Toyota Fights Back: In this the Corporate Rope-a-Dope

Toyota has been like a boxer on the ropes taking punch after punch from the media, Congress, consumers, and other critics.  Mohammad Ali used a strategy called the rope-a-dope.  Ali would lean against the rope taking punches in order to tire his opponent out and counterattack when given the chance.  In more general use, rope-a-dope is when an entity places itself in what appears to be a losing position in an attempt to become the winner.  With the march 8, 2010 counterattack, perhaps Toyota is making its move to “win” in this crisis.  It is still far too early to tell.  However, the counterattack is far cry from the apologies and verbal punches Toyota has been absorbing the past few months. 

As a quick recap, Toyota has had a series of recalls related to sudden acceleration in vehicles.  The sudden acceleration is serious having caused a number of deaths as cars would speed up often exceeding 100 mph.  Toyota’s recall have addressed floor mats and then the gas pedal itself.  Toyota service departments have often been open 24 hours to handle the repair/replacement of the gas pedals.  The televisions airwaves are filled with Toyota advertisements talking about the repair and testimonials from customers saying how they still love their Toyota vehicles. 

Recently Toyota has been taking punches from Congress that have been amplified by the traditional and online media.  The key charge is that Toyota has not really found that problem.  The argument is that the problem is really in the electronics, not the mechanical system as Toyota says.  This is pivotal distinction.  If Toyota has not solved the problem, its customers are still at risk from its flawed product.  At best, Toyota looks incompetent as it cannot find the problem,  At worst, Toyota looks like it is ignoring a safety problem by pretending the pedal design is at fault when they know it is the electronics.

A key piece of evidence being used against Toyota is an “experiment” conducted by David W. Gilbert, an automotive technology professor at Southern Illinois University-Carbondale. 

“Gilbert told a congressional hearing Feb. 23 that he recreated sudden acceleration in a Toyota Tundra by short-circuiting the electronics behind the gas pedal — without triggering any trouble codes in the truck’s computer.

The trouble codes send the car’s computer into a fail-safe mode that allows the brake to override the gas. Gilbert called his findings a “startling discovery.”

House lawmakers seized on the testimony as evidence Toyota engineers missed a potential problem with the electronics that could have caused the unwanted acceleration.” http://news.yahoo.com/s/ap/us_toyota_recall_electronics;_ylt=AhF0kk4JAJTINoJOzqYMv5cEq594;_ylu=X3oDMTNocnYwbTBnBGFzc2V0A2FwLzIwMTAwMzA4L3VzX3RveW90YV9yZWNhbGxfZWxlY3Ryb25pY3MEY2NvZGUDbW9zdHBvcHVsYXIEY3BvcwM2BHBvcwM2BHNlYwN5bl90b3Bfc3RvcmllcwRzbGsDdG95b3RhZGlzcHV0

Toyota could no long rest against the ropes and is now fighting back.  The cornerstone of the counterattack is testimony from Stanford University professor Chris Gerdes, director of Stanford University’s Center for Automotive Research, and a consulting firm, Exponent Inc.  For most people, Stanford would seem more credible that Southern Illinois.  However, the Stanford Center for Automotive Research and its engineering school receive money from Toyota.  Gerdes maintains his analysis is independent but there are reasons for doubt to creep in.  Experts seem to agree that the conditions found in Gilbert’s “experiment” are extremely unlikely to occur in the real world. 

The stakes are high.  In addition to reputation and sales loss, Toyota is facing intensified Congressional scrutiny over the electronics concern.  This includes accusations that Toyota has ignored the safety issue since 2006.  Toyota has hired a former U.S. Secretary of Transportation to head an internal examination of its quality and safety issues.  A third-party expert is a way add credibility to such investigations.  Here part of the announcement:

“Toyota Motor North America, Inc. (TMA) announced today that former U.S. Secretary of Transportation Rodney E. Slater will lead an independent North American Quality Advisory Panel to advise the company’s North American affiliates on quality and safety issues.

The panel will work closely with Toyota’s North American leadership team, and will have direct access to Toyota Motor Corporation President Akio Toyoda.

‘I am pleased that Secretary Slater has accepted our invitation to lead the distinguished group of safety and quality experts who will help Toyota to improve its quality controls in North America,’ said Yoshi Inaba, President and Chief Operating Officer of TMA. ‘We are committed to more transparency regarding our safety and quality controls, and the independent advisors will have our full cooperation and access to any information they believe they need.’ http://pressroom.toyota.com/pr/tms/former-u-s-secretary-of-transportation-154569.aspx

Questions to Consider

  1.  Is it appropriate for Toyota to try to disprove the claims of an electronics problem?  Why or why not?
  2. What does Toyota have to gain with a counterattack?
  3. What does Toyota have to lose with a counterattack?
  4. Can a corporate rope-a-dope be an effective crisis response?  Why or why not?
  5. What ethical issues arise when a corporation uses a counterattack?
  6. What are the ethical issues for Toyota and Stanford in the funding connection?
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