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Toyota executives’ testimony comes off as clueless

February 25, 2010

Toyota executives’ testimony comes off as clueless


Akio Toyoda’s story doesn’t add up.

The president of Toyota Motor Corp., the centrally controlled behemoth founded 73 years ago by his grandfather, told a congressional committee Wednesday that he didn’t know about mounting sudden-acceleration complaints with Toyota vehicles until late last year.

He also didn’t know the substance of a corporate briefing paper prepared in July that touted $100 million in savings on recalls, warned about sudden acceleration complaints in Toyota and Lexus models and described a federal bureaucracy that is not "industry-friendly."

But now, faced with a global brand and P.R. fiasco, Toyoda knows with "absolute certainty" that the sudden unintended acceleration complaints tied to 34 deaths and the recall of 8.5 million vehicles worldwide cannot be attributed to electronic throttle controls in Toyota and Lexus cars and trucks.


The assurances might be more convincing — to Congress, to consumers, to dealers and to suppliers in the United States — if the Japanese automaker moved sooner than earlier this month to commission an independent review of its electronic conclusions. But it didn’t.

They might be more persuasive if the firm hired to do the testing, California-based Exponent Inc., didn’t have ties to Toyota’s legal counsel; if contacts on the issue between Toyota and U.S. regulators weren’t so extensive; if Toyota’s top American executive in the United States, James Lentz, hadn’t testified the day before that Toyota’s fixes had "not totally" fixed the problem.

Simple question, Toyoda-san: If the electronic throttle control isn’t (with "absolute certainty") the problem and if the planned fixes aren’t sufficient, what is?

The hearings over the past two days are remarkable for what they didn’t yield — namely, definitive answers. But we do know now how little the top executives in the most revered automaker on the planet seem to know about the circumstances surrounding the most serious threat to their corporate reputation in a generation.

To watch the hearings is to sense a lack of urgency — the new global quality committee doesn’t meet till the end of March? — and to see a company still processing the reality of the mess it faces, however much Toyoda blames it on a "speed of expansion" that "outpaced the development and training of our people."

"I’m embarrassed for you, sir," Rep. John Mica, R-Fla., said during Toyoda’s testimony to the House Oversight and Government Reform Committee. "I’m embarrassed for dealers. I’m embarrassed for the thousands of people who work for Toyota across the United States."

Why? Lots of reasons, the biggest of which is the simple fact that Toyota’s facade of all-knowing invincibility, of being an "American company," of always putting customers first lies shattered — all of it from the mouths of top executives, including the guy whose name is on the building.

The customer, as Toyoda and his president for North America, Yoshimi Inaba, conceded, increasingly did not come first. High-profile complaints, like that of the "possessed" ’06 Lexus ES 350 driven by Rhonda Smith from Sevierville, Tenn., were summarily dismissed.

Astonishingly, her harrowing story apparently was unknown to Lentz. He didn’t know the well-publicized details of Guadalupe Alberto, a 77-year-old who died in Flint when the Camry she was driving crashed into a tree — a testament to his stunning cluelessness, pitiful internal communication, Toyota’s lawyers or all three.

Over two days, Toyoda, Inaba and Lentz exposed the fiction that Toyota is an "American" company, if that is defined to mean anything more than a foreign company that employs 172,000 folks in plants, offices and dealerships around the country.

But for sales and marketing decision-making, every substantive call affecting Toyota’s operations in the United States — manufacturing, engineering, safety and recalls, communications — is made in Japan, they confirmed, a direct contradiction to the corporate spin for, oh, the past decade.

And "Japan," to borrow Lentz’s usage, failed to connect the dots on a burgeoning problem that landed its president before a congressional committee and ripped a gaping hole in Toyota’s envied reputation for bulletproof quality, reliability and customer service.

Toyoda, the scion of the industrial dynasty, said the right things. He apologized. He took responsibility. He essentially admitted that ambition outstripped execution and strayed from the corporate creed that made Toyota the brand powerhouse it became.

But he didn’t bring an end to the nightmare. Buried in his careful statements is red meat for trial lawyers looking to make a buck off Toyota’s $30 billion-plus cash hoard and red meat for like-minded politicians trolling for contributions from trial lawyers.

More obvious is the unmistakable admission that Toyota, the gold standard of the global auto industry, allowed the arrogance of success to blind it to festering troubles within.

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