Japan Inc. falls on its face

[Bill Glasheen]

http://www.technewsworld.com/story/6934 ... 1266765202

"One significant safety factor -- the brake-to-idle design -- is critical for vehicles with electronic throttles," Safety Reports' Sean Kane told TechNewsWorld. "While many cars have this, it is notably absent in Toyota and Lexus models."

A brake-to-idle feature lets a driver override the throttle by stepping on the brakes even when the throttle is fully open. This lets drivers regain control of runaway vehicles, Safety Reports said.

Stuff like this makes this engineer shake his head.

The Japanese took advantage of a over confident, arrogant big three car industry years ago. They stole market share on price/quality. It's easier to do "me too" Engineering. That's what Japanese excel in - still do. That's what Toyota took advantage of to capture marketshare. It's a whole lot harder to be innovative on so many different levels; technically, anticipating market trends, etc.

You reaffirmed my earlier point, Joe.

This business story, which likely make it as a Harvard Case History for future MBA programs, is not new. It reminds me a bit of Aetna's rise to the top of commercial health insurance, and subsequent precipitous fall. The same thing happened to Columbia HCA. Both still exist, but they proved that they didn't have what it took to be on the leading edge.

Toyota will survive just fine. Many people want the kinds of cars that Toyota has built up until recently. But like Tiger Woods Inc., the meticulously crafted veneer of perfection is shattered. Only time will tell what both franchises will look like when the dust settles.

- Bill

[Bill Glasheen]

As to the BMW...what is interesting to notice is that modern/current models are all sold with free maintenance for 4 years/50 K miles.

And the required maintenance seems to be minimal...

If BMW were to build 'dogs' imagine the money they would lose on free maintenance...and warranty repairs.

This reminds me a bit of the "car wars" arguments I used to get in with my American-everything-loving friend Rich. Among other things, I pointed out how lowly Kia had started offering 10 year, 100,000 mile bumper-to-bumper warranties. Rich stated that American car companies didn't need these kinds of empty promises because they made good products in the first place.

Oh how the mighty have fallen.

• GM is now Government Motors
• Chrysler was sold to Fiat

Oh how the meek have risen.

• Kia Soul named small car of the year.

Put up or shut up. When you put up, chances are the pin-headed MBAs running the company will get real and see to it that the science delivers.

Or else.

- Bill

[IJ]

The next gas pedal? From the AMA email summary:

FDA to assess cardiovascular risks with Avandia in patients with diabetes.

ABC World News (2/22, story 9, 0:30, Sawyer) reported that "the FDA said it is reviewing" diabetes drug "Avandia [rosiglitazone] for possible risk of heart attack. Over the weekend, a Senate report said the drugmaker, GlaxoSmithKline, knew of the possible danger for years. One report raised a possible connection to 83,000 heart attacks between 1999 and 2007."

The Senate report also "concluded that [Glaxo] had threatened scientists who tried to point out Avandia's risks," the New York Times (2/23, D1, Harris) reports. In one instance, Dr. Steven E. Nissen, a cardiologist at the Cleveland Clinic, met with "four company executives" after Nissen "conducted a landmark study that suggested...Avandia raised the risk of heart attacks." Nissen "said...that the executives hoped to persuade him not to publish his study by suggesting that they had contradictory information they would share with him in a joint study."

Still, the FDA "said...that for now, patients should not stop taking" Avandia, USA Today (2/23, Rubin) reports. The agency "said it was reviewing data received in August from...a large, long-term, company-funded study designed to assess Avandia's cardiovascular risks in patients with type 2 diabetes." An advisory panel is expected to meet in July. But, Endocrine Society president Robert Vigersky said that "everybody's best interest would be served" if the meeting were held sooner. Janet Woodcock, director of the FDA's Center for Drug Evaluation and Research, said, "We feel that it is time for a thorough evaluation of all the cardiovascular risks with that drug."

The Wall Street Journal (2/23, Mundy, Favole) reports that Vigersky questioned the agency's delay in reviewing data that it received last year. Meanwhile, Woodcock said that although "some individuals within the FDA continued to believe...that the drug should be withdrawn," the agency lacks any "new information that raises additional alarm about the drug."

The Forbes (2/22, Mintz) "The Science Business" blog noted that the FDA is reviewing data from a study published in the Journal of the American College of Cardiology that "showed that when giving Avandia to patients with class 1 and 2 heart failure," the drug "did not statistically increase the rates of heart failure, death, or heart attack."

The Senate report "also pointed out...that FDA safety officers are under the control of officials who approve new drugs," CQ HealthBeat (2/23, Reichard) reports. Grassley said, "It doesn't make any sense to have these experts, who study drugs after they have been on the market for several years, under the thumb of the officials who approved the drug in the first place and have a natural interest in defending that decision." Reuters (2/23, Richwine), HealthDay (2/23, Mundell), MedPage Today (2/22, Walker), and Dow Jones Newswire (2/23, Favole, Munday) also covered the story.

[Van Canna]

http://tinyurl.com/ygbd9md

WASHINGTON - Federal prosecutors have launched a criminal investigation into Toyota Motor Corp.’s safety problems, and the Securities and Exchange Commission is reviewing what the automaker told investors, the company disclosed yesterday.

The developments created new public relations challenges for Toyota plus the prospects of hefty federal fines or even indictments against executives in the United States and Japan.

They also complicate Toyota’s ability to discuss details of its recall of 8.5 million vehicles because anything executives say could be used against the company in court.

Top Toyota executives were expected to testify at hearings today and tomorrow on Capitol Hill. One lawmaker said he believed Toyota misled owners about the repairs and relied upon a hastily arranged study to reassure the public.

In a new filing with the SEC, Toyota said it received the grand jury request from the Southern District of New York on Feb. 8 and got the SEC requests Friday.

It was not immediately clear what US laws Toyota might have broken. A subpoena would specify why prosecutors sought company documents, but Toyota would not comment beyond its disclosure with the SEC.

A spokeswoman with the US attorney’s office for the Southern District of New York declined to comment.
The government could be looking into product safety law violations or whether Toyota made false statements to a federal safety agency involving unintended acceleration or the Prius braking system, said Peter Henning, a law professor at Wayne State University in Detroit.


The SEC is seeking documents related to unintended acceleration as well as to its disclosure policies and practices, Toyota said.


Eric Dezenhall, a crisis management consultant in Washington, said the subpoena might cause Toyota to limit its testimony before lawmakers because apologies are admissible in court. He predicted the company would walk a line between carefully phrased testimony and enough disclosure to describe the cars’ mechanical problems and steps Toyota had taken to make the vehicles safer.


House investigators said they believe Toyota intentionally resisted the possibility that electronic defects caused unintended acceleration in their vehicles and then misled the public into thinking its recalls would fix all the problems.


Representative Bart Stupak, Democrat of Michigan, who will run today’s hearing, said documents and interviews demonstrate that the company relied on a flawed engineering report to reassure the public that it found the answer to the problem.

In a letter to Toyota, Stupak said a review of complaints shows company personnel identified sticking pedals or floor mats as the cause of only 16 percent of unintended acceleration reports.

[MikeK]

From Toyota

House investigators said they believe Toyota intentionally resisted the possibility that electronic defects caused unintended acceleration in their vehicles and then misled the public into thinking its recalls would fix all the problems.

I hope the House investigators have at least a bit of mechanical, software and electrical engineering experience.

Software is a stable entity that doesn't change on it's own, so if there is a problem it should be reproducible in the lab and then on the track. Maybe a problem with data coming in from the electronics?

Electronics are also fairly stable but can be effected by noise generated thermally and electromagnetically. This can be tracked but it really depends on the quantity and quality of information reported by the user. If the user can't give an accurate answer as far as what they were doing when the occurrence happened, and where and what the environment was like it'll be tough for anyone to recreate the specific situation to find the fault. Been through a few of these and getting good information from a user is always tricky and needs lots of diplomacy and tact.

This is going to be tough for Toyota because I don't see how they can make themselves look good. If they can't reproduce the problem they look stupid or worse like they're hiding something. If they rigorously debrief the user to find the problem they look mean and like they're passing the blame.

[Joe Bellone]

Mike,

I don't disagree with what you state generally, however I believe there's a philosophical component here with regards to the Toyota issue.

No product released is defect free. While code my look "perfect" when developed in a "silo" when it interacts with other varibles things may not work properly. That's why test processes before release need to be as robust as possible. However, you can't test for everything but try to balance cost versus norm.

BUT...

With over 8.5 Million cars out there on the road at X number of years, there's a tremedous amount of "run time hours" that can/could be accumulated from numerous data points. With the Japanese zealousness for "data" I have a very difficult time believing Toyota did not collect "a whole lot of data" around this defect.

What really gets at the root of the issue for me is - a company which prides and sells itself on quality and doing the right thing for the customer, didn't. I strongly believe they knew about the problem early on, then made a very deliberate decision based on "data" that justified whether to do something earlier would have been economically prudent for the COMPANY not the customer. I believe that Toyota looked at and knew how many defects would have occured out of "x million" and looked the other way because on paper it looked reasonable to do so.

If this same situation happened in Japan, there would be a ban on all US auto imports.

Finally, a company that adopted the Kaizen principle of continous improvement fell flat on its face. Either a tremedous amount of people along the chain within Toyota totally missed this issued (which is a problem) or they did nothing about the problem (which also is a problem).

Joe

[MikeK]

Joe,
I've done a lot of data collection when tracking down a defect, the issue isn't just the data collected, but in the data that doesn't get passed on from the point that experienced the failure. If I have millions of products in use and a very small percentage of them are reporting a defect I have to start with what makes them different from all the other products that aren't reporting problems. Especially if I've already tested the systems before shipping.

Everyone is making that the woman who said she topped 100 mph for six miles is giving a totally accurate account. I doubt she's making this up, but I do wonder if she is missing something herself. While Toyota and CTS and everyone else along the problem chain need to have their feet held to the fire, but so do the users. And that can get ugly.

[Bill Glasheen]

While Toyota and CTS and everyone else along the problem chain need to have their feet held to the fire, but so do the users. And that can get ugly.

It is ugly, Mike.

One need not go far to see why EVERYTHING needs to be put on the table. To wit... Here's a piece of history on the matter.

Audi Investigated for Unintended Acceleration

If youre not familiar with the 60 Minutes feature, it featured a variety of “victims” including one distressed mother, Kristi Bradosky, who had unintentionally killed her six year old son Joshua when her “foot slipped off the brake pedal onto the gas pedal accelerating the auto,” according to a statement taken by Canton, Ohio police officer Steven Zerby. Of course, the 60 Minutes episode that initially ran on November 23, 1986, titled “Out of Control,” and then ran again on September 13, 1987, declined to mention the police report, but rather took an excerpt that featured Mrs. Bradosky stating she had only pressed the brake.

Furthermore, the show went to great lengths in showing a “doctored” Audi 5000, set up to “lunge” forward on its own. Set up? To be clear, William Rosenbluth, an automotive consultant retained by plaintiffs in a suit against Audi, stated he drilled a hole in an Audi transmission and funneled fluid into it. The resulting filmed sequence, which featured the accelerator pedal moving downward on its own, provided 60 Minutes with critical visual “evidence” needed to cite the Audi 5000 with dangerous vehicle status. Rosenbluth said that 60 Minutes requested to film one of his tests, and that the show was fully aware of what he was doing. “My objective was to demonstrate that you could get an [unintended] acceleration,” commented Rosenbluth. Through manipulating the transmission, he managed to get the Audi 5000 to move on its own, but the 60 Minutes feature never brought to light that the car in question had been manipulated. “We were appalled that 60 Minutes put this thing on the air,” stated John Pollard, a principal investigator hired by NHTSA for its study. “It was a stunt…. It does not represent a real-life situation.”

While the 60 Minutes debacle is interesting history, it represented a crushing reality to the Audi brand, nearly driving it into bankruptcy. Even after the brand was vindicated by the NHTSA, and Audi told the world the truth via full-page ads in newspapers and magazines throughout North America, it took over a decade for a return to the sales levels it enjoyed pre-60 Minutes.

- Bill

[Joe Bellone]

Just so I'm clear, you're stating that accountability is shared for the defect and it's just not the manufacturer's responsibility for taking ownership of the problem?

Joe

[Bill Glasheen]

Earlier Ian gave me a hard time when I asked him if he read the Wall Street Journal. The implication was that I wasn't being completely forthright and was attempting to malign Toyota via innuendo. *

First... Back when Rich Castanet used to work for GE (in the Jack Welch days), one mantra of the company was never do anything that will get you on the front cover of the Wall Street Journal - in a bad way. The WSJ is an investor-friendly paper. They are hardly granola-eating liberal greenies. So if the WSJ has cast its critical eye in your corporate direction, you probably did something really bad and you probably deserve the negative attention. WSJ's agenda? Protect the investor. Fair enough!

With all that in mind... Whenever there's a business brouhaha, WSJ online will often organize all the articles on the subject in a single heading. That way if you want to do research on the subject, it's all there in one place.

And so here we now have this subheading which can be clicked on from the front page of WSJ online. And last I checked, there are 20 articles and counting. Volume speaks volumes.

Toyota Recall

If you don't have a subscription, you won't be able to get too far in any of the articles. But you'll get the general idea.

- Bill

* Ian is my student and friend. He and I have a special relationship. He's smarter than I am, and can be just as challenging to debate - if not more so. Don't misinterpret our dialogue when the two of us go at it. It's just a mental exercise, designed to uncover truth.

[Joe Bellone]

Bill,

I enjoy the different viewpoints. Having spent time getting the 3rd degree from our overseas friends on our quality issues, I'm very interested in "knowing the truth" around this whole debacle.

Best regards,

- Joe

[MikeK]

Just so I'm clear, you're stating that accountability is shared for the defect and it's just not the manufacturer's responsibility for taking ownership of the problem?

Joe

What defect? Has anything been pinned down? From what I see Toyota is fixing things that may or may not have anything to do with the "unintended acceleration" that a few drivers have reported. If no one can consistently recreate the problem electronically, mechanically or in software then that leaves a defect that occurs in very small quantities or users.

Like Bill said, everything has to be on the table, and that includes the possibility of user error (pressing the wrong pedal, spilling their double latte mocha onto the console, dialing their cell phone and not realizing that they increased their speed, etc).

I drive a Toyota and want to know if it's safe, but at the same time I don't want the company chasing after red herrings instead of the actual problem.

[IJ]

Haha, no Bill, the implication was just that I wanted to see the source article!

After seeing Lentz answer "I don't know" to 100 consecutive questions, I think I would have asked, "Is there anything you do know?" and let him go home if not. I know the guy's not an engineer, but what is more important this week than understanding these issues?? Could he have brought people ready to answer questions?

*Bill, not sure about your addendum's accuracy but I appreciate the vote of confidence!

[IJ]

1) Braking problem uncovered with the Ford Fusion Hybrid -- failed to respond to usual pedal pressure. "Ford notified owners of the Fusion Hybrid ... to contact their dealer for a softwear fix."

2) CR suspends recommendations on 8 Toyota models.

3) Top Picks:
--family sedan: Nissan Altima
--small sedan: Hyundai Elantra SE
--sporty: Volkswagen GTI
--small SUV: subaru forester
--best car overall: Lexus LS 460L
--green car: Prius
--sports sedan: Infiniti G37
--van: Mazda 5
--pickup: Chevy silverado 1500
--family SV: chevy traverse

4) Owner satisfaction:
--Highs: dodge challenger, ford fusion hybrid, corvette, porsche 911, prius, acura TL
--Lows: sebring (37%!), nitro, caliber, colorado, cobalt

5) Carmaker Ratings

Honda and Subaru tie for first at 77. Toyota follows at 74, with Hyundai and Nissan at 73 and 72. Volkswagem, Mazda, Mercedes, BMW, Volvo, Ford, and Mitsubishi follow, declining from 72-63. At the bottom: GM at 57 and Chrysler at 46 (yech).

Reliability charts show Honda at the top with a fairly narrow range of quality, whereas Toyota's band is far wider and crosses the average reliaiblity point. Mitsubishi is third with a very consistent / narrow band, and others follow. An aging chart follows, showing that Toyota vehicles age best with Honda close behind, both clearly better than the rest of the pack. VW is the worst, with Hyundai following close behind.

[MikeK]

http://liveshots.blogs.foxnews.com/2010 ... stigation/

Driver Error in Toyota Prius Investigation

Posted By Becky Diamond On March 22, 2010 @ 2:47 PM In Technology, U.S. | No Comments

According to Police Captain Anthony Marraccini, driver error caused the crash of a Prius on March 9th 2010 in Harrison N.Y. and not faulty brakes.

In an investigation of the incident, Harrison Police Captain Marraccini said the brakes had not been applied, a finding that contradicted claims from a 56 year old woman who told police that the car had accelerated as she drove down her employer’s driveway and hit a stone wall. The woman told police that she had hit the brakes but the car did not respond.

Below is a transcript of what Captain Marraccini told Fox News on Monday:

"The vehicle accelerator was compressed and there was no brake application. We looked at data extracted from the car’s computer system. We looked at the vehicle diagnostic trouble code and we have video taped every key stroke that Toyota made while they extracted the data so we know the data is reliable and trustworthy.

"The event data recorder showed two collisions in this case. The first was a minor collision when the car impacted the curb. There as a speed indication of 35 miles per hour and an indication of deceleration. The second event recorded the main collision. We have indications that the car was traveling 27 miles an hour at the point of impact. The diagnostic data shows that the accelerator pedal was depressed at the time of impact and was in the idle position after impact. The pedal was returned to its normal position after impact.

"Censors on the gas pedal showed that the throttle position was depressed fully by the driver. The data indicates the accelerator was depressed. There was no pressure applied to the brakes at the time. The shift sensor was in drive and the accelerator sensor indicated that accelerator was fully depressed. There is no indication that the brake lamps were on.

"The data provided to us through this process is conclusive to us and I think that its factual data. Toyota provided us with the data and there is no possibility of distortion of the data.

"The driver is very passionate about her statements. When a driver believes they are on a break pedal they believe it. The operator stated that halfway down the driveway the car had accelerated but she insisted her foot was stepping on the break pedal.

"I believe that based on the factual information that we have it was driver error. With all of the hype about Toyota people are trying to point fingers. The operator believes she depressed the brake but that isn’t the case here."

Police did not file charges because the woman did not intentionally deceive authorities.