Wednesday, February 10, 2010

Toyota's Phase Two: Here Come the Lawyers

Stand back, everyone: the floodgates have opened, and the stampede of lawyers to the trough of Toyota’s misfortune has only just begun.

Surely, Toyota knew it was coming: the inevitable explosion of lawsuits in America over the accelerator and brake pedals in its most popular models. As the press finds less and less in the story to breathlessly stoke the public’s frenzy, now our valiant plaintiff lawyers are taking up the slack and positioning themselves like sharks smelling blood.

At least 30 class-action lawsuits have already been filed in the United States against Toyota, ranging from allegations of deceit to fraud by Toyota in how they handled information and whether their actions – or lack of them – voided consumer warranties.

And while consumers will likely cash in whether Toyota decides to fight all of these lawsuits or settle out of court, who really wins when all is said and done? Not the owners of Toyotas who may or may not have experienced any problems with their cars. Not the families of the 19 people who died allegedly as a cause of Toyota’s problems. Certainly not the American public, whose legal system will be choked and clogged with these claims for years to come.

It will be the lawyers who, like lions after sleeping off the wonderful meal provided in their kill of big tobacco, are prowling the countryside again, looking for their next prey, fattened and vulnerable as a wounded zebra out in the open, alone on the Serengeti.

Is Toyota Dazed or Duplicitous?

True, Toyota appears to have little with which to defend itself. In the grand scheme of things, 19 deaths among millions of vehicles sold is a paltry ratio in any actuaries’ book. But as the press chomped down on this story and refused to let go, company executives should have mobilized Plan B. If they had withheld safety information from the public, they could have ‘fessed up immediately and born the brunt of an angry but easily-forgetful American market. The story would have rocketed skyward, and then fizzled as people realized it was just the Ford Pinto all over again.

Don’t you know that’s a moment in time Toyota would desperately love to have back! Even if the hysteria over the pedals caught Toyota purely by surprise, their marketing and public relations people could have marched the press through factories and engineering laboratories, showing how feverishly employees were scrambling to find a fix. They could have paraded company executives through all of America’s talk shows to provide some semblance of corporate contrition and anxiety over the situation. Mr. Toyoda himself should have flown to Washington to meet with cabinet officials and take their ceremonial whipping of him like a man. American consumers like to see all of this posturing and gamesmanship, even if it is all a charade.

Yet, to Toyota’s increasingly apparent shame, it didn’t do any of it. In what will undoubtedly become textbook fodder for how to completely bungle an international business crisis, Toyota shut its corporate mouth, and shut its own dealer network out in the cold. Dealers – who apparently were getting as much information as the American public – unwittingly became the front line as consumers vented their angst and confusion over what they saw in the press. Eventually, Toyota decided to grant a $75,000 reimbursement to each dealer for the expenses they were incurring trying to keep customers from storming the battlements. But by then, the damage had already been done, and the company’s reputation lay in shambles.

Is this how they normally do business in Japan, or does Toyota really have something to hide?

Oh, the Drama

Last week, I wrote about how Toyota seemed to be a victim of an overzealous press that was looking to throw anything anti-Toyota against a wall to see what stuck. I continue to stand by my assertion that the actual accelerator issue has been woefully over-dramatized to represent something far more pervasive and deadly than is actually the case. Of course, I say this without ever having taken a mechanical engineering class in my life.

But as I pointed out last week: how may Toyotas do you see smashing through fences and crashing into Burger King’s? Millions of Americans drive their afflicted Toyotas to work and back every day without incident. A friend of mine owns two Camry’s – one the previous body style, another the current body style – and his only complaint is that the brake pedal in his newer car has a different feel to it, but he’s learned to accommodate for it, like he would driving any other car.

Ambulance-chasing lawyers are nothing new in America. Where there’s smoke, there’s probably a lawyer telling a cigarette addict they’re not to blame for their own actions. And now with Toyota, the chance to bleed dry one of the world’s most successful corporations – with a reported $24 billion available in cash reserves – provides too great a temptation for these hardy, ethics-challenged opportunists to let pass by.

Talk About Entitlements

Nobody with any sense of fair play would deny families of the 19 fatality victims their chance for redress in the courts. If Toyota knew their accelerators and brakes possessed faulty designs or computer software and put them on the market anyway, then authorities in nations where these cars were sold have the right to prosecute. In addition, anybody injured in wrecks caused by these problems should be able to at least get their medical care and other expenses covered, with reasonable restitution for pain and suffering. Perhaps even insurance companies should pursue Toyota for repayment of claims they processed assuming conventional accidents were the cause.

However, should people who haven’t experienced any dangerous problems with their Toyotas – the overwhelming majority of consumers in this case – be entitled to badger Toyota for money simply because the manufacturer made some mistakes, or maybe even broke the law? What right does every Toyota owner have to make a claim just because the press scared them out of their wits? What has happened to the American mentality to assume we should profit from somebody else’s mistake even if we haven’t personally suffered from it? Does Toyota owe every one of its customers a huge sum of money for something that hasn’t actually injured them?

What if Toyota is right, and this whole fiasco was unforeseen and that it caught them completely by surprise – no hidden data, no malicious intent? How much allowance should be made for new technology that may or may not have needed extra testing? If every Toyota customer should indeed be compensated in some way, would a year’s worth of free oil changes be too much to expect from Toyota, or not enough?

You Mean We're Talking About Greed - Again?

From where I stand, it looks like people whose only involvement in Toyota’s recent recalls has been to take their car in for the prescribed servicing now expect some sort of windfall for the inconvenience. They say lawsuits are made for times like these, when the big, bad corporation should be held accountable for selling bad products.

Yes, our legal system does allow for punitive damages when consumers have been wronged. And advocates for plaintiff lawyers have a point when they say big penalties help inhibit corporations from running amok with dangerous products and imperious anti-consumer business models.

The thing is, we've got this nifty system called capitalism that comes with built-in safeguards that should be allowed to work. Companies that sell junk don't normally stay in business as long as Toyota has.

What’s wrong with waiting to see where the fault lies with Toyota’s pedals, and then assessing how and where to parse out blame – if indeed, any blame can be assigned. Blame indicates somebody was negligent, but no court has established any negligence yet, have they?

So go back in your dens, you shyster lawyer types, and don’t come out until we’ve got some hard evidence for you to gnaw on.

And you Toyota owners who want to join a class action lawsuit, don’t feed the animals – at least, not yet.

You never know what might bite you back.

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