Economics

The Toyota Recall: Whose Pedal to the Metal?

800px-toyota_7_1970Last year, when President Obama was buying up car companies, he spoke of the need to preserve the American automobile industry. At the time, he clearly meant Ford, Chrysler, and General Motors. That was odd even then, given the substantial production of foreign-owned companies like Toyota and BMW in the United States and the worldwide manufacturing model that all these companies employ.

The attempt at a sharp distinction between American and foreign auto producers looks even stranger in light of Toyota’s recent accelerator-pedal disaster and recall. Toyota has gained market share for years at the expense of behemoths like GM. In large part, these gains built on a reputation for quality. At first blush, it would seem that recent episodes in which accelerator pedals have reportedly stuck in some Toyotas, killing or imperiling those within, would mark a major setback for Japanese producers and offer an opportunity for U.S. competitors.

But nothing is so simple in the globally interconnected world of auto production. It turns out that those dubious Japanese accelerator pedals were actually made by CTS Corp. of Elkhart, Indiana. The manufacturing takes place at a plant in Canada. The Toyotas that are thought to be immune from the problem are those with pedals made by the Japanese supplier Denso. In fact, it was a shortage of Denso pedals that compelled Toyota to halt vehicle production.

Could it be, though, that U.S. producers at least chose their suppliers more wisely? No such luck. Ford just announced that it was stopping production and sale of a commercial vehicle in China, because it uses pedals made by CTS.

Image by Chris 73.

Comments are closed.