Toyota's Latest Recall: That Deafening Silence Is Not Good News for the Automaker

Last Updated May 3, 2010 6:30 AM EDT

It's good news-bad news -- OK, almost entirely bad news -- for Toyota (TM) that the latest Toyota recall is hardly news any more.

Toyota has had so many recalls that the latest one, for about 50,000 units of the 2003-model Toyota Sequoia SUV, seems small by comparison, and old news.

It got buried in the NYT, for instance, which said the latest Toyota recall brings to more than 9 million the number of vehicles Toyota has recalled since November 2009. The story didn't even make the front of the paper's business section.

When I worked at Mercedes-Benz USA, the brand was very publicly suffering some quality problems as measured in surveys from J.D. Power and Associates, which have since been fixed.

My colleagues back then complained bitterly about the bad press the brand got. I used to feel that it was a good thing people considered it newsworthy Mercedes-Benz could have a quality problem. That meant it was still contrary to what people expected of the brand. If I were Toyota, I'd get worried if people no longer care about its recalls.

Earlier this month Toyota agreed to pay a $16.4 million fine to the National Highway Traffic Safety Administration, which accused Toyota of purposely delaying reporting safety complaints about unintended acceleration that led to the much bigger recalls earlier.

The fact that NHTSA sought the fine got a lot more press when Transportation Secretary Ray LaHood first announced it earlier this month, with maximum fanfare. NHTSA had taken some heat from Congress for possibly taking it easy on Toyota in the past, but LaHood seemed to be making up for it now.

In a statement announcing the settlement, Toyota denied breaking the rules, but said it settled the fine, "in order to avoid a protracted dispute and possible litigation, as well as to allow us to move forward fully-focused on the steps to strengthen our quality assurance operations."

In between the fine and settlement, Toyota suffered yet another setback, when Consumer Reports labeled the Lexus GX sport-utility unsafe. Toyota responded by halting sales and recalling the GX, for issues related to whether its stability control system reduced skids as designed.

The Toyota Sequoia recall is also related to its stability control system, but it appears to be a separate issue from the one that led to the GM recall.

Toyota has gotten so many black eyes they're starting to run together. But so far, the brand has responded by pouring on the incentives, like zero-percent financing, and sales do not appear to have suffered.

But you have to wonder: what next?

Photo: Toyota