Is Toyota On Fire, Literally?
Toyota (NYSE:TM) announced on October 10 that it will be recalling 2.5 million vehicles in the United States. According to the press release, the company is concerned about the application of a “special fluorine grease to the driver’s side Power Window Master Switch.” If incorrectly addressed, operation of the switch could lead to smoking or fire. The recall affects 2007-2009 RAV4, 2007-2009 Tundra, and the 2009 Corolla, among other models.
This recall is one of the largest on the books. Toyota made history in 2009 when it recalled 3.8 million vehicles after a high-speed crash involving one of its cars. This round could pull as many as 7.43 million units globally. Toyota suggests that it would take about one hour to repair the issue.
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Toyota’s isn’t the only major recall in recent weeks, though it’s certainly the largest. On October 9, Honda (NYSE:HMC) issued the recall of 268,000 model-year 2002-2006 CR-V vehicles in the U.S., also related to a power window master switch issue. According to the release, the concern is that if water leaks in to the door it could “cause electrical resistance in the switch” and “potentially cause a fire.”
General Motors (NYSE:GM) issued a much smaller recall of 40,859 vehicles at the beginning of the month. The company was concerned that plastic fuel pumps in the Chevrolet Cobalt and Pontiac G5 could crack, causing a fuel leak and possibly a fire. However, this comes at the heels of a 473,841 vehicle recall announced in September.
Not to be left out, Ford (NYSE:F) recently issued a triple volley of recalls, the latest pulling the brand new 2013 Ford Escape off the road. The concern is that a faulty cap plug in the engine could dislodge, causing coolant to leak and start a fire.
Beyond being a general nuisance for everyone involved, recalls are expensive. The public relations hit is largely incalculable. Even though every automaker issues recalls, the brand suffers every time. For Toyota’s 2009 recall, the Huffington Post reported analyst estimates of between $2 billion and $5.5 billion between repair costs and lost sales.
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