Toyota’s Massive Recall — Made in China?
Toyota’s recent recall of 4.2 million vehicles has been pretty dramatic, and the media has pitched this story as one that highlights quality problems outside of China. This recall is going to tarnish Japan’s image as a producer of quality products, they say. China is not alone, Japan is having its own quality control crisis!
The company responsible for sourcing the faulty accelerator pedals, CTS Corporation, is American, which suggests an American quality crisis, not one that is Japanese. It made me wonder anyway when the media was going to connect the dots by telling us whether CTS was sourcing the product overseas. I’ve been waiting for days for this information: Where were those accelerator pedals actually made?
My suspicion – not yet confirmed – is that the accelerator pedals were “Made in China.” One reason for guessing this is that the recall directly affected cars produced in China. It seems unlikely that the United States would make a part like this and ship it to China, a low-cost producer. It seems somewhat more likely that an auto assembly plant in China would want to source the component close to home (given the price advantage, and proximity) – and that if China were a place to source accelerator pedals, then these components were likely shipped to auto plants around the world.
And then there was the list of 200+ pedal accelerator suppliers that I found on Alibaba.com this morning. On its own, not a compelling piece of evidence, perhaps, but at least a suggestion that China does in fact produce such assemblies in great volumes. And here’s another detail: CTS Corporation’s largest manufacturing facility outside of the United States is located in China.
More than anything, what’s convinced me is the media spin. Too many in the press have taken the opportunity to jump on Japan’s case. And what really set off an alarm has been the way in which Chinese officials commended Toyota on a fine job of “handling the crisis.” Here’s a piece of advice you can put in your pocket: Anytime you see Chinese government officials praising the Japanese when they have the opportunity to slam them, be on guard.
China on Friday welcomed moves by Japanese auto giant Toyota and Ford of the United States to recall or suspend production of some cars due to safety risks…China itself has been criticized worldwide for a raft of product safety scandals in recent years involving dangerous foods, and toys with its manufacturing industry being blamed as poorly regulated and corrupted.
Don’t know why China is sweet on Japan when it tends to be tough, but here is a press release, available at CTS Corporation’s website, which points to the geographical source of the accelerator pedals:
CTS Corporation (NYSE: CTS) today announced that CTS Automotive Products has been awarded a $22 million production program for its Electronic Throttle Control (ETC) Accelerator Pedal Modules from a major Japanese vehicle manufacturer…CTS recently won the North American business for this same platform of this popular model and is working towards penetrating additional wins for this platform in Europe. The pedal modules will be manufactured in Zhongshan, China with the first deliveries starting in 2011. Revenues from this award are expected to reach approximately $22 million over the five-year life of the program.
Japan has built a strong reputation for quality that is well deserved, and it is unfair that the press has taken the position that the accelerator modules are a “Japanese problem.” We don’t know yet whether the faulty parts originated in China, but it seems likely.
Toyota is facing its fifth auto recall in China, and I now wonder how many of these cases are really a “boomerang effect” involving China-made parts. It raises an interesting question anyway: If Japanese companies are incapable of ensuring the quality of products they have made in China, then can anyone else be expected to do so?










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