of short-term employee pay issues versus the long-term health of the company.
Sources: USA Today, Jan. 31 — Bloomberg, Jan. 31 — Los Angeles Times, Jan. 29 — Wall Street Journal, Jan. 29 — Canadian Press, Jan. 28 — Los Angeles Times, Oct. 18, 2009.
For more information, see: Related Newsline story, Jan. 4 — Related Newsline story, Dec. 14, 2009 — Related Newsline story, Aug. 31, 2009 — Related Newsline story, Aug. 24, 2009 — Related Newsline story, Feb. 9, 2009.
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