Tuesday, February 02, 2010


Toyota's Japanese bosses slammed for sluggish response to safety problems

• Japanese carmaker will recall 4.45m cars over safety fears
• Toyota has not lost its edge on quality, says US chief Jim Lentz


Toyota may have earned points for acknowledging that the sheer scale of its second major vehicle recall in five months could leave a deep dent in sales this year, but the Japanese carmaker is winning few plaudits for its handling of the crisis.

If the Tokyo-based journalists who hopped onto bullet trains this morning to attend a hastily called news conference hundreds of miles away in Nagoya were expecting a public show of contrition, they – as well as customers and investors – were to be disappointed.


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Japan's industry minister presses embattled carmaker Toyota to limit the damage to the country's reputation for manufacturing excellence. Photograph Guardian


Toyota's president, Akio Toyoda, handpicked last year from the founding family to steer the firm out of the worst period in its history, was absent. Instead, the unenviable task of explaining the details of the recall fell to Toyota's executive in charge of quality and control, Shinichi Sasaki.

He at least acknowledged the perception that the firm had been slow to respond to the accelerator pedal problem that prompted the recall of 4.45m cars around the world.

"The size of the problem we have caused our customers is unprecedented," Sasaki, the only executive in attendance, told about 100 reporters. But there was no deep bow of apology, and not even a hint of the waterworks that have helped countless Japanese executives weather crises and scandals.

If Sasaki's concern was genuine, his timing of was questionable. Having announced the latest recall on 21 January, it took Toyota until Monday to send an executive in front of the cameras to apologise and respond to a flurry of hitherto unanswered questions.

Even that appearance took place thousands of miles away in the US, where Jim Lentz, president of Toyota Motor Sales USA, insisted the firm had "not lost our edge on quality."

But on this side of the Pacific, Toyota's questionable – some would say arrogant – PR performance risks sparking a global consumer backlash.

Industry watchers say much of the anxiety, and extra costs that could run into billions of dollars, could have been avoided had Toyoda, the grandson of Toyota's founder, immediately gone public with words of reassurance.

Instead, he has limited his comments to an apology while attending the World Economic Forum in Davos last week, and only when pressed by Japanese TV reporters.

Analysts warned that the company's handling of the crisis could have harsher repercussions than the recall itself, particularly in the vitally important US market.

"I've never seen Toyota like this," said Koji Endo, director at Advanced Research Japan. "Until recently, they had a culture of reacting swiftly to problems. But the impression I get now is that [its PR operation] is not functioning very properly."

While an apology does not necessarily equal accountability, Japan has grown accustomed in lean economic times to the unsettling sight of middle-aged executives, eyes down, delivering apologies through streams of tears.

Only last month similar corporate theatrics were on display when Haruka Nishimatsu and other outgoing directors at Japan Airlines [JAL] bowed in unison after the firm filed for bankruptcy.

In Japan a mea culpa, delivered with feeling, can go a long way towards placating investors and loyal, but demanding, consumers. Wayward celebrities have saved careers and convicted criminals secured leniency by doing as much.

As Toyota stalls in the face of consumer disquiet, mounting legal actions in the US and a gaping hole in its sales forecast, the government urged the firm to ensure that the recall does not ruin the name of another Japanese icon so soon after the JAL fiasco.

The firm must "limit the damage" from the recall, the industry minister, Masayuki Naoshima, told reporters.

Last October, Toyoda apologised for the fatal US crash that led to the first safety recall, and for the firm's lack of preparedness for the global economic crisis. His company, he said, was "grasping for salvation." It is an appeal many believe he would do well to repeat in the coming days.

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