THE AUTOEXTREMIST

April 7, 2010

The One Thing I didn’t want to write about this week.

By Peter M. De Lorenzo

(Posted 4/6, 9:15AM) Detroit. The auto industry has been on an endless cycle of intense Sturm und Drang for going on three tumultuous years now. Churning through financial upheaval, bankruptcies, mergers, acquisitions, boneheaded maneuvers, brilliant plays, technical excellence, wild-eyed hubris, unfettered greed and an exuberant design renaissance, I can safely say that the entire 125+ year roller-coaster history of the automobile business has been encapsulated and exposed for all to see in the last 36 months.

During this time we have seen giants fall (GM & Toyota), giants rebound (Ford), giants on hold (Chrysler-Fiat), emerging giants (Hyundai/Kia), giant new markets (China, India), and yes, a giant bowl of Not Good for assorted movers, shakers, and players who heretofore seemed incapable of screwing things up but somehow did, and in spectacular fashion too.

Since our issue date didn’t fall on April 1 last week (much to a few readers’ chagrin, I might add), I was going to do this week’s column - as a stealth April Fool’s “Rant” – on well, let’s see, my world-class collection of PEZ dispensers. Or how about the debut of our new website: lawnornamentextremist.com on June 1. Or my upcoming new book: In Praise of the Porsche Cayenne - Brilliance in a Box.

Ah well. Maybe next year

No, just when I think I’m free of the shackles of writing about the recurring themes that have dominated this business of late, they pull me back in. Thus, the One Thing I didn’t want to write about this week…

The hand-wringing was subsiding, the nightly hits on the national news were fading from view, the Internet frenzy had begun to wane, and the sales had not only rebounded (albeit because of its “Scorched Earth” incentive programs), but caught fire, and BOOM, here comes the Supreme Waffler (aka Transportation Secretary Ray LaHood), telling the public yesterday that, "We now have proof that Toyota failed to live up to its legal obligations. Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families." And not only that, but the Feds were seeking a $16.4 million fine – the maximum – for Toyota’s transgressions. Ouch, Baby. No, not for the fine - because let’s face it with a $35 billion plus war chest that amounts to a rounding error for Toyota – but for the “knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families" part. If nothing else this will give the ambulance chasing, ball-busting, sleaze bags (aka the marauding trial attorneys) looking for their next score and lining up for their cut from this debacle all the ammunition they need to extract huge settlements from sympathetic juries.

But that’s not all, because the touchy-feely minions (aka the typical Toyota customers who think the company can do no wrong) now have yet another sliver of doubt sticking in their craws, as in, “They didn’t really know, did they? I mean, they wouldn’t really do that, would they?”

And the answers to those queries are – at least according to the piranha attorneys - “Yeah, kinda” and “Uh-huh, absolutely.”

(Do I think cosmic rays may have caused intermittent electronic interference causing Toyota’s to careen out of control? It’s possible, but then again it’s possible I could be named Ed Whitacre’s replacement too. No, I firmly come down on the side of gross driver error being the cause of these incidents, especially given this nation’s overall level of incompetence behind the wheel.)

What have we learned about Toyota after all of this? That it’s a Japanese company that started out being in love with building cars and trucks with exceptional levels of consistent quality - and little else – that grew into an emerging global industrial juggernaut. But along with that unbridled success came a virulent strain of hubris that infected legions of new-wave executives who didn’t much care for the Toyoda legacy, but instead cared more about making their personal marks on the company and the business itself. And with that new breed of executive fueling its global ambitions to be the biggest, baddest car company in the world, Toyota became careless and supremely arrogant. And the mistakes cascaded from there.

The “Toyota Way” was jettisoned in favor of “Toyota Right Now” and the Japanese government – Japan Inc. – willingly went along by giving Toyota everything they needed in terms of jiggering their currency to extract the maximum profits from the markets they competed in, especially here in the U.S.

And the rest, as they say, is history. Except that in this case history is going to be played out for Toyota in courtrooms all across America for many, many years to come. Oh, and that hefty war chest? Let’s just say that Toyota will need a big chunk of it to weather the upcoming storms headed its way.

As I said weeks ago (and echoed by “Maximum Bob” Lutz in New York last week), Toyota is no longer on its own pedestal, safely ensconced above the mere mortal car companies that have to fight and claw and scramble for every scrap of business they can cling to.

No, Toyota is now the one thing it never wanted to be - just another car company - lost in the swirling maelstrom of chaos that has come to define the automobile business here in North America.

And that’s the High-Octane Truth for this week.

See another live episode of "Autoline After Hours" hosted by Autoline Detroit's John McElroy, with Peter De Lorenzo and friends this Thursday evening, at 7:00PM EDT at www.autolinedetroit.tv.

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