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Wikipedia: > [Daihatsu] has been a wholly-owned subsidiary of the Toyota Motor Corporation since August 2016. Did a good company accidentally acquire a compan

by neilv 3y ago

Wikipedia: > [Daihatsu] has been a wholly-owned subsidiary of the Toyota Motor Corporation since August 2016. Did a good company accidentally acquire a company with a very serious secret problem?

dharmab 3y ago
Toyota has been a major shareholder of Daihatsu since the late 60s, with veto power since the mid-90s and majority ownership since the late 90s.
- hef19898 3y ago
  The question is how much control Toyota had over operational decisions. I'd say not too much, even with Daihatsu being a subsidiary of Toyota. Either way, Daihatsu cheating and lying to pass safety tests for 30 years is bad, and hints at a deep seated culture issue.
  - to11mtm 3y ago
    > The question is how much control Toyota had over operational decisions. I'd say not too much, even with Daihatsu being a subsidiary of Toyota. It could go either way, IMO. It didn't take long for folks to the Toyotafication of Subaru's as Toyota's ownership increased. In general it doesn't take a lot of ownership for a carmaker to start getting some pressure.
  - numpad0 3y ago
    Daihatsu CEO right now is ex Toyota regional CTO for APAC, so there's that. One of contributing factors, as being told in news narratives, is Daihatsu relied on shortened time to market and therefore reduced engineering man-hours as a cost saving measure, and there were barely enough time for scheduled tests, let alone for delaying ones affected by known issues, which had incentivized test engineers to just rig the test and/or forge documents. Toyota is also known for persistently demanding suppliers to contribute towards $20-30MM yearly cost saving target by reducing price by 1% every half years(~100MM and 5.85% every 3 years). That surely had contributed, and frankly that itself is a culture issue.
    - freetime2 3y ago
      Yup, I would like to see a similar third party audit performed at Toyota, too. Toyota and Daihatsu cars share a lot of the same technology and engineering resources, similar to the relationship between Lexus and Toyota. I can’t help but wonder if they also share a similar approach to safety testing.
Aurornis 3y ago
It’s clear that the problems started long before Toyota had whole or even majority ownership. Even from dealing with acquisitions at much smaller scales in the tech industry, I was surprised at how frequently we encountered small companies bending the rules or outright flouting the law. Discovering blatant legal or safety violations would have ended the acquisition talks, but these problems are often so deeply embedded in the company that you simply can’t expose everything during due diligence. These problems may have been baked into processes and common knowledge among a small group of people who were more interested in making their own jobs easier and maintaining their position of power than in adhering to the law. They might have had an “everyone does it” attitude after coming from other companies they also broke the law. Once it starts and they don’t have any consequences for a couple years, it becomes the de facto standard in the company. And because it doesn’t show up on a balance sheet or in any of the auditable documentation, it takes a very long time for someone to raise the issue and possibly risk their job in the process. At one point we talked to some people who had been breaking a regulatory law for years and they genuinely had no idea. They had just been doing things the way they learned at another company and thought it was all above board.
- PH95VuimJjqBqy 3y ago
  smaller companies often will do 1 of 2 things, both for the same reason. 1. They'll over-adhere to regulatory compliance/security 2. They'll under-adhere to regulatory compliance/security. It's often done for the same reason: ignorance. It's a question of culture/personality, do they play scared or fast and loose? often times smaller companies don't have the money or the time to develop the expertise they need in the regulations, hence why they make guesses and over or under adjust. One of the reasons I dislike "security" people so much is that they often turn into a combination of 1. no real idea what they're doing 2. a tendency to over-adhere, and 3. a belief that security automatically always trumps other concerns.
wolverine876 3y ago
With the benefits of ownership come everything else. If Toyota didn't know about this issue, that's a major failure of Toyota management. If they did know, it's more of a failure.

by neilv 3y ago

Wikipedia: > [Daihatsu] has been a wholly-owned subsidiary of the Toyota Motor Corporation since August 2016. Did a good company accidentally acquire a company with a very serious secret problem?

dharmab 3y ago

Toyota has been a major shareholder of Daihatsu since the late 60s, with veto power since the mid-90s and majority ownership since the late 90s.

hef19898 3y ago
The question is how much control Toyota had over operational decisions. I'd say not too much, even with Daihatsu being a subsidiary of Toyota. Either way, Daihatsu cheating and lying to pass safety tests for 30 years is bad, and hints at a deep seated culture issue.
- to11mtm 3y ago
  > The question is how much control Toyota had over operational decisions. I'd say not too much, even with Daihatsu being a subsidiary of Toyota. It could go either way, IMO. It didn't take long for folks to the Toyotafication of Subaru's as Toyota's ownership increased. In general it doesn't take a lot of ownership for a carmaker to start getting some pressure.
- numpad0 3y ago
  Daihatsu CEO right now is ex Toyota regional CTO for APAC, so there's that. One of contributing factors, as being told in news narratives, is Daihatsu relied on shortened time to market and therefore reduced engineering man-hours as a cost saving measure, and there were barely enough time for scheduled tests, let alone for delaying ones affected by known issues, which had incentivized test engineers to just rig the test and/or forge documents. Toyota is also known for persistently demanding suppliers to contribute towards $20-30MM yearly cost saving target by reducing price by 1% every half years(~100MM and 5.85% every 3 years). That surely had contributed, and frankly that itself is a culture issue.
  - freetime2 3y ago
    Yup, I would like to see a similar third party audit performed at Toyota, too. Toyota and Daihatsu cars share a lot of the same technology and engineering resources, similar to the relationship between Lexus and Toyota. I can’t help but wonder if they also share a similar approach to safety testing.

Aurornis 3y ago

It’s clear that the problems started long before Toyota had whole or even majority ownership. Even from dealing with acquisitions at much smaller scales in the tech industry, I was surprised at how frequently we encountered small companies bending the rules or outright flouting the law. Discovering blatant legal or safety violations would have ended the acquisition talks, but these problems are often so deeply embedded in the company that you simply can’t expose everything during due diligence. These problems may have been baked into processes and common knowledge among a small group of people who were more interested in making their own jobs easier and maintaining their position of power than in adhering to the law. They might have had an “everyone does it” attitude after coming from other companies they also broke the law. Once it starts and they don’t have any consequences for a couple years, it becomes the de facto standard in the company. And because it doesn’t show up on a balance sheet or in any of the auditable documentation, it takes a very long time for someone to raise the issue and possibly risk their job in the process. At one point we talked to some people who had been breaking a regulatory law for years and they genuinely had no idea. They had just been doing things the way they learned at another company and thought it was all above board.

PH95VuimJjqBqy 3y ago
smaller companies often will do 1 of 2 things, both for the same reason. 1. They'll over-adhere to regulatory compliance/security 2. They'll under-adhere to regulatory compliance/security. It's often done for the same reason: ignorance. It's a question of culture/personality, do they play scared or fast and loose? often times smaller companies don't have the money or the time to develop the expertise they need in the regulations, hence why they make guesses and over or under adjust. One of the reasons I dislike "security" people so much is that they often turn into a combination of 1. no real idea what they're doing 2. a tendency to over-adhere, and 3. a belief that security automatically always trumps other concerns.

wolverine876 3y ago

With the benefits of ownership come everything else. If Toyota didn't know about this issue, that's a major failure of Toyota management. If they did know, it's more of a failure.