U.S. President Obama took power in the face of a global financial crisis and an even more dramatic economic downturn within his country.  His inauguration marked a turning point:  government repudiated its belief in the invisible hand of the marketplace and opted for a much more interventionist stance.  Massive bailouts to the failing auto industry ensued, and Canada and Ontario rapidly followed suit to protect Canada’s share of the market.  With this activism came protectionism, and a strange new business market emerged by the summer of 2009.  Obama’s Cash For Clunkers campaign offered up to $4500. to an owner to scrap an older vehicle and buy a new one.  $3 billion evaporated in weeks, and the car market has been skewed once again in favour of the immediate sale over the long term relationship with the customer.

As the billions ran out, Edmunds.com posted an analysis suggesting that every clunker retired actually costs the U.S. people $20,000, a classic illustration of the broken window theory.  Then economistmom.com released an article entitled Could I Really Kill My Clunker?  “It just seems very wasteful (and somehow ‘heartless’, even with a car) to prematurely end a ‘life’ that still could be valuable to someone–doesn’t it?”

Many owners don’t want a new set of wheels.  I drove my ’95 4Runner to 370,000 km just to see how long it would last.  Then my friend Tony took it to 400,000, and it’s still going.  It has driven clean through every eTest it has ever had, and gives mileage in the mid twenties.  Why should it be taken off the road?

Toyota seems to have come up with a stimulus plan for those who see the fallacy in the argument that a broken window is good for everybody.  For Tacomas registered in the rust belt, they’ve retroactively extended the corrosion warranty on the frame to fifteen years.  This addresses a problem on a number of truck frames purchased from Dana, a California supplier, which made it into production without proper corrosion protection.

The program has produced a good deal of Internet buzz.  Toyota’s offering to buy back terminally ill trucks at 150% of retail value.  An extravagant gift, but not an absurd one in the face of the current blizzard of handouts in the automotive trade.  More significantly, they’re replacing frames on trucks in good condition which do not pass inspection.  This is a big job, but in a week or two the truck comes out of the shop with a new frame.  The owner gets a free loaner in the meantime.  For the vast majority of Tacoma owners, the program means a free frame inspection, minor frame repairs, and an extensive anti-corrosion treatment to extend the life of the truck’s frame to at least fifteen years.

A program like this appeals to men who like their machines.  I looked on a driving site (canadiandriver.com) and a tractor site (tractorbynet.com) to get a sampling of how North American men feel about this realistic, if generous, extended warranty program.  A new metaphor seems to have emerged.  The phrase “Toyota has stepped up” appeared in a surprising number of the postings I read.  It will be interesting if the phrase goes viral, appearing in mainstream media as well as on Internet discussion boards.

The Buzz:

On canadiandriver.com, Snowman commented:  “Because Sudbury is in the salt belt I know of three Tacoma owners that had their trucks inspected at the dealer and received 1.5 times the book values on their Tacomas. One guy paid $8500 and received $13k and promptly bought another one from the dealer. How many manufacturers would do this? The word of mouth advertising has been amazing and has many people I know talking about the commitment Toyota has towards their customers.”

On tractorbynet.com, Matt Jr. wrote:  “Although I’m glad I own a Chevy, I still think the Toyota is a good truck. The domestics would have a hard time living that one up.”

TCowner added:  “I agree that Toyota, Nissan and some of the others are treated a little easier than the domestic manufacturers when it comes to defects but man, this is an ingenious marketing move. I have no idea what this will cost Toyota but this decision will bring more customers into the showroom.  Ford beats up Toyota on their weak frame and how it flexes so much more than the Ford. But I think it’s pretty safe to say that neither Ford nor GM would ever consider an extended warranty program like this which would include buying the truck back at top book value.”

Podunkadunk commented:  “Ford’s running a nationally televised TV commercial right now and in it, they are stating ‘Quality that’s now equal to Toyota’…  I doubt it, but hey…it’s their nickel.”

Dfkrug reflected the attitude of many posters:  “Toyota is far from infallible, but they have stepped up numerous times when problems arose.”

And finally, a Dr. Spock wrote:  “A good reputation can go much further than a good product.   If you have a good product but a bad rep, no one is going to buy from you.   If you have a good rep and a so-so product, people will still buy from you because they feel they can trust you.”

I found this on Edmunds.com.  Toyota’s serious about fixing rusty frames.

2001 – 2004 Canadian Tacoma Owners take a look.. copied from Yotatech

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Subject: Advanced Notification on Customer Satisfaction Campaign 917 – Warranty Coverage Extension for Tacoma Frame Rust Corrosion Perforation

For your advanced information, TCI will be initiating a Customer Satisfaction Campaign 917 on certain 2001 through 2004 Model Year Tacoma vehicles to extend the warranty coverage for perforation of the vehicle’s frame caused by rust corrosion.

In order to receive the warranty extension, customers must bring in their vehicle to an authorized Toyota dealer for inspection and to have a Corrosion-Resistant Treatment applied to the frame and (where necessary) any frame repairs performed.

Q1: What is the condition?

A1: Toyota has received reports regarding a number of 2001 through 2004 model year Tacoma vehicles exhibiting excessive rust corrosion to the frame, causing perforation of the metal.

Q1a: What is the cause of this condition?

A1a: The frames on a number of vehicles may not have adequate corrosion-resistant protection. This combined with prolonged exposure to road salts and other environmental factors may contribute to the development of excessive rust corrosion in the frames of some vehicles. This is unrelated to and separate from normal surface rust which is commonly found on metallic surfaces after some years of usage and/or exposure to the environment.

Q2: What is Toyota going to do?

A2: Although the vehicle’s frame is covered by Toyota’s New Vehicle Limited Warranty for 3 years or 60,000 kilometers (whichever comes first), we at Toyota care about the customer’s overall experience and confidence in their vehicle. To assure our customers that we stand behind the product, we will extend the warranty coverage, for a total of fifteen years/unlimited mileage from the vehicle’s in-service date, on the vehicle’s frame for this specific condition, subject to the terms and conditions outlined in the owner notification letter.

Q3: Is it a safety issue?

A3: No. All iron based metallic material will eventually rust. This issue is related to inadequate corrosion-resistance protection, therefore, we believe this is a long term durability issue.

Q4: Is this a recall?

A4: No. This is an extension of the warranty coverage on 2001 through 2004 model year Tacoma vehicles for perforation of the vehicle’s frame caused by rust corrosion. This warranty extension, subject to certain conditions, will be provided for a period of 15 years with no mileage limitation from the vehicle’s in-service date, for this specific condition.

Q5: Why is Toyota launching this Customer Satisfaction Campaign?

A5: We at Toyota care about the customer’s overall experience with and confidence in their vehicle. To assure our customers that we stand behind the product, we are providing, subject to certain terms and conditions detailed in the Owner’s letter, an extension of the warranty coverage on certain 2001 through 2004 model year Tacoma vehicles for perforation of the vehicle’s frame caused by rust corrosion.

Q6: What are some of the terms and conditions of the Warranty Extension?

A6: In order for the warranty enhancement to apply, the customer must bring the vehicle to a Toyota dealer before October 31, 2010. The dealer will inspect the condition of the frame and apply a corrosion-resistant treatment at no charge to the customer. Owners of affected vehicles will receive the details of this program in the owner notification.

Q7: Does this Customer Satisfaction Campaign apply to rusted body panels?

A7: No. This Customer Satisfaction Campaign only applies to the frame of certain 2001 to 2004 model year Tacoma vehicles.

Q8: Are 1995 to 2000 model year Tacomas covered under this program?

A8: No. Toyota launched a Customer Support Program in early 2008 for 1995 to 2000 model year Tacoma vehicles.

Q9: Are there any other Toyota or Lexus models included in this program?

A9: No. This Warranty Enhancement only applies to 2001 to 2004 Model Year Tacoma vehicles.

Q10: What is Toyota’s standard rust perforation warranty coverage for the frame?

A10: Under the Toyota New Vehicle Warranty, the frame is covered by Toyota’s New Vehicle Limited Warranty for 3 years or 60,000 kilometers (whichever comes first). This is typical practice in the automotive industry.

Q11: When did you learn about this condition?

A11: We began to investigate this issue in 2001 through 2004 trucks in the first quarter of 2008.

Q12: What is involved in the corrosion-resistant treatment?

A12: Any Toyota dealership will inspect the condition of the vehicle’s frame and apply a corrosion-resistant treatment. The treatment will be applied to both external and internal surfaces of the frame to enhance the corrosion protection of the Tacoma’s frame.

Q13: How long will the corrosion-resistant treatment take?

A13: The treatment process is an overnight process. However, depending upon the dealer’s work
schedule, it may be necessary to make the vehicle available for a longer period of time. During the corrosion-resistant treatment process, however, the Toyota dealer will arrange for a complimentary loaner vehicle for the customer’s use at no charge while the vehicle is being treated.

Q14: What is the warranty on the corrosion-resistant treatment?

A14: The frame on Tacoma vehicles included in this program will be covered by the warranty enhancement. The enhancement, subject to the terms and conditions outlined in the owner notification letter, is for a period of 15 years with no mileage limitations from the vehicle’s in service date for perforation of the vehicle’s frame caused by rust corrosion.

Q15: What if a vehicle has already experienced this condition?

A15: Any Toyota dealer will inspect the vehicle’s frame and apply the corrosion-resistant treatment if the frame is not perforated due to this condition. If the inspection of the vehicles confirms excessive rust corrosion to the frame causing perforation of the metal, Toyota will, at its option, either repair or repurchase the vehicle.

Q16: What is Toyota going to do if perforation of the vehicle’s frame caused by rust corrosion is found?

A16: Upon confirmation, Toyota will, at its option, either repair or repurchase the vehicle.

Q17: Is there any special consideration in the case of vehicle repurchase?

A17: In the case of repurchase, Toyota Canada will reimburse the customer for the value of their vehicle up to 1.5 times the Canadian Black Book® Suggested Retail Value or at original MSRP when the vehicle was purchased, whichever is lower. The vehicle will be assessed as a vehicle in excellent condition regardless of the vehicle’s actual condition; however, a deduction will be made for moderate damage and/or missing components. Owners will receive detailed information about the terms and conditions for this program in the owner notificat