Nice article Greg and a point well-made. But I can't resist going back to the original question: How could a company's quality reputation be diluted so quickly?
Your article was more about how it happened and a look at contributing causes than an answer to your opening question. So let's look at the question again. I think Toyota's reputation was diluted so quickly because the media is having a field day with it. There is nothing better in the world of news than when a big guy goes down. This is right up there with Tiger Woods as far as applying the old saying - the bigger they are the harder they fall. I am not saying the media is to blame or making any judgement about whether Toyota deserves it or not. I am merely relating what I thought when I read your question. A reputation can only be diluted quickly when word spreads quickly. And in this case the huge surge of Toyota related news and analysis from all fronts seems to be enough to do the job. And Quality Digest seems to be doing it's part. I have noticed that recently there seems to be at least one Toyota article in QD online each week. Out of 12 articles! Seems like you guys have a quota. Speak to Mick about that - he will encourage you that quotas are a bad thing.

The media picking up on a safety issue, what a crime. I am sorry the problem with Toyota’s reputation is ego, as alluded to in the article, related to the way Japanese car makers (maybe others) have hid their recalls. I experienced a hidden recall with Acura some years back. Certain Japanese makers have brought attention to the fact they have less recalls and to some extent this is true (Toyota’s overall product lifetime quality is undeniable) but they would “take care of some things” without the broadcast recall. So if the media is focused on this now, too bad, something they have done caught up with them.
Toyota has made one of the best cars in terms of long-term quality throughout, and still probably does. However they were unable to admit to this defect or defects and tried to hide this failure. That is ego and a cultural philosophy for the company and could have a background in Japanese culture. They got caught and made a stupid miscalculation of the impact it would have on their company.
The emphasis as quality people has become a focus on the systems, Six Sigma, Lean Manufacturing, or whatever method of the day and not the end game “the customer ultimately with profit”. These systems are just tools to accomplish that end. When you lose that focus I don’t care what your statistics say, you have failed.
Sometimes you have to admit the mistake before it is “found out” take you punishment, contain the problem and fix what is broken in your company so it does not recur.

W. Edwards Deming said to Japanese management - they must remain vigilent in their pursuit of quality. Quality comes first. Or in Joseph Juran's terminology "fitness for use". If the TV blows up the second or third time I use it, it doesn't matter how great the picture looked before that - the set is junk.
As a product becomes more and more complex fitness for use beomes increasing more difficult. And quality efforts by Japanese management were already showing the strain before these series of tragic events. But to implement an entirely new set of products - the hybrids over such a short period of time without abandoning your other lines was a disaster in the making. Toyota essentially expanded its offerings diffusing its quality efforts and making the situation much more difficult than it had to be.
Why did Toyota still make a non-hybrid Camry? A non-hybrid Highlander? Once you bridge the gap and see that the product works eliminate the inefficient so you can focus on bringing costs down and narrow your quality concerns. Didn't happen. Expansion and complexity don't work well together.

I find it funny as well that a company with such a good reputation as Toyota has had such a swift decline and the media is, in my opinion, only partially to blame. Does it seem strange to anyone else that the problem is so big and so quick, almost too big and quick. I mean, it almost seems intentional.
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Where do we begin? At the top, as old-time Toyota executives would attest. The guilt and apology have been acknowledged. Only Toyota management knows what is going on inside the plants. I imagine that heads are rolling, politely of course. Read Crichton’s Rising Sun for a sense of how Japanese management is. The Seventh Deadly Sin of Pride (from which the 6 others can be traced) is certainly present as is the other six. They will discover that the tools are not the culprit – but the people using the tools are. Great tools and bad judgment still make a bad product. The Process will be fixed. A good process has a 1.0 - .9997 chance of making an incorrect decision by random chance alone – Probably more if the decision process is influenced (a.k.a. biased) by ‘politics’ or such. A Bad or Biased process has almost no chance of making a good product, except by random chance. The ‘Baby’ will not be “thrown out with the Bathwater” on this go-around.
Americans like to say, incorrectly, that “Perception is reality.” This is another instance where that opinion is not right. The Perception is that Toyota has lost its quality so buy Government Motors. The Reality is that Toyota and Honda automotive quality is so far above American automotive quality that even on their worst day, the Japanese are better than U.S. Why? Well think “Long Term” not ”Short Term.” Think 50 years of using quality tools like Americans use a calculator…second nature. Think “Fix the Process” not “Find the Perp.”

Greg, Great article thanks, and joining the dots is tiger country here in New Zealand too - obviously they don't teach it on MBA courses! In fact knowing what I know and who gets the jobs and how they behave, I wonder just what IS taught on MBA course that is useful.... As for your article, I take issue only with your view that Toyota's reputation is in ruins. I don't think their reputation will suffer much or for long for three reasons. First, they still make the best vehicles in the world. Anyone thinking their market opposites from the US or Europe (inc Germany) are in the same league is in fairyland. Secondly, as the saying goes, if you've never made a mistake you've never made anything. Toyota made a mistake, admitted it and their owner is taking responsibility for it. We didn't see excuses, lawyers and "not my fault" gibberish. I have no doubt Mr Toyoda will learn from this episode and ensure it won't happen again. US car makers have made the same mistakes for so long they've destroyed their entire industry - sadly, this is absolutely no surprise to any petrol head with QA skills living outside the US. Look around you, you guys over there, your motor industry has been a laughing stock for generations. Go back no further than the Ford Pinto and shudder at the "not my fault" legal fees. And don't forget Ford were Deming aficionados too, although not until the poor guy was an octogenarian! Didn't learn too well did they? But then Deming did say that America should export all it can - except American management. Thirdly, there is no such thing as bad advertising. Toyota is getting free column inches.....

Mistakes yes, complacent, I doubt it...we shall see..

Great stuff....