Tags: Toyota | Japan | recall | US

Toyota Reeling in Japan Over Recall

Monday, 22 February 2010 10:15 AM

TOKYO — It is a measure of the depth of fears surrounding the safety of Toyota’s cars that its media-shy president, Akio Toyoda, has briefed the massed ranks of the Tokyo press corps three times in less than two weeks.

Last week, as he discussed the latest installment in the recall of more than 8 million vehicles worldwide, it appeared that the cacophony of criticism over his handling of the crisis was beginning to resonate.

It is only fair to acknowledge the few things Toyota has got right in the past week or so. It reportedly plans to disclose all faults – right down to sticky windows and doors – in its vehicles and has announced the launch of a quality assurance committee under Toyoda’s direct control.

Toyoda apologized to anxious American drivers in the pages of the Washington Post, and after announcing that he would send another executive to face the U.S. Congress on Feb. 24, he has now agreed to face the music in person.

He has his work cut out. The firm his grandfather founded in 1937 has much to do to satisfy U.S. safety authorities and politicians who, it is patently clear, are enjoying their moment of schadenfreude and relishing the prospect of giving Toyoda a public dressing down.

A few American voices are emerging in Toyota’s defense, but the overriding sentiment is one of anger — mixed with disbelief — that a company synonymous with quality and reliability has come unstuck in such devastating fashion.

In Japan, the public mood is more difficult to gauge. Compared with their U.S. and European counterparts, the media response here has been muted, with the exception of restrained rumblings in the op-ed pages of the major papers.

Japan’s inclusion in the recall of the Prius, the hybrid jewel in Toyota’s fuel-efficient crown, has put an end to the days when the carmaker could threaten to pull ads in retaliation for even mildly critical coverage.

While the stateside outcry has not been replicated on this side of the Pacific, politicians, consumers and high-profile members of Japan Inc. are uneasy about the damage the recall is inflicting on their country’s reputation.

While Toyota is not alone among Japanese companies in its inept approach to customer relations, its problems have been amplified by its status as a standard bearer for the country’s postwar economic revival.

Its cars are driven by millions of Japanese, including the prime minister and members of the imperial family. Even in the firm’s grimmest hour, it is hard to find anyone here who regards the recall as anything more than a blip.

That doesn’t change the fact that Toyota has handled the public relations operation with all the aplomb of a bumbling amateur.

Its initial response to the recall was an exercise in face-saving opacity. Toyoda went AWOL for two weeks, and when he finally surfaced, his comments merely highlighted the hazards involved when a quintessentially Japanese company is forced to manage a crisis spanning myriad cultures and consumer sensibilities.

Toyota didn’t help itself with displays of the familiar arrogance it cultivated in the days when it was raking in record profits and going bumper-to-bumper with General Motors in the race for the title of world’s biggest automaker.

That Toyoda’s flip-flop on the congressional hearings came only after nudging from senators only proves how much he has to learn about the qualities required of a 21st-century CEO.

For observers of other quality-control scandals in Japan, Toyota’s response followed a familiar pattern of denial, foot-dragging and insensitivity. The last decade alone has produced a long list of examples, from faulty kerosene heaters and exploding televisions, to tainted milk and deliberately mislabeled beef.

In Japan, the producer is king and the consumer a mere irritant, while stakeholder advocacy is pitifully underdeveloped. The bigger and wealthier the company, the greater the indifference – just ask Japan Airlines shareholders who will see their investments reduced to zero Feb. 20 when the firm is delisted from the Tokyo Stock Exchange.

If one good thing comes out of the recall debacle, it will be a genuine effort, by Toyota and other Japanese manufacturers, to match their admirable capacity for monozukuri (making things) with more transparency and accountability to the people who buy their products.

Japan's unshakeable popular faith in those products has an important upside for Toyota in its hour of need: it is hard to find anyone who does not believe the carmaker will dust itself off and re-emerge even stronger than before. And after the events of the past few weeks, Japan’s bruised icon needs all the goodwill it can get.

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Monday, 22 February 2010 10:15 AM
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