[Editor's note: Click there for the sequel to the story. This post was also updated on Jan. 29. See notes below.]
It won't go down as one of the shining moments in corporate crisis management. Five days after deciding to recall eight of its models, Toyota finally decided to stop selling them.
The immediate suspension of sales – and the anticipated temporary shutdown of the factories that produce them starting Feb. 1 – could blow a huge hole in Toyota's earnings at a time when the company is trying to recover from one of worst year's in automotive history.
But it's the right move, because something far more important than quarterly earnings is at stake: Toyota's reputation for safety and customer care.
Public reputations are, to put it plainly, delicate. Just ask Tiger Woods. With the decision to stop selling its eight recalled models because of a rare sudden-acceleration problem (see the list of affected models), Toyota has taken the first step at damage control.
But if it really wants to repair its image, Toyota needs to take many more steps. For a start, it could give Cherie Rossetti her money back.
Ms. Rossetti bought a 2010 Camry at a Dallas dealership this past Thursday afternoon just as Toyota was announcing the recall.
"There was NO mention of a recall," she says. "After buying the car and bringing it home, I called [a friend]. He told me about the recall and told me to take the car back immediately. I took the car back the following day. They claimed that they did not know for sure what VIN numbers were involved."
It's not clear how vehicle identification numbers would be involved since all the 2007-10 Camrys are being recalled. [Editor's note: The company has since clarified that Camry, RAV4, Corolla, and Highlander vehicles with VINs that begin with "J" are not affected by the recall.]
Rossetti offered to leave the car at the dealership until the problem was fixed. She says the dealer refused, claiming liability issues.
The salesman "told me to take the car home and park it until they could figure out a fix and that it might be sometime in February," Rossetti says. "Mind you, this is a brand new vehicle that I would be making payments on and could not drive."
Then there's the curious question of timing. As Rossetti went through the paperwork to purchase her car mid-afternoon, the process was dragging and she had a 4:15 appointment to keep. "When I was filling out the paperwork, I said: 'I'll come and pick it up tomorrow.' [They said:] 'You need to pick it up today. We'll have it done for you.' "
That was around 3:25 p.m. local time in Dallas, according to Rossetti. PR Newswire issued Toyota's recall announcement at 3:19 p.m. Dallas time. That was when the public found out about the problem. It's not clear when dealers did. [Editor's note: Parts of Rossetti's story could not be independently verified because the dealership, John Eagle Sport City Toyota, didn't respond to several requests for comment.]
If the salesman knew about the recall at the time of sale and didn't tell her, isn't that a breach of ethics?
Then again, the dealerships – most of them working hard to serve their customers – have been pushed into an impossible situation by the corporation. Toyota issued its recall but hasn't yet announced a fix for the problem.
That has left dealerships scrambling to try to satisfy customer concerns with no real solution to offer them.
Sudden-acceleration problems are especially tough to spot because they almost never happen and in this case, according to Toyota, usually only happen with wear over time.
So what do you think? Should Rossetti get her money back?
Here's my take: No matter how rare sudden-acceleration problems are, once Toyota admitted it had a problem, it owned the problem. And it's up to the corporation to do everything in its power to make it right to the satisfaction of its worried customers.
So far, that hasn't happened.