Toyota Accidents Caused by Drivers: No Surprise
Toyota claims accidents caused by sudden acceleration of their vehicles were caused by the drivers themselves. (Remember the whole media brouhaha a few months back?) Surprised? I'm not.
I wrote about this in a post about stock valuation back when the story broke. One of the analysts used by my firm broke down the facts. He demonstrated why 1) If you owned a Toyota, there was no reason to worry about driving it. At least you didn't have to worry about sudden acceleration. 2) The statistics cited in the media stories were not meaningful or relevant. (You can read I wrote then here.) As for the accidents reported where people claimed their cars suddenly accelerated on their own - well, that's what Toyota's talking about now. They're saying that evidence shows the drivers were at fault in all cases where the cars were inspected after the accident. The drivers apparently were pressing on the accelerator.
But what Toyota's saying now still seems strange. After all, they went through the trouble of recalling millions of cars and spending tens of millions on "fixing" the problem. But if the drivers and not the cars were the cause of the accidents, what problem did Toyota fix?
I guess it's possible there was a real problem, and Toyota just decided that, whether the drivers' claims were true or not, they'd just take care of the problem. Of course, that's not what they said at the time. They responded in a defensive manner.
In fact, the company apologized - including the CEO of the company - and spent more millions on an ad campaign designed to win back the trust of their loyal customers. It sure sounded like they were admitting they had a problem - almost that they were at fault for the accident claims, didn't it?
So did Toyota really believe they had a problem? Or did they just figure it wasn't worth fighting the media and the government, who obviously had it out for them.
Remember that when the government decides they're going after you, whether you're really at fault or not, you've got a big problem. And an expensive one. Maybe Toyota management just wanted to spend whatever they spent on the recalls, after calculating that would be cheaper than fighting the government (especially with all the media after them).
Interestingly the current administration now faces criticism from it's political opponents as well as some of its own high-profile, well-heeled supporters of taking an anti-business position - a position that won't help the current economic recovery, and may even hinder it. Was the Toyota brouhaha part of that anti-business position?
Well, it's all speculation at this point. But it still seems odd, doesn't it? None of this really adds up.
It's a good example of why, when you invest in a company's stock, no matter how well managed you believe the company to be, not matter how good their balance sheet looks, not matter how strong their cash flow seems, a bolt out of the blue can take your stock down in a heartbeat.
Toyota's stock dropped over 10% when the story first broke. Then it slowly recovered. Now it's even lower. But that's probably a function of the problems the stock market's been having the last few weeks.
By the way, I drive a Toyota and never had any acceleration problems, although I once had a car that actually did accelerate on its own - an extraordinary and frightening experience if I ever had one! Fortunately I wasn't injured. The car, by the way, wasn't a Toyota. In fact, after I sold that car I bought a Toyota.
I wrote about this in a post about stock valuation back when the story broke. One of the analysts used by my firm broke down the facts. He demonstrated why 1) If you owned a Toyota, there was no reason to worry about driving it. At least you didn't have to worry about sudden acceleration. 2) The statistics cited in the media stories were not meaningful or relevant. (You can read I wrote then here.) As for the accidents reported where people claimed their cars suddenly accelerated on their own - well, that's what Toyota's talking about now. They're saying that evidence shows the drivers were at fault in all cases where the cars were inspected after the accident. The drivers apparently were pressing on the accelerator.
But what Toyota's saying now still seems strange. After all, they went through the trouble of recalling millions of cars and spending tens of millions on "fixing" the problem. But if the drivers and not the cars were the cause of the accidents, what problem did Toyota fix?
I guess it's possible there was a real problem, and Toyota just decided that, whether the drivers' claims were true or not, they'd just take care of the problem. Of course, that's not what they said at the time. They responded in a defensive manner.
In fact, the company apologized - including the CEO of the company - and spent more millions on an ad campaign designed to win back the trust of their loyal customers. It sure sounded like they were admitting they had a problem - almost that they were at fault for the accident claims, didn't it?
So did Toyota really believe they had a problem? Or did they just figure it wasn't worth fighting the media and the government, who obviously had it out for them.
Remember that when the government decides they're going after you, whether you're really at fault or not, you've got a big problem. And an expensive one. Maybe Toyota management just wanted to spend whatever they spent on the recalls, after calculating that would be cheaper than fighting the government (especially with all the media after them).
Interestingly the current administration now faces criticism from it's political opponents as well as some of its own high-profile, well-heeled supporters of taking an anti-business position - a position that won't help the current economic recovery, and may even hinder it. Was the Toyota brouhaha part of that anti-business position?
Well, it's all speculation at this point. But it still seems odd, doesn't it? None of this really adds up.
It's a good example of why, when you invest in a company's stock, no matter how well managed you believe the company to be, not matter how good their balance sheet looks, not matter how strong their cash flow seems, a bolt out of the blue can take your stock down in a heartbeat.
Toyota's stock dropped over 10% when the story first broke. Then it slowly recovered. Now it's even lower. But that's probably a function of the problems the stock market's been having the last few weeks.
By the way, I drive a Toyota and never had any acceleration problems, although I once had a car that actually did accelerate on its own - an extraordinary and frightening experience if I ever had one! Fortunately I wasn't injured. The car, by the way, wasn't a Toyota. In fact, after I sold that car I bought a Toyota.
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