Toyota: Guilty or Innocent?

The U.S. Department of Transportation blames the spate of recent crashes not on the automaker but on driver error. Does that let Toyota off the hook?

Toyota and its stock have been hammered over the past year by reports that thousands of Toyotas and Lexus had crashed due to a terrible combination of sudden, automatic accelerations and unresponsive brakes. But it turns out, according to preliminary testing by the federal National Highway Traffic Safety Administration, the accidents were probably due to thousands of cases of human error.

Is Toyota just the victim of bad drivers, greedy lawyers, and U.S. politicians eager to champion U.S. carmakers, or is the company hiding something? As a friend of mine put it last night, Is Toyota innocent until proven guilty, or guilty until proven innocent?

Guilty: Recent reports show that Toyota executive Katsuhiko Koganei sent an email to his U.S. colleagues last January urging them to ¨not mention about the mechanical failures.¨ At the time, Toyota spokesman Irv Miller shot back: ¨We are not protecting our customers by keeping this quiet... The time to hide on this one is over. We need to come clean.¨ 

These internal memos give a strong impression that the carmaker hid problems with its accelerators. And blaming 3,000 drivers is ¨totally ludicrous,¨ says former NHTSA chief Joan Claybrook at consumer advocate Public Citizen. ¨They should be looking at the electronics in their cars and everyone knows it.¨

Innocent: Both U.S. federal investigators and Toyota executives said that ¨virtually all¨ the recent Toyota crashes were caused by driver error. The video below shows that many Toyota drivers put their foot on the gas instead of the brakes. 

Toyota engineers did their own testing of 2,000 wrecked cars, and came to the same conclusion: ¨virtually all¨ crashes were due to drivers who hit the gas instead of the brakes. But as the company's president Akio Toyoda said, blaming customers is not part of the company's PR strategy. 

So perhaps the entire scandal is just the latest result of sensation-hungry media that have blown the story out of proportion?

Ultimately it comes down to whom you trust. As my colleague Fernando Flores put it in his slim book Building Trust (Oxford University Press, co-authored with Robert C. Solomon), ¨In business, politics, marriage--indeed in any significant relationship--trust is the essential precondition upon which all real success depends.¨

In an age of complexity, when your financial advisor knows more than you ever will, when you work with people you may never see, when you strike up ¨friendships¨ on Facebook with people you've never even met, trust has become the quintessential commodity.

So how can you rebuild trust once it is broken? Flores and Solomon write, ¨Trust is a matter of making and keeping commitments.¨

What do you think? Is Toyota guilty as charged, or innocent? I look forward to your comments.

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