Reference no: EM133002835

Five months before the new 2002 Lexus ES hit showroom floors, the company's U.S. engineers sent a test report to Toyota City in Japan: The luxury sedan shifted gears so roughly that it was "not acceptable for production." Days later, another Japanese executive sent an e-mail to top manager saying that despite misgivings amount by U.S. officials, the 2002 Lexus was "marginally acceptable for production." The new ES went on sale across the nation on October 1, 2001. In years to come, thousands of Lexus owners discovered that some of the vehicles had transmission problems, which caused it to hesitate when motorists hit the gas or lurch forward unintentionally. The 2002-2006 ES models would become the target of lawsuits, federal safety investigations, and hundreds of consumer complaints, including claims of 49 injuries. In an August 15, 2005, memo explaining the company's position, a staff attorney wrote "The objective will be to limit the number of vehicles to be services to those owners who complain and to limit the per-vehicle cost." In 2010, Toyota was fined a record $16.4 million for delays in notifying U.S. federal safety officials about defects that could lead to sudden acceleration.

Problem 1: What are the common features in the automobile product defect cases discussed in the text and in this question?

Problem 2: What role did corporate governance play in the way they were handled by management?