Toyota dealer faces suddenly rocky road

I’m about two-thirds of the way through “Crash Course: The American Automobile Industry’s Road from Glory to Disaster” by Paul Ingrassia of The Wall Street Journal, but I have to put it down for a while because it’s too depressing. “[A] devastating and compelling narrative of the ongoing hubris and miscalculation that felled one of our country’s corporate treasures,” wrote one reviewer. And that’s mild.

Compounding the perplexity of it all is the example set by Japanese automakers. As Detroit worked hard to snatch defeat from victory, Japan slowly and steadily created a dynasty by keeping its eye on the prize: building quality cars that people wanted.

Now it’s finally Japan’s turn in the hotseat. Toyota, which in 2007 pushed the great GM aside as the world’s biggest automaker, has suddenly been hit with a series of recalls that will cost billions to remedy. Worse than the financial cost, the company has acknowledged, is the damage to its reputation for quality.

The question, as Detroit has learned the hard way, is how a company reacts when things go wrong. Here’s what Toyota President Akio Toyoda had to say at his press conference: “We will do everything in our power to regain the confidence of our customers.”

Those are certainly the right words, but will actions speak as loudly? I asked Ted Lucki.

Lucki owns Riverhead Toyota, which since its start in 1994 has become the biggest dealership on the East End, selling some 2,000 cars a year. Frankly, I expected him to dodge the call. Lots of people in tough situations do. But Lucki called right back, and that set the tone.

How’s it going? Well, it’s kind of like an illness in the family. “I’m getting a lot of phone calls,” Lucki said. “A Polish customer dropped off a kielbasa. A priest came in to pray for me. I’m not kidding.”

That family theme kept repeating. “We like to promote from within,” Lucki said. Conversely, facing the onslaught of recalls, there have been demotions within: Two salesmen who started as mechanics have been returned to the shop. “They’re a little shocked, but they realize it makes sense,” Lucki said. “We’re a family. We do what’s got to be done when the family needs it.”

What’s got to be done now is a lot of recall work. Lucki said they’re fixing about 30 cars a day, and extending hours to make it possible. “We’re retraining, regrouping, reorganizing, restaffing,” he said. Toyota is helping by funding it all and providing the necessary parts promptly.

“The difficult part will be, from a business point of view, reinstalling confidence,” Lucki said. Realizing that nourishing positive PR would help, he’s giving owners of cars in for recall work coupons for a free lunch next door at Panera Bread. If both recalls are performed, at a total of 2.5 hours, “that’s a long time to wait,” Lucki said.

This isn’t the only speedbump ever encountered by Riverhead Toyota. “The economy affected us, no question about it,” Lucki said. “Business is way off,” down an estimated 30 percent from 2008 to 2009. On the upside there’s been more service, as more people fixed cars instead of buying new. “And the clunker thing actually helped move things along,” Lucki said. They sold about 150 cars through the federal program, and it was “manna from heaven.” Since then things have been slowly improving. “Now this,” he said.

Slow and steady is the road back, as Lucki sees it. Kind of like Toyota’s path when it was first trying to find its way into an American market completely dominated by Detroit. “Toyota’s into doing it right,” Lucki said. “They think before they act.”

He guesses that the company will pull out of this skid and find traction again before too long. “I could be wrong,” Lucki said. But it’s a pretty good bet he’s right.

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This is my last East End column for Long Island Business News. The company has decided to head into more straight news, which I’ve been asked to help supply. Thanks for your three-plus years of readership, and as always, if you have any news tips to share, please e-mail me at jdmiller49@yahoo.com.


Long Island Business News / February 17, 2010