HOUSTON -- A Houston business professor suggests Toyota’s recovery from its current trials and tribulations might best be guided by the playbook written by Johnson and Johnson.
In 1982, several people died from bottles of Tylenol sabotaged with cyanide. Johnson and Johnson’s market share dropped from 37 percent to as little as percent. The company pulled its product from store shelves, created tamper-resistant packaging, gave deep discounts and eventually restored consumer confidence.
"The people started associating Tylenol with safety rather than risk. Something like that would have to happen I think,” said Dr. Partha Krishnamurthy of the University of Houston’s Bauer College of Business.
Kelly Blue Book reported Tuesday that it estimates a 5 percent drop in value for Toyota models. Toyota reported as much as a 20 percent drop in sales for the month of January.
"Either they are going to use this spotlight to become a vastly better company, in terms of how the consumers perceive them, or an also ran, which is not what Toyota was before," Krishnamurthy said.
The spotlight grew more intense on Tuesday when Toyota announced a recall of 437,000 Prius and Lexus hybrids because of a potential braking problem. The company says the fix involves a software upgrade for the 2010 Prius and the 2010 Lexus HS 250h.
Toyota also announced plans to recall more than 7,300 2010 Camrys for a brake defect that could lead to a brake fluid leak. Toyota says that on certain early production 2010 model Camrys with four-cylinder engines that a power steering pressure hose may be the incorrect length.
“If this condition exists, a crimp on the power steering pressure hose may come in contact with the No. 7 front brake tube,” Toyota said on its Web site.
Toyota said the condition might create a hole in the brake tube, a brake fluid leak, and lead to a “greater vehicle stopping distance.”
Meanwhile, Houston-area dealerships like Sterling McCall Toyota, along the southwest freeway, are already hard at work making repairs for Toyota’s first major recall. The service department is spending an estimated 80 percent of its service hours, hours extended until 10 p.m. on weeknights, fixing gas pedals.
CTS brand pedals are being upgraded with a metal shim to increase their return motion after a driver presses down on the accelerator. And both CTS and Denso brand pedals in Camry are being shortened by as much as ¾’s of an inch to guard against coming in contact with floor mats.
