Even automotive history repeats itself. Let’s compare Toyota’s sudden acceleration…
A top Toyota official claimed that a negotiated agreement with U.S. government auto-safety regulators prevented a widespread vehicle recall and saved the Japanese auto giant more than $100 million, according to a document obtained by The Washington Post after it was turned over to congressional investigators.
One of the tools that Ford used to argue for the delay was a “cost-benefit analysis” of altering the fuel tanks. According to Ford’s estimates, the unsafe tanks would cause 180 burn deaths, 180 serious burn injuries, and 2,100 burned vehicles each year. It calculated that it would have to pay $200,000 per death, $67,000 per injury, and $700 per vehicle, for a total of $49.5 million. However, the cost of saving lives and injuries ran even higher: alterations would cost $11 per car or truck, which added up to $137 million per year. Essentially, Ford argued before the government that it would be cheaper just to let their customers burn!
Lesson? If you build something that is dangerous, and try to cover it up, don’t expect a group hug when it becomes public. The “Big Three” had these problems in the 60’s, 70’s and 80’s. Poor safety, deaths, poor quality, cars that rusted on the showroom floor, and poor assembly contributed much to the decline of Detroit. The causes? Poor management, poor engineering, union interference and outright sabotage, all caused too many Americans to lose faith in the US auto industry. The market took its vengeance on them, and only in the last few years have they begun to regain the trust of the public (Well, at least until two of the big three became part of gubbermint motors). It’ll be interesting to see where the current situation leaves Toyota.