Incidentally, the Chinese New Year 2010 starts on Valentine’s Day. The latter is an annual (and predictable!) peak in flower and chocolate demand, the former a source of disruption in any shipment that goes through ports where the Chinese New Year is celebrated.

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"I do not think that the expansion of the production overseas has affected the quality," Toyota vice president Shinichi Sasaki told a news conference, at which he issued a fresh apology by the company for the massive recall. "We have full trust in engineering and quality,"

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From CFO.com, here are finance executives' top 10 risk hot spots for 2010:
1. Strategic change management. The upheaval of the past year and the desire to seize opportunities during the recovery will make for a lot of changes, including mergers, acquisitions, and divestitures. These shifts leave a lot of room for controls to fall through the cracks and can create new liabilities.

2. Capacity. Faced with uncertain demand, companies risk both over- and understaffing. Timing capital expenditures, such as new facilities or equipment, will also pose a challenge.

3. Incentive plans. Compensation is under extreme scrutiny in the wake of the recession and could pose a risk for public companies.

4. Human resources. Layoffs have left many companies with skill gaps and possible holes in their compliance structures.

5. Fraud. Widely thought to pick up (or be revealed) in down times, fraud can be easier to commit at companies that are short-staffed and under pressure, which would describe most businesses today.

6. Innovation/R&D. Companies that have cut back in this area during the downturn risk falling behind their competitors.

7. Third-party relationships. The collapse of Lehman Brothers opened CFOs' eyes to just how careful and far-reaching they need to be in evaluating third parties.

8. Shared services. Under pressure to cut costs, finance executives are exploring new locations for their back-office functions. These changes can affect companies' control structures and processes.

9. Inflation/Deflation. Currency risk remains an open question for 2010.

10. Tax management. Recession-scarred states are looking to raise funds through new taxes and stricter enforcement of existing tax laws.

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The French auto group PSA Peugeot Citroen said Feb. 1 it would recall 97,000 Peugeot 107s and Citroen C1s made in a Czech factory it shares with Toyota. PSA said the recall concerned cars "made in a factory shared" with Toyota in the Czech Republic and concerned "models constructed jointly."

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The Global Risks Index (GRI) measures a combination of strategic risks that are having an increasing impact on the global operations, supply chains and distribution networks of corporations. These include: terrorism, conflict, macroeconomic risks, rule of law, resource security, vulnerability to climate change, natural disasters, human rights violations, poverty, and risks from pandemics and infectious diseases. According to the GRI, 24 countries are at extreme risk, 17 of which are from Africa. Somalia (1), DR Congo (2), Zimbabwe (3) and Sudan (4) top the ranking, whilst Afghanistan (6), Nigeria (10), Iraq (12), Bangladesh (14), Pakistan (15) and Yemen (24) all feature amongst the poorest performing nations and are characterised by weak governance, internal conflicts and regional instability. Several of these countries, including DR Congo, Nigeria, Iraq and Pakistan, are owners of huge oil, gas and mineral reserves, which form important links in the supply chains of western and BRIC companies alike.

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The important point for you is NOT what happened at Toyota. Toyota will obviously and thankfully weather this storm and, down the road, repair their image. What matters is this: If an event like this…

• Can be linked to a small(ish) supplier
• And cause so much damage
• At the world’s most respected auto manufacturer

Then all of us have reason to be very afraid. Tomorrow morning, we also need to ask some very tough questions of ourselves and our supply chain and procurement leadership.

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For the second straight quarter, more than one-third of North American manufacturers responding to the MFGWatch survey, which  drew responses from 334 manufacturers of parts and services, purchasing professionals and engineers, say they've experienced a significant supply chain disruption in the past three months.

Also, expectations for excess capacity and employment growth expressed last quarter did not fully materialize.

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Toyota's Reputation for Quality is currently under fire.
A string of safety problems has put Toyota Motor's hard-won reputation at risk as critics question whether the company sacrificed its legendary quality to become world number one.
Toyota's unprecedented decision to suspend sales of eight models in the United States due to possible defects will undoubtedly hit its earnings, but the impact on its brand image could be even more serious, analysts said.

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Toyota said on Jan. 29 it will recall "up to 1.8 million vehicles" in Europe due to an accelerator pedal problem that has already led to massive recalls in the United States.
The models involved are the AYGO, iQ, Yaris, Auris, Corolla, Verso, Avensis and RAV4 series, covering a variety of periods going back to February 2005.

Toyota Recall Highlights Reliance on Suppliers: they may have the Toyota badge, but a big chunk of each vehicle made by the Japanese giant -- from screws to pedals and sometimes even the engine -- are produced by a vast network of suppliers.

A safety recall by Toyota of 2.3 million vehicles due to a problem with accelerator pedals made by U.S. firm CTS Corp. has highlighted the Japanese giant's growing dependency on components that are not made in its factories.

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