Toyota's "Books of Knowledge"

By now everyone has heard of Toyota's problems -- with both their cars and their reputation. The company's problems have only gotten worse. The Chairman of the House Oversight and Government Reform Committee is raising concerns that the company may have deliberately withheld information required to be disclosed as part of previous lawsuits. Chairman Ed Towns has given Toyota until March 12 to respond.

But, one of the main whistleblowers, former Toyota lawyer Dimitrios Biller, seems to be claiming that the information is more than just some data on crashes and lawsuits. Those claims apparently are in the documents subpoenaed by the Committee. As an article in the Washington Post explains:

The documents include Biller's recounting of a 2006 arbitration case against Toyota involving a vehicle rollover that left the driver paralyzed. Toyota was willing to pay a premium settlement to prevent the plaintiff's lawyers from getting access to Toyota's Books of Knowledge, which, Biller writes, "contain highly sensitive information that rises to the level of trade secrets and highly confidential information."
In the documents, Biller explains: "The Books of Knowledge contain information on how to design vehicles and component parts (including safety systems like seat belts, side curtain airbags). The information does not relate to any one particular vehicle; the information relates to all vehicles. The information is essentially design principles and philosophies that serve the foundation for how Toyota designs its vehicles." (emphasis added)

Toyota has long been known as a company heavy on intangible capital. The famous Toyota production system -- including its relationship with its suppliers -- is credited with making the company the world leader. If the "Books of Knowledge" are really as comprehensive as Biller claims, they would be the repository of much of that intangible capital. And one can understand the company's reluctance to make that information public. If the information can be claimed as trade secrets, the company may be able to avoid some disclosure. But so far, the company has played the management of these intangibles badly.

It will be interesting to see how they respond to Chairman Towns' request.