Toyota Recall: The Most Damaging of Them All?

(Feb. 1) -- As Toyota begins repairing gas pedals on the millions of vehicles it has recalled, company executives are taking to the media to reassure customers.

"I drive Toyotas," President of Toyota Motor Sales U.S.A. James Lentz said on NBC's "Today" show Monday morning. "My family members drive Toyotas. My friends and neighbors drive Toyotas. I would not have them in products that I knew were not safe."

Since November, the company has recalled nearly 8 million vehicles after reports of sticky accelerators that led to crashes and a few fatalities. Last week, the company suspended production on eight models, including the popular Camry and Corolla sedans that respectively topped U.S. car sales last year.

"The halt to sales is forcing Toyota to suspend production at five plants, idling more than 20,000 workers and leaving 1,200 Toyota dealers sitting with roughly 250,000 unsold -- and for now, unsellable -- vehicles worth nearly $50 billion," reports Time magazine. The larger question is how soon, or if, the company will recover.

"It's a devastating blow to Toyota and Toyota's reputation," Dennis Virag, president of the Automotive Consulting Group, told Reuters. "Toyota is the new General Motors in terms of experiencing quality glitches, over-expansion and the proliferation of new product models."

Despite the scale of Toyota's woes, its recall is not the largest in automotive history, and other companies that have suffered similar stumbles have recovered. The top five car recalls of all time -- all involving American companies, and not including Toyota's latest, which would rank third on the list -- look like this:

1. Ford. In 2009, Ford completed a series of recalls spanning 10 years and affecting 14 million vehicles, including Lincoln and Mercury SUVs, pickups, vans and cars released from 1993 to 2004. The problem was a cruise-control switch that had a tendency to catch fire -- even when the vehicle was turned off.

2. Ford. In 1996, Ford had another fire-related problem. Hundreds of customers complained of conflagrations stemming from faulty ignition systems, which led to a recall of 8.6 vehicles, including Escorts, Mustangs, Tempos, Thunderbirds, Cougars, Crown Vics, Grand Marquis cars, Lincoln Town Cars, Aerostars, Broncos and F-series trucks.

3. General Motors. In 1971, GM recalled 6.7 million vehicles after reports, aired by consumer advocate Ralph Nader, that "[s]cores of engines on Chevies made from 1965 to 1969 ... were twisting loose from car frames, sometimes with the frightening result that the auto's accelerator pedal was pulled all the way down to the floor and the brakes failed."

4. GM. In 1981, GM recalled 5.8 million vehicles after reports about suspension bolts in certain models coming loose and leading to steering malfunctions. Among the affected models were the Buick Regal and Century; Chevrolet El Camino, Monte Carlo and Malibu; Oldsmobile Cutlass; GMC Caballero; and the Pontiac LeMans and Grand Prix.

5. Ford. In 1971, Ford recalled 4.1 million 1970 and 1971 models of several vehicles in which seat-belt shoulder harnesses were found to fray and detach from the metal binding them to the frame.

The lesson: Recalls, even large ones, are not uncommon in the auto industry. Still, they can be particularly troublesome for a company like Toyota, which built market share by touting its cars' high safety standards. With the recalls and suspension, that image has now taken a hit.

"Quality was their differentiator, and now it's their Achilles' heel," says public relations expert Brenda Wrigley. Another expert, auto industry strategic adviser Maryann Keller, was more dire in her assessment. Toyota's "reputation for long-term quality is finished," she says. "People aren't going to buy Toyotas, period. It doesn't matter which model. What's happened is sufficient to keep people out of the stores."

Most experts expect the company to survive. But meanwhile, Toyota's rivals -- foreign companies including Hyundai, Honda and Nissan, as well as U.S. automakers like GM and Ford -- are smacking their lips. "I think you're going to see a lot of sales and marketing by Toyota's competitors in the very near term to remind the world that they're still in business and they've got great products with great quality," says industry observer Bill Pochiluk.