Accelerator Recall Missteps Threaten Toyota's Recovery

Before being rescued by this summer's Cash For Clunkers program, Toyota was having a terrible 2009, with losses -- the brand's first since 1950 -- up to nearly $5 billion. The US government-backed trade-in program allowed Toyota to claim an actual profit, $241 million between July and September, after three consecutive quarterly losses.

But Toyota's tentative recovery during a brutal year for the entire industry could be threatened by their insufficient response to an accelerator problem that has reportedly caused 12 deaths, and has finally forced the brand to recall four million vehicles.

The Toyota site shows no evidence of the massive recall, other than a small, lower left "News Alert," featuring dull black text on a gray background: "Important Information on Floor Mat Campaign."

"Floor mat campaign" is a bit of wishful nostalgia from Toyota. The "floor mat" campaign was actually the pre-recall, "just throw out the floor mats" solution Toyota offered initially. Now Toyota will fully recall and shave the autos' accelerator pedals, and in some cases make even greater modifications.

These repairs will hurt Toyota's bottom line, but not as much as the punishment to the automaker's heretofore impeccable brand, steeped in safety. With Ford Pinto/Explorer-like mechanical problems endangering drivers and even killing a few, with the brand initially trying to underplay the dangers, Toyota is running dangerously close to looking like it's from Detroit. Old Detroit.

Another downside is that there isn't even much of a "opportunity in crisis" branding angle here for Toyota. It can promise "it won't happen again," but...

The brand is currently running ads boasting "80 percent of Toyota's sold are still on the road today." But even if that percentage holds, in several years that 80% may represent a much lower number.