This report presents the legal and ethical issues that one of the world’s largest automakers, Toyota, encountered due to uncontrolled car acceleration in several of their car models. These issues resulted in millions of recalls due to injuries and deaths. The case was an issue of whether the accidents were a result of sudden acceleration, bad drivers, or faulty floor mats. There were several legal issues involved in this case, including charges of negligence as well as possible charges of obstruction of justice because they knowingly hid these defects from U.S officials but did not attempt to correct these issues. By 2010, Toyota recalled 7.7 million vehicles, 5.4 million from floor mat replacements, and 2.3 million for gas-pedal re-assemblies (Jennings, 2012 Pg. 460). Toyota faced legal issues regarding design defects because of the dangers of use from errors in manufacturing. This is due to the fact that cars must be designed in view of the probability of accidents (Jennings, 2012 Pg. 337). A car which is designed in view of the probability of accidents would take into account the issues of gas pedals becoming stuck under the floor mat or other technical issues. Other legal questions that have arisen from this case are possible lost value suits, wrongful death suits, or even securities fraud claims by shareholders. Furthermore, Toyota faces ethical dilemmas that are centered on the decisions it made to hide safety issues from customers, delay a recall, and produce cars that were not safe to be driven. However, one of the issues that plaintiffs have encountered is that no two cases appear to be alike, making it difficult for the National Highway Safety Traffic Administration NHTSA to prove that the accidents were all caused by th...
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There was strong competition for Ford in the American small-car market from Volkswagen and several Japanese companies in the 1960’s. To fight the competition, Ford rushed its newest car the Pinto into production in much less time than is usually required to develop a car. The regular time to produce an automobile is 43 months but Ford took 25 months only (Satchi, L., 2005). Although Ford had access to a new design which would decrease the possibility of the Ford Pinto from exploding, the company chose not to implement the design, which would have cost $11 per car, even though it had done an analysis showing that the new design would result in 180 less deaths. The company defended itself on the grounds that it used the accepted risk-benefit analysis to determine if the monetary costs of making the change were greater than the societal benefit. Based on the numbers Ford used, the cost would have been $137 million versus the $49.5 million price tag put on the deaths, injuries, and car damages, and thus Ford felt justified not implementing the design change (Legget, C., 1999). This was a ground breaking decision because it failed to use the common standard of whether a harm was a result of an action on trespass or harm as a result of an action on the case (Ferguson, A., 2005).
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Different nations within which Toyota operates have different political, technological, social, and cultural environments. To safeguard the company’s overall image, there must be effective communication between the head office and regional quarters. This is especially important in the area of quality control, as Toyota currently grapples with safety issues facing several of its car models.
Throughout the course, I have discussed numerous aspects of Toyota Motors Corporation. This company is very successful within the automotive manufacturing industry, despite their numerous issues based on product recalls and unethical standards. Although these were serious setbacks, Toyota still remains the number one automaker in which they produced 10.08 million units in 2015 (Schmitt, 2016). In addition, the corporation has numerous strategies, practices, and policies that attributes to their success.
According to Steve Gorman of Thomson Reuters, the world’s largest international multimedia news agency, 40 consumers, and businesses filed legal claims against Toyota. The claims involved financial losses including diminished vehicle principles steaming from complaints of Toyota cars racing out of manage (Gorman, S. 2010). An international company memo cited that a reliable (brake override) option in 2007, three years prior to the safety feature made standard.
Between 2009 and 2011, the company recalled over 11 million vehicles in North America alone for numerous reasons to include acceleration malfunctions. In 2013, Toyota recalled 16 million vehicles worldwide for various issues. Anytime a recall is initiated, even if it is nothing major, many customers may go overboard within their thought process, and the quality and reputation can be severely tainted, which in turn will affect revenue.
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