Sunday, November 16, 2014

Toyota: Class Action Lawsuit (2009-2014)

Toyota Corp. logo
The case of Toyota's class action lawsuit placing blame takes place starting in 2009, and ending recently in 2014. Toyota is a major motor corporation, Headquartered in Japan, and is currently recognized as the 14th best brand in the world. Toyota's mission statement claims that "Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people”. Recently, however, as it is probably fresh in the minds of many, Toyota has fallen under scrutiny from both the NHTSA as well as consumers. Faced with a massive 9 million vehicle recall spanning from 2009-11 over faulty accelerator pedals, among other things, the employer of over 300,000, with 20,000 of those working in the United States, Toyota struggled to maintain a positive image with consumers, and some legal tactics in the handling of the class action lawsuit and subsequent settlement raised even more concern with the ethical state of being within the company.

When Toyota was defending themselves from the 200 plus lawsuits that were filed over the many deaths and countless injuries from the faulty equipment, they used a stance that focused not on the defective pieces, but instead the legal team worked to squarely place blame for the accidents on the drivers of the car. This stance was met with heavy opposition, unsurprisingly, because it was proven that the vehicles had defective hardware, and the pain and suffering already felt by those who lost loved ones was worsened with these false accusations. Once the case was settled in 2013, for a sum of over 1.6 billion paid out to those affected, those who received the money assumed that they were done being harassed by the Toyota legal team. In the settlement however, there was a provision for $100 million in "unclaimed funds", that didn't go to any specific party. Toyota intended this $100 million, or 6% of the settlement, to go towards "driver re-education programs". Toyota again stood behind there defense of its not me, its you, and blamed the injured or dead drivers of the vehicles that were equipped with defective equipment. This eventually was caught by mainstream media, exposing what Toyota had done to their loyal customers.

Accelerator trapped by unsecured floor mat in Toyota vehicles
The stakeholders, or the persons who are key to the business and its actions, are multi-fold. The first and foremost include the customers of Toyota, specifically those who owned or previously owned a vehicle equipped with the faulty equipment. These are the people most affected by the actions of Toyota, and its stance on the settlement they received. Next in line are the executives of Toyota, the ones who are making the decisions in the legal defense as well as the provisions in the settlement. Thirdly are Toyota's stockholders. In the course of the recall, lawsuit, and subsequent settlement, Toyota stock experienced periods of decline, and little stability. The stockholders suffered as a result of Toyota's mismanagement of the vehicles, legal battle, and payout.

The theory of individualism means that one is best served to pursue their own interests without making choices for others. In a business sense, this theory means that a business' only goal is to profit for its stockholders, and that is its responsibility. Even with that in mind, Toyota was not acting ethically according to individualism, because they allowed the business to become awash with criticism, ultimately hurting their value. Toyota wanted to maximize profit and maintain an image by asserting they were not to blame for the problem vehicles, but in the end this came back to haunt them, by hurting their image even further.

In the utilitarian theory, the goal is to maximize happiness for all people, while keeping in mind that the ends do not justify the means. For a business, this means maintaining success, but not at the expense of another. Toyota did the opposite of that, focusing more on an egoist perspective, maximizing their own happiness above all others. They were far more interested in their own image and profits to worry about what they were doing to their customers and eventually stockholders. Alienating those who had invested in them showed that they were unethical according to utilitarianism, because they were uninterested in how those who are so integral to their business felt about their practices and products.

One of many crashes caused by accelerator in Toyota vehicle

The Kantian perspective means that one should act rationally to fulfill a purpose. In simpler terms, to act ethically according to Kant, one must do what is right because it is right, not for any other reasons. Toyota was clearly unethical according to the Kantian perspective, because their actions were carried out because Toyota believed it would give them the best chance at reviving their tarnished image. If they had done the right thing because it was the right thing to do, it would be safe to assume they would not have been in the predicament they are in. Toyota knew exactly what had happened and what went wrong, and knew they were to blame, but made the choices for the wrong reasons, and therefore were acting unethically according to Kantianism.

Virtue Theory
Virtue theory is a theory that is very simple to understand, and contains four key virtues. According to virtue theory, you must act rationally in order to live a good life, and the four main virtues are courage, honesty, temperance, and justice. When Toyota went about their case and settlement, all of the virtues save for temperance were ignored. They showed no courage in hiding behind their legal team while they blamed victims of their own faulty equipment. The lack of honesty is all too obvious, with false statements made about drivers who lost their lives to defective pieces installed by Toyota. And the fact that this went on without question from any authority shows a lack of justice for those affected by Toyota's actions.

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