Are Toyota's Woes Warranted or Protectionism?

By now you have had some form of conversation regarding Toyota and the 'flurry' of  recalls affecting a list of vehicles which not only include their pick-ups but also their luxury coupes and the Prius hybrid.  Toyota's problems seem to be taking a center stage over other more newsworthy items.  But, then again people tend to like bad news so I guess we find it easy to pick on the largest automaker in the world, which just happens not to be domestic.

Once the recalls started from the ill fitted floor-mats, to a dynamically designed breaking system for the Prius, people started to point fingers and began to dig deeper into a company which has developed one of the best reputations in the industry.  One lady approached me and with an accusatory tone stated, “You know Toyota invented 'Lean Management'.  Its no wonder they are having so much trouble.”

I found this statement very interesting and it resulted in me looking into just what  “Lean Management” has to do with Toyota’s woes.   What I found was that lean management has not only put Toyota on top of their game over the past 30 years but it is probably fair to suspect why several Toyota models are in the recall list in the first place.  However, these recalls really have nothing to do with why the media is having a field day at the expense of this auto-maker.

First off, lean management, or better “Lean Manufacturing” is a principle that was developed by Toyota.  It was put into practice by Toyota and in it's most common form, works from the perspective of the customer where “value” is defined as any action or process that a customer would be willing to pay for.  Basically “lean” in this sense preserves value to the end-buyer by cutting out processes that do not benefit the customer.  In practice, one aspect of this is that Toyota employs lean manufacturing in the same way, and as a result when they develop vehicle components, those same components are used in several Toyota models.  This is opposed to a manufacturer that uses multiple dies or even suppliers for a similar or same component for different models.

These lean management principals allows the company to improve the “value” of each component being purchased by the consumer, and in turn cuts expenses.  This is in no way a dangerous practice, it is not only smart business but can actually develop superior manufacturing practices.

Another practice of lean management is to only stock components as needed.  In this manner, the manufacturer does not store parts that can become dead stock, which can result in smelting of older components.  Which is seen as wasteful and can decrease the value to the end buyer.

But when you look at the list of recalls Toyota is dealing with you quickly realize that the problems are few but each problem affects several vehicle models.  This fits well into the lean management principle, since the same or even similar components are used to solve the problems across the board.

In essence, if Toyota was allowed to deal with these problems on a Company to Customer basis like all other vehicle manufacturers, we would not be sitting in sports bars poking fun at Toyota.  Quite frankly, unless you owned one of the recalled vehicles few people would have known of these recalls.

However, what Toyota was probably not counting on was the transfer of power in the USA to Obama and the shift in the economy which has turned governments into shareholders of competing vehicle manufacturers.

Shortly after US President Barack Obama took power, his government started to voice their concerns over their collapsing economy and cited “Buy American” as a major policy.  This position smacked strongly of the 1930s Smoot-Hawley Act which closed the US borders ending cross border trading with other nations.  Other countries followed suite, and the world fell into a deep depression, known by many as the dirty thirties.

Obama's policy of protectionism is not mere speculation. Before Toyota's recalls took hold, the US was already slowing the progress of many free trade agreements worldwide including talks with South Korea.  The USA has been stalling these agreements in an effort to protect their auto industry, since one of the major Korean exports are automotive.  The Korean-US free trade agreement would see the Korean auto industry benefit more than American interests. Barack Obama has openly stated that the agreement does not pay “proper attention” to Americas keys industry sectors.   Sen. Hillary Clinton has also stated that the agreements are “inherently unfair”.  

It would be fair to say that this protectionism is partly behind why the Media has made such a loud noise over Toyota's vehicle recalls.  The latest challenge to Toyota came in the form of the US Government opening an investigation into the brake problems of the Toyota Prius.  These brake problems are unique to the Prius because of the nature of hybrid vehicle technology.  In a nut-shell the brakes on a Prius not only stop the vehicle they engage technology that generates electricity to charge the vehicle's batteries.  This gives the brakes a different feel, something that many people are not used to. Whether, the Prius brake recall is worthy of an investigation by the US government, a governing body that has public interest in competing automakers, I am not convinced.

Quite frankly, Toyota's woes are out there for all to see and if anything “Lean Management” is not a direct cause.  However a quick search on Google of other automotive manufacturers recall lists will provide recalls that in many cases have caused bodily injury or even death.   In light of this one wonders why a Japanese auto-maker has taken the brunt of bad Press.  So, are Toyota's woes warranted or protectionism?