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Skip Montreux and Dez Morgan examine the details of the recent Toyota recall.
Skip: This is Skip Montreux in Tokyo, Japan.
Dez: And this is Dez still in Leeds, UK.
Skip: Welcome to another episode Down to Business English.
Skip: Good to hear from you Dez. How are things going for you over there in Leeds?
Dez: Not bad, finally welcoming the start of Spring. At least I think it’s the start of Spring.
Skip: Well, here in Tokyo the Cherry blossoms are just starting to bloom. This is one of my favorite times of year.
Dez: I remember that. Spring is a big deal in Japan. I wonder if the Cherry blossoms will be beautiful in Toyota City this year?
Skip: I’m sure they will be, but I don’t know if the people are going to be in much of a mood to celebrate with everything going on over at Toyota Corporation recently.
Dez: That has been a big story that has many sides to it.
Skip: Yes, Toyota is the ultimate symbol of Japanese manufacturing and many people are wondering what has gone wrong and more importantly, what will happen next.
Dez: And I bet that in this troubled market, top executives of other car companies are planning how to turn this to their advantage.
Skip: As they should be. So this is our story for today’s episode; The Toyota Recall: What, Why, Who, and How much is it all going to cost?
Dez: So let’s get D2B down to business with the worlds largest auto maker and why it’s in so much hot water.
Akio Toyoda: At times we do find defects, but in such situations we always stop, strive to understand the problem, and make changes to improve farther. In the name of the company its long standing tradition and pride we never run away from our problems or pretend we don’t notice them.
Skip: That was Akio Toyoda grandson of the founder of Toyota corporation and current CEO of the company testifying in front of the United States Congress last month about the problems the company has been having recently.
Dez: I must admit that this is a story that I have missed the details of. I know that there have been some problems with the accelerator pedals and the brakes of some models but maybe you can fill us in on what actually happened.
Skip: Sure Dez. In a nutshell, In September of last year, Toyota announced they would recall 3.8 million vehicles in the US due to several issues.
Dez: Really why did they feel that was necessary?
Skip: For quite some time customers had been reporting problems with the floor mats coming loose under the accelerator pedal causing it to get stuck.
Dez: Really?
Skip: Yes, but then again in January of this year Toyota expanded the recall to include another 5.6 million cars and trucks. This time it was due to electrical issues causing sudden acceleration.
Dez: So that’s almost 10 million cars in total.
Skip: No that’s not all. In February, just last month the motor company was forced to recall 437,000 Prius’, their famous hybrid model. This time the recall was sparked by failing brake systems. That’s 3 major recalls in a very short period of time, which is unprecedented.
Dez: This is of course surprising news. But even more so when the company in question is Toyota, that has always had such a good reputation for quality. So what’s changed at Toyota?
Skip: That is a excellent question Dez and it has been keeping a lot of industry insiders busy trying to find an answer. First of all, recalls like this are not unusual. If you do a little checking into any major car company from the United States or Asia, you will see that recalls are quite common. The reason this recall is attracting so much attention is because of the way Toyota leaders mismanaged the situation.
Dez: How did they mismanage the situation then?
Skip: I think their biggest mistake, at the beginning at least, was to ignore the problem. As customer complaints started to come in, Toyota managers resisted admitting there was a widespread problem. Then the media picked up on the story.
Dez: Yes I read that Akio Toyoda gave a press release on February 5th
Skip: Yes he did, but that was only after the press tried to question him while he was away on holiday in Switzerland. There is now famous footage of Mr. Toyoda being confronted by reporters. He was looking quite puzzled, not answering questions, and then getting into a Audi and driving away. That image did not sit well with the public.
Dez: And then all this culminated with Mr. Toyoda being grilled before congress for three and a half hours.
Skip: And if that wasn’t bad enough, it now seems that every other day in the US, there is another report of a runaway Toyota on the highways of America. When this all settles down, this is going to be a very expensive lesson in how not to deal with production problems.
Dez: It will be very difficult to calculate the true cost of the recalls as the biggest price that Toyota is paying is the tarnishing of its once impeccable image.
Skip: Indeed. After overtaking General Motors as the world’s largest automotive manufacturer in 2007 Toyota was seen as a symbol of Japanese manufacturing superiority. However, perhaps they started putting growth ahead of quality.
Dez: That is what Akio Toyoda feared in his recent speech although he didn’t really say how Toyota intends to address these quality issues going forward.
Skip: So if we were industry experts and were trying to calculate what this entire fiasco is going to cost Toyota we would have to add the monetary cost of the physical recalls to the intangible figure of brand image and customer allegiance.
Dez: So that means that a lot of potential Toyota customers have been and will be tempted towards choosing another brand. So who do you think will benefit and pick up these customers.
Skip: In the United States the most obvious answer would be the big 3 auto makers:GM, Chrysler, and Ford.
Dez: Interestingly enough the Korean makers Hyundai and Kia saw their sales improve greatly, with Hyundai up 40% in December, although they are still minor players in the US market. How is this story playing out in Japan?
Skip: Well, the general sentiment here is that Toyota is more a victim of media hype than a victim of poor quality control. In fact, many people find it highly suspicious that the US congress has made such an issue out of this while at the same time being the majority shareholder of General Motors.
Dez: Interesting. Are those the same people that believe the US never went to the moon and JFK was killed by the Mafia, Skip?
Skip: I don’t think so Dez. Look, even last month, after all the negative attention, the Prius was still the best selling car in Japan. And Dez, please don’t be so naive. Everyone knows that JFK was killed by the
Mafia AND the CIA.
Dez: Well luckily that is a topic for another day.
Skip: Perhaps you are right. Shall we take a closer look at some of the words and phrases we used today.
Dez: Yes, let’s do that. Let’s get D2V, down to vocabulary.
Skip: Today we are going to take a look at 8 different words and phrases that were used in our conversation. I should mention that we are not going to spell the words as we have in the past. Please take a look at you iPod or iPhone screen to check the spellings.
Dez: You can also download the PDF for reference. So Skip, are you going to start things off?
Skip: Yes I will. First off is the word testify. Testify is a very official word and it’s used in the context of legal procedures. Basically it means to tell the truth in front of an official body such as a judge or jury, or in the case of Akio Toyoda, the United States congress.
Dez: Let me give you an example of testify. Interestingly the ex-Prime Minister of the UK, Tony Blair, and the current Prime Minister, Gordon Brown, both had to testify recently in the investigation into the Iraq war and what caused it.
Skip: I heard about that. That is another interesting story we should cover in the future.
Dez: My first word is accelerator which is the noun of the verb to accelerate. In the story we talk about the accelerator pedal which is often called the gas pedal in the US and is the one that you press to accelerate or go faster.
Skip: And you don’t have to use this word only when you are speaking about a car. You can use it to communicate any situation that is increasing in speed. For example, when you go for a 5 km run, your heart accelerates to about 100 beats per minute.
Dez: If I ever went running I am sure that my heart rate would accelerate to way more than 100 beats per minute. What is our next word?
Skip: Our next word is the adjective unprecedented. This is another very useful business word. It is used to describe an event that has never happened before.
Dez: The recent financial crisis, that is still ongoing, has caused most governments to take on unprecedented amounts of debt. Which means that they are more in debt now than they have ever been.
Skip: Great example. I don’t even want to think about that. Let’s keep moving on.
Dez: Next I have a short phrase for you; industry insiders, which as you can probably gather by unpacking the phrase, are people who work in an industry so are inside it. What is important about industry insiders is that they are knowledgeable about their own industry because they work in it.
Skip: In the days before Apple’s launch of the iPad, thousands of tech industry insiders were busy writing newspaper columns and appearing on TV talking about what they thought the new device would be.
Dez: Yes, I remember that.
Skip: Okay let’s go on. Another good word from the show today is the word culminate. The verb to culminate simply describes the end point of a sequence of events. That end point can be either positive or negative.
Dez: As an example I had an awful day at work last week. I dropped a cup of coffee on my shirt. My computer kept freezing.
Skip: Oh no.
Dez: I forgot to make an important call. And it all culminated with a meeting that went on way longer than I expected, so I didn’t get home till late.
Skip: That sounds like a bad day indeed. Do you have another word for us Dez?
Dez: Yes I do. In the story we talked about Toyota’s reputation becoming tarnished. The original meaning of tarnish is when the appearance of something becomes damaged in some way. It’s difficult to explain without an example.
Skip: Okay, well here’s an example. When I bought my laptop last year it was very shiny and new. Now, after 8 months of heavy use it is very scratched and tarnished.
Dez: Yes but you do carry it around with you everyday.
Skip: That’s right. But even though it is looking old and tarnished it still works fairly well.
Dez: As an extension of the original meaning tarnished can also be used to describe abstract nouns such as feelings or emotions.
Skip: An example of this would be how the image of the US was tarnished around the world as a result of 8 years of President George W. Bush.
Dez: A topic that we could no doubt talk about for hours but I think it’s time for our next word.
Skip: Yes, and that word is impeccable. Maybe this is a new word for people but it is very easy to understand. Impeccable is an adjective that describes something very, very, very, perfect. Something with no flaws or defects.
Dez: As with tarnish it can be used with abstract ideas as well as concrete objects. An example would be when batting Hideki Matsui has impeccable timing which enables him to hit the ball so far.
Skip: Nice example Dez. Okay what is your last word today?
Dez: My final word is fiasco. A fiasco is when something culminates in a complete and usually highly public failure. I am sure you can think of an example of fiasco, Skip.
Skip: I think I can. Well, a classic example of a business fiasco was in the mid 1980s when Coca Cola changed the taste of their product. Do you remember that?
Dez: I do, yeah.
Skip: I remember people were so upset about the change, Coca Cola had to reintroduce the original beverage a few weeks later. And that is what we now know as Coca Cola Classic. Wow, that was a fiasco.
Dez: I think you could say that the new coke didn’t sit well with the public.
Skip: And that is out bonus phrase for today is to not sit well which means to be uncomfortable or unhappy with something.
Dez: That does it for the vocabulary section and we encourage you to go back and listen again if you need to.
Skip: That brings us to the end of another show.
Dez: Thank you Skip and thanks to all of our listeners. Don’t forget to download the tapescript from our website which is downtobusinessenglish.com.
Skip: If you enjoyed today’s topic and you are finding this podcast useful, we would love to hear from you. We would also sincerely appreciate it if you could tell your colleagues and friends about where they can find Down to Business English. You can send them to our website www. downtobusinessenglish.com. or tell them to search for us in the iTunes store.
Dez: Thank you very much for listening.
Skip: Yes thank you everyone, and thank you Dez.
Dez: Bye for now and hope to see you next time.
Skip: Goodbye everyone. Drive safely. See you next time.
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