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Unintended Acceleration: Toyota's Recall Crisis

Abstract

In late 2009 Toyota became the subject of media and U.S. government scrutiny after multiple deaths and injuries were attributed to accidents resulting from the unintended and uncontrolled acceleration of its cars. Despite Toyota's voluntary recall of 4.2 million vehicles for floor mats that could jam the accelerator pedal and a later recall to increase the space between the gas pedal and the floor, the company insisted there was no underlying defect and defended itself against media reports and regulatory statements that said otherwise. As the crisis escalated, Toyota was further criticized for its unwillingness to share information from its data recorders about possible problems with electronic throttle controls and sticky accelerator pedals, as well as braking problems with the Prius. By the time Toyota Motor Company president Akio Toyoda apologized in his testimony to the U.S. Congress, Toyota's stock price had declined, in just over a month, by 20 percent - a $35 billion loss of market value.

Type

Case

Author(s)

David Austen-Smith, Daniel Diermeier, Eitan Zemel

Date Published

Citations

Austen-Smith, David, Daniel Diermeier, and Eitan Zemel. Unintended Acceleration: Toyota's Recall Crisis. Case 5-311-504 (KEL598).

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