Is a Lack of Component Quality Really Driving Recalls?

In 2013 twenty two million cars were recalled in the United States, with seven manufacturers recalling more vehicles than they sold that year!

How is it possible that a company, recognized as a leader in quality vehicle production, recalls more than double its annual new car sales, but still receives quality, safety and durability accolades?

In 2013 Toyota (including Lexus and Scion) sold 2.24 million new cars in North America and recalled almost 5.3 million vehicles to have repairs or modifications carried out, albeit many of them minor repairs.

In 2014 seven Toyota, Lexus and Scion models have captured segment awards in the prestigious American J.D. Power and Associates Vehicle Dependability Study, for vehicles built in 2011; more than any other automaker! Furthermore both the 2013 Camry and 2013 Prius were both awarded the Insurance Institute for Highway Safety's highest safety award. This while more than half of the Prius vehicles ever sold are currently being recalled for a software glitch that could slow down or bring the car to a halt.

Irrespective of the brand’s excellent quality record the recall actions have a negative effect on consumer confidence, as reflected in the share price of the company.

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Image Credit: www.hamodia.com

Toyota’s quality problems in the United States began with an initial recall in late 2009 for problems concerning floor mats. However over the next four months, the company recalled a further 5 million vehicles in three separate campaigns. These related to potentially sticky accelerator pedals, pedal entrapment and software glitches that affected braking on some models.

What happened to Toyota?

Between 2000 and 2007, Toyota’s North American sales increased from 1.7 million units to 2.9 million units, and the company’s lineup grew from 18 to 30 models.
Lead time between exterior design approval and start of sales was compressed to less than 20 months. These accelerated design cycles strained the company’s development and production systems and pushed human resources to the limit, creating an environment for quality lapses.

Takahiro Fujimoto, a leading Japanese researcher on Toyota, reports that in the wake of rapid growth, Toyota increasingly failed to properly evaluate and approve components designed by outside suppliers.
This was well illustrated in the case of the "runaway" Toyota Camry’s Electronic Control Module, where outside suppliers developed both critical CPUs: a V850 supplied by NEC (which later became Renesas) and a second ESP-B2 CPU (sometimes referred to as a monitor CPU) supplied by Denso.

In a 2013 court hearing, embedded systems experts who reviewed the electronic throttle source code testified that they found Toyota's source code defective, and that it contained bugs - including bugs that could cause unintended acceleration (UA).
"We've demonstrated how a single bit flip can cause the driver to lose control of the engine speed, due to a software malfunction that is not reliably detected by any fail-safe," Michael Barr, CTO and co-founder of Barr Group, told EE Times in an exclusive interview. Barr served as an expert witness in this case, and concluded that, the fail safes Toyota installed had flaws in them and were inadequate in reacting to UA caused by the software.

Although the problems experienced by Toyota were attributed to components, the problem really lies with the management systems that were in place which didn’t appear to be quick enough in detecting the failures and instituting corrective action. This coupled to rapid growth in production with reduced lead times have seen the company stretching their resources to breaking point.
Recognizing this, Toyota reorganized and, in effect, deliberately slowed down the product development process by establishing a new team of about 1,000 quality engineers while expanding its rapid quality response teams around the globe.
Although all recalls are not safety critical, it’s up to the OEM (And in America the NHTSA) to respond timeously to prevent injury and loss of life should a "life and limb" problem be encountered.

After GM reported an ignition switch defect to the NHTSA in late January 2014 a recall of over 1.6 million cars with an ignition-switch defect, linked to 13 deaths in crashes, has been initiated. The tragic loss of life is even more regrettable when it appears that GM was aware of the problem 10 years ago.

Why did it take GM 10 years to recall suspect vehicles?

According to a deposition given as part of a personal injury lawsuit, GM first learned of the problem in 2004, when one of GM's engineers accidentally knocked his car out of "Run" while driving.
An internal investigation was immediately conducted and various fixes were contemplated but, ultimately, nothing was done: "After consideration of the lead time required, cost, and effectiveness of each of the proposed solutions, the investigation was closed with no action," a GM report to NHTSA stated.

Later, in 2005, an engineer proposed that GM redesign the key, an idea that was approved but then dropped.
With reports of ignition key related problems still being received, GM opened yet another investigation into the ignition problem in 2009. That study again concluded that GM should redesign the key. This change was implemented in 2010 production.
However there was 6 years worth of suspect vehicles in the field where Cobalt and G5 airbags weren't deploying during front end crashes. Further investigation led to the realization that the problem only occurred on cars produced before 2007.
The reason for this was that the problem had been rectified. Delphi, who supplied the switch, had redesigned the part in 2006 to make it more difficult to turn the key.

Unfortunately even though a GM engineer signed off on the changes, GM didn't update the part number of the switch. As a result, manufacturing records didn't indicate a break-point for the resolution of the problem. Ironically GM was one of only three manufacturers to recall fewer vehicles than it sold in 2013; an accomplishment, the company says, track-and-trace technology enabled them to achieve.

Image credit: blog.lnsresearch.com

Track-and-trace solutions, such as that supplied by business intelligence company Frequentz, allow automakers to identify quality issues and their sources faster, rapidly inform impacted consumers and minimize damage to the brand with prompt resolution. This improves consumer safety and narrows the scope and effect of a recall.


Conclusion

Mass recall’s are not merely a result of faulty production: Poor management systems lead to delayed, indecisive action, where company executives fail to respond aggressively to the early warning signs.
The above examples are powerful reminders that there is no such thing as corporate DNA; and proven production systems, important as they are, cannot be taken for granted.

As new senior management teams move into positions of power, they need to recognize that there are no guarantees that the systems and values that have provided the underpinnings for the organization’s success can be sustained without renewed commitment.

Sources:

• Award winners of the 2014 Vehicle Dependability Study – JD Power
• Thirty-nine vehicles meet tougher criteria to earn 2014 safety awards from IIHS – Insurance Institute for Highway Safety's highest safety award for 2014, Top Safety Pick+
• What Really Happened to Toyota? – MIT Sloan management review
• Toyota Case: Single Bit Flip That Killed (Junko Yoshida) – EE Times
• Transport and environment – report March 2013
• Recall / Sale Ratio Analysis - Frequentz

Peter Els is a technical writer for Automotive IQ