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Getting Too Big, Too Fast Was Toyota's Downfall

Company broke its own rules in the race to No. 1

By Rob Quinn,  Newser Staff

Posted Jan 29, 2010 5:29 AM CST
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(Newser) – Execs at rival firms used to puzzle over how Toyota could possibly expand so fast while maintaining quality. As the recall crisis continues growing, they know now it couldn't, writes Paul Ingrassia. Toyota sensed weakness among US automakers and opportunity in emerging markets over the last decade and badly overstretched itself, Ingrassia writes in the Wall Street Journal, noting that Consumer Reports now ranks Ford higher than Toyota.

Toyota used to swear by "never building a new product in a new factory with a new workforce," but it abandoned that policy when it started building the Tundra pickup in Texas in 2006, Ingrassia notes. To turn itself around—and the company has plenty of resources to do it—Toyota will need to abandon its insular style and start developing stronger leadership in other countries, Ingrassia writes.

Toyota's still-expanding recalls over faulty gas pedals and an unprecedented decision to stop selling and building some of its top-selling models in the US are costing the carmaker dearly.
Toyota's still-expanding recalls over faulty gas pedals and an unprecedented decision to stop selling and building some of its top-selling models in the US are costing the carmaker dearly.   (AP Photo/Frank Augstein)
Visitors walk by a vehicle on display at a Toyota showroom in Tokyo, Japan.
Visitors walk by a vehicle on display at a Toyota showroom in Tokyo, Japan.   (AP Photo/Shizuo Kambayashi)
An unsold 2009 Matrix sits at a Toyota dealership in Boulder, Colo.
An unsold 2009 Matrix sits at a Toyota dealership in Boulder, Colo.   (AP Photo/David Zalubowski, File)
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General Motors held the title of 'world's largest car company' for decades before things began to go wrong there. Toyota grabbed the top spot last year, and things started going awry in just a matter of months. Maybe it isn't good to be king after all. - Paul Ingrassia

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COMMENTS
Showing 3 of 5 comments
SilenceDogood
Jan 29, 2010 12:03 PM CST
Toyota is 1st rate company and will resolve this issue quickly and professionally. I wish that GM was half the company.
JoeQ
Jan 29, 2010 5:23 AM CST
Considering the size of the company, the quality of Toyota products is frankly astonishing. I'm not about to buy a Ford next time just because of this hit piece.
Doctor-Zaius
Jan 29, 2010 3:09 AM CST
I always find it funny that companies will do almost anything to be number 1 in volume. You almost never hear of a company shooting for number 1 in profitability or ROE. There's only one place left to go when you reach the top and more often than you would think it's a bankruptcy court or a flop-sweat filled 60 minutes interview.
Money • US • World

 
Toyota • General Motors • auto industry • Japanese auto industry • Toyota recall

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