In our discussion of the cost of quality (COQ), we note the external costs that occur after delivery of defective products (such as rework, liabilities, lost goodwill, etc.). Philip Crosby, author of Quality is Free , wrote that the cost of poor quality is understated and "there is absolutely no reason for having errors or defects in any product or service." This New York Times article detailing Toyota's recently announced recall of 7.4 million vehicles worldwide (including 2.5 million in the U.S.), to repair power-window switches that can break down and start a fire, certainly brings Crosby's ideas to the forefront.

In our discussion of the cost of quality (COQ), we note the external costs that occur after delivery of defective products (such as rework, liabilities, lost goodwill, etc.). Philip Crosby, author of Quality is Free , wrote that the cost of poor quality is understated and "there is absolutely no reason for having errors or defects in any product or service." This New York Times article detailing Toyota's recently announced recall of 7.4 million vehicles worldwide (including 2.5 million in the U.S.), to repair power-window switches that can break down and start a fire, certainly brings Crosby's ideas to the forefront.
It was only 2-3 years ago that the company recalled more than 11 million cars to replace floor mats and sticky accelerator pedals. It has been seeking to reassure consumers about the quality of its vehicles since then. The recall could surely set back its efforts.
The vehicles affected in the U.S. include more than a million Camrys. Eight months ago, the National Highway Traffic Safety Administration opened an investigation into reports of smoke and fire coming from doors. During its investigation, the safety agency collected reports of 161 fires and of 9 injuries. In its news release, Toyota said there were "no crashes related to the recall," but did not mention fires or injuries. Toyota said it originally wanted to conduct a "customer satisfaction campaign" but decided to pursue the recall after discussions with the agency. Toyota described the recall as voluntary, but under federal regulations once a manufacturer learns of a safety problem it must, within 5 business days, tell the safety agency of its plan for a recall or face a civil fine.
These are the affected vehicles identified by Toyota:
bullet 2007-8 Yaris (covers about 110,300 vehicles)
bullet 2007-9 RAV4 (covers about 336,400 vehicles)
bullet 2007-9 Tundra (about 337,100 vehicles)
bullet 2007-9 Camry (about 938,100 vehicles)
bullet 2007-9 Camry Hybrid (about 116,800 vehicles)
bullet 2008-9 Scion xD (about 34,400 vehicles)
bullet 2008-9 Scion xB (about 77,500 vehicles )
bullet 2008-9 Sequoia (about 38,500 vehicles)
bullet 2008 Highlander (covers about 135,400 vehicles)
bullet 2008 Highlander Hybrid (covers about 23,200 vehicles)
bullet 2009 Corolla (about 270,900 vehicles)
bullet 2009 Matrix (about 53,800 vehicles)
Critical Thinking Questions:
1. Philip Crosby believed that
A.
quality does not have a price tag too large to pay.
B.
every product and service will have a small number of defects.
C.
quality is the responsibility of assembly line workers.
D.
the cost of poor quality is underestimated by most firms.
Your answer is correct.
2. Toyota's quality problems
A.
will harm its reputation for years.
Your answer is correct.
B.
did not exist prior to 2009.
C.
were usually the fault of auto assembly workers.
D.
were mostly from subcompacts they manufactured.
3. A plurality of quality issues at Toyota arose from
A.
the SUV models.
B.
the U.S. government actively searching for defects.
C.
the Camry.
Your answer is correct.
D.
fires caused by drivers.
4. Toyota's reputation as a manufacturer of reliable autos
A.
has improved since Crosby's ideas have been implemented.
B.
is above reproach.
C.
will require new management openness to quality issues.
Your answer is correct.
D.
will recover in a year or two if the U.S. stops its NHTSA investigations.