NHTSA Announces a Recall of Toyota's Paperwork - Did Toyota Follow the Recall Process?

Jeffrey Immelt, GE's CEO, said at a West Point Graduation in 2009, "The only way to sustain a real competitive advantage is to invest in the needs of tomorrow. The federal government has always been an important contributor to innovation. Similarly, businesses need to invest more in technology and take more risks. Engineering has been underemphasized in this country for a generation. If we're going to be serious about innovation, then we've got to do a much better job training the next generation of innovators."

Today CBS news quoted in it's series, 'Putting America Back to Work', Immelt as saying, "The way we have been thinking about manufacturing and outsourcing in the past is unsustainable". For an example, CBS reported that out of the 250 million Apple I-Phones sold internationally, not one of them was made in the United States.

In the last decade, while some big companies have been touting keeping the design, marketing and management in the states and outsourcing the rest of the work, we are kidding ourselves, if we think those countries don't also want a piece of that white collar pie. American's need to think in new ways and become competitive to keep manufacturing in this country.

Is American manufacturing better or worse than Japan's Toyota Product system?

In terms of six sigma and lean manufacturing, one of the most revered companies out there is Toyota. And in fact, the Toyota Production System (TPS) is taught to lean students all over the world. The 14 principles of the Toyota Way teaches more than tools and techniques, though. Just like W. Edward Deming's 14 points,the Toyota production system teaches a philosophy.

For American manufacturing, it encourages a paradigm shift of epic proportions; give the employees what they need to do the job, and empower them to make it better!

As revered as Toyota is for their manufacturing philosophy, am I the only one wondering how they could have allowed this recent recall situation to get so out of control, particularly since total quality management is one of their main principles, too?

Washington Times reports that "The US Government has demanded a timeline and papers from Toyota on the recalls." Apparently under the current legislature, manufacturers are obligated to notify the NHTSA (National Highway Transportation Safety Administration) within 5 days of discovery of a manufacturer's defect that could result in a recall.

Did Toyota follow the NHTSA's recall process or did they bypass the system by stopping production?

The NHTSA announced today it is using its statutory authority to obtain documents from Toyota to determine if the automaker conducted three of its recent recalls in a timely manner.

With one of the Principles of the Toyota production system as being "the right process will produce the right results", it will be interesting to hear whether or not Toyota followed the NHTSA process for reporting defects with their product, or whether they perhaps came up with their own process.

NHTSA on their website reports that "The first recall was announced on September 26, 2007, and was followed by a subsequent one on October 6, 2009. The October recall was expanded on January 29, 2010, to include additional vehicles. The third recall, involving sticking gas pedals, was announced on January 21, 2010. Click here for more information.

What is not yet known is whether Toyota modified their production methods significantly before notifying the NHTSA or their existing customers, of the potential safety issue.

Toyota will have up to 30 days to provide documentation to the NHTSA, and "If agency officials determine that an auto manufacturer violated its statutory obligations, the manufacturer could be liable for a maximum of $16.4 million in civil penalties." (NHTSA)

While auto and airline industries are a bit different, see my "12 Steps for a Recall" based upon my professional experiences in the airline industry.

Sources:

http://www.si.umich.edu/ICOS/Liker04.pdf

http://www.washingtontimes.com/news/2010/feb/17/us-government-demands-papers-on-toyota-recalls/

http://www.washingtontimes.com/news/2010/feb/16/pruden-the-red-hot-scam-begins-to-unravel/