We’ve all sent the news of Toyota’s recall problems, including the latest decision to pull the andon as it were and halt production until the defect is sorted out. Suddenly the company, and its venerable Toyota Production System do not appear to be as infallible as it has in the past. Indeed, some analysts are predicting big problems for the company as it recovers from these highly visible quality problems, with many customers defecting to other brands.

I for one, am impressed by the speed and scope of the actions Toyota is taking to address the problem. Toyota will likely look at all of the causes of this, not just a faulty design or part that was used, but questioning conditions at the highest level. According to this morning’s New York Times, “Toyota’s president, Akio Toyoda, has himself berated the company for excessive confidence, which he said had set the company up for a painful fall in the global economic crisis.”

While the number of actual occurrences related to the defective parts may not be significant, Toyota is doing the right thing here.

Contrast this with the banking industry. Goldman Sachs created and sold products to investors, that it later bet against and made enormous profits when these products failed to perform. It’s like a car company selling cars known to be defective, and then buying insurance policies that paid off when the cars broke down. The best Goldman Sachs’ Lloyd Blankfein could muster up was a lame admission that this behavior may have been improper. Meanwhile, there is no evidence of efforts to correct this, or prevent it in the future.

Toyota is taking the responsible action in addressing this crisis – for that they should be admired.