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Toyota Won’t Abandon Japan

CEO Toyoda will maintain “illogical” Japanese production base.

by on Jul.15, 2011

It may be "illogical," but Toyota CEO Akio Toyoda won't give up on building cars like Prius in Japan.

As his nation struggles to rebuild after the devastating earthquake and tsunami of March 11, Toyota Motor Co. CEO Akio Toyoda says he won’t contribute to Japan‘s problems by shifting more automotive production offshore – even as it contributes billions of yen in losses to the world’s largest automaker.

There had been mounting fears in the troubled Asian nation – but hope among many investors – that the Toyota family heir would use the crisis to justify a shift away from the home market reliance that has made it difficult to resume production after the disaster.  Japan’s largest automaker, Toyota has traditionally positioned its hefty Japanese production base as a matter of civic responsibility, though in the weeks after March 11, Toyoda admitted it was becoming increasingly “illogical.”

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Toyota controls roughly half of the home market, but its production base there is far more than what’s needed simply to supply Japanese vehicle needs.  Competitors like Nissan have steadily fled offshore – Nissan CEO Carlos Ghosn closing four Japanese plants since taking over that company’s reins in 1999.  But while most of Toyota’s growth has been fueled by new plants in places like North America, Europe and China, the maker has been reluctant to walk away from its original production base.

“Toyota is a company that was born and raised in Japan and we can’t just abandon it because the environment is difficult,” said the grandson of the company founder, insisting the automaker would “grit our teeth and protect Japanese manufacturing.”


Toyota “Did Receive Damage,” Says CEO Akio Toyoda

by on Jan.11, 2011

Akio Toyoda with his onizuri.

It hasn’t been an easy year for Toyota Motor Co., but the maker’s CEO and founding family heir Akio Toyota says he’s confident the worst is over and the rebuilding process begun.

During his first visit to the annual Detroit Auto Show, Toyoda made an onstage appearance helping introduce a new line-up of hybrids that will share the popular Prius brand name.  The executive then met with a small group of reporters to discuss the company’s problems and plans, notably including efforts to rebuild its once-sterling image – which has been tattered by a series of safety-related recalls.

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“Toyota did receive damage,” Toyota bluntly acknowledged, though he was equally quick to insist that despite ongoing concerns – and a series of lawsuits – the company’s products “are safe.”

“The past year was extra trying,” he said through a translator, though he also insisted that the company did better than might have been expected on a sales front.


Toyota’s Global Troubles: Cosmic Rays and Lawyers

No sign the safety crisis at the world’s largest maker is ending.

by on Mar.16, 2010

The bottom line is only one place Toyota could take a beating in the months to come, after CEO Akio Toyoda took his own hits at a Congressional hearing.

In the comic books, cosmic rays are likely to turn your big, green and mean, or give you the ability to fly and turn invisible.  But frustrated in their attempts to find a cause for still-unexplained problems with Toyota vehicles that allegedly race out of control, investigators are now looking at the possibility that rare cosmic ray strikes could cause onboard computer systems to race out of control.

Toyota is finding itself in an unusual and increasingly untenable position.  The maker has already recalled more than 8 million vehicles around the world.  But despite its efforts to focus on two fixes – and several high-profile efforts to dismiss critics who contend there are other, as yet-unidentified problems with electronic controls – there’s little sign the safety crisis surrounding the world’s largest automaker is about to end.

Quite the contrary.  Though a hefty increase in incentive spending is bringing buyers back to U.S. showrooms, sales are slipping in other parts of the world, notably Europe, where Toyota struggled long and hard to crack into a market much less open to Asian imports than the States.

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Meanwhile, hundreds of plaintiff attorneys are queuing up for the right to take the automaker on in court in what could turn into one of the most contentious legal battles ever involving the auto industry, observers warn.


After D.C. Hearings, Now What for Toyota?

Reluctant CEOs appearance not enough to begin brand’s turnaround from the damages of an ongoing safety scandal.

by on Feb.25, 2010

Toyota CEO Toyoda was cool under fire, but may not have doused the flames of the safety scandal.

Throughout a blistering afternoon that could have broken a weaker man, Akio Toyoda, often described as the “reluctant” President and CEO of embattled Toyota Motor Co., retained a sense of cool as he stared down the members of a Congressional committee investigating problems that have not only resulted in the recall of millions of Toyota products but tattered a reputation the maker has spent decades cultivating.

It was a critical moment for both Toyota and Toyoda, the executive initially declining to come to Washington, then reversing that stand in the wake of furious headlines.  But with a relatively weak grip on English, and the likelihood that the members of the House Oversight and Government Reform Committee would engage as much in a sort of Kabuki theater as a real inquiry, many observers wondered whether the 53-year grandson of Toyota’s founder could salvage both the automaker’s reputation – and his own.

Sticking close to the script, Toyoda wouldn’t give much ground, despite the toughest questions.  But neither would he yield many details – leaving that up to his subordinates.  And there may lie the real future of Toyota, for in two days of testimony before a pair of Capitol Hill committees, the company that has long stressed safety and quality as its hallmarks suddenly seems both more interested in the bottom line and less able to build safe, reliable cars.

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Toyoda’s appearance before the Oversight Committee began on a reasonably congenial note.  After swearing in, the Toyota chief executive read from a prepared statement in a heavily accented but understandable English.  And, as he has done during three news conferences, back in Japan, in recent weeks, Toyoda began with an apology for the problems his company has caused.

“My name is on every car. You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers,” said the man often referred to as “The Prince,” back in Japan.  In turn, the assembled Congress men and women offered polite thanks for Toyoda’s decision to come to Washington.  But the friendly tone didn’t last very long, and the executive switched to working in Japanese, through a translator.


Three Charges Arise at Hearing on Toyota Safety

Both Toyota and NHTSA accused of cover-ups, incompetence and unacceptable behavior at the first House Hearing.

by on Feb.23, 2010

In sworn testimony today, Toyota's U.S. head Jim Lentz now admits that 70% of unintended acceleration complaints are not covered by current Toyota recalls. Worse, recall authority resided in Japan. Then, Lentz admitted he was unaware of the safety recall procedures in use at Toyota globally. The flow of information was one way - from the U.S. to Japan, said Lentz. The Japanese did not share global information about defects with Toyota U.S. or its American consumers or with NHTSA.

Politicians Henry Waxman, Chairman of the House Committee on Energy and Commerce, and sub-committee chairman  on Oversight Investigation,  Bart Stupak, kicked off a hearing in Washington late this morning with three specific charges against Toyota and the National Highway Traffic Safety Administration.

It was just the beginning of  a tough hearing that showed how badly Toyota is out of touch with customer concerns.

As the hearing progressed there were also other accusations about Toyota’s lack of concern for its customers and claims of ignorance on the part of Toyota’s U.S. head about Toyota’s apparently secret safety procedures.

Both Waxman and Stupak are of course running for reelection this year, as is the rest of the lower house of Congress amid voter frustration about Congressional incompetence in the face of rising unemployment and its ongoing failure to institute reforms that would make illegal the ongoing Wall Street practices that led to the collapse of the global financial markets that caused the continuing  Great Recession.

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So the hearing gives Congressmen a unique opportunity to express concern in a rare  non-partisan way that they actually care about something that the voters are concerned about – as opposed to the issues of the lobbyists who constantly court them and provide post-public-office  jobs for them.  (I realize this is a dubious assertion.)

It was in this context that Waxman and Stupak said that a “preliminary review” of the documents provided by Toyota raised three concerns.  (more…)

Toyota Facing Criminal Charges; SEC Investigation

The Japanese automaker's woes expand exponentially.

by on Feb.22, 2010

Is there a "Club Fed" in TMS head Jim Lentz's future?

Toyota Motor Corporation (TMC) filed a document with the Tokyo Stock Exchange (TSE) at the close of business today, informing the TSE that Toyota Motor Sales, U.S.A., Inc. (TMS) has received a grand jury subpoena from a United States District Court to produce documents related to unintended acceleration of Toyota vehicles and the braking system of the Prius.

TMC has also received a voluntary request (TMC is a Japanese company and beyond the reach of U.S. laws – so the request is “voluntary”), and TMS a legal subpoena (TMS is a U.S. company and therefore subject to U.S.  laws) from the Los Angeles office of the United States Securities and Exchange Commission, seeking documents related to unintended acceleration of Toyota vehicles and the company’s disclosure policies and practices.

The SEC is looking into potential securities fraud and disclosure  violation matters.

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TMC will formally inform stock exchange authorities in London and New York of these developments at 23:00 on February 22.

In a statement Toyota said, “TMC and TMS intend to cooperate with the investigations, and are currently preparing their responses thereto.”

TMS, of course, has no choice given the subpoena.

Toyota said it received the request from a federal grand jury in the Southern District of New York on February 9,  and the SEC request on February 19.

It was not immediately clear why it took so long to make the disclosures.

The grand jury request could ultimately result in criminal charges against Toyota executives.

Toyota also faces civil penalties from an ongoing investigation for its failure to recall defective vehicles by the National Highway Traffic Safety Administration.

Toyoda Reverses Position; Will Testify

The CEO and president of Toyota will be in Washington next week testifying under oath at a U.S. Congressional hearing.

by on Feb.18, 2010

"I accept.”

Akio Toyoda, the CEO of Toyota Motor Corporation has agreed to testify before the House Committee on Oversight & Government Reform only one day after refusing to do so.

“I have received Congressman Towns’ invitation to testify before the House Committee on Oversight and Government Reform on February 24 and I accept,” Toyoda said in a brief written statement this afternoon.

“I look forward to speaking directly with Congress and the American people,” Toyoda, the grandson of Toyota’s founder, Kiichiro Toyoda, concluded.   (more…)

Editorial: Toyota CEO Abandons Credibility

Akio Toyoda must risk appearing before a hostile Congress.

by on Feb.17, 2010

Toyota President and CEO Akio Toyoda apologizes for ongoing safety problems, but refuses to meet with U.S. representatives.

During his third news conference in barely two weeks, Toyota President and CEO Akio Toyoda announced today that he will not appear before a U.S. Congressional hearing, later this month, as he’d been requested to do.

Instead, the top man at the world’s largest automaker will send one of his subordinates.

“We are sending the best people,” including Yoshi Inaba, head of Toyota’s U.S. operations, claimed Toyoda, who happens to be the grandson of the founder of the world’s largest automaker. They “will amply answer the questions” Congress poses he asserted.

Is Toyoda risking violating the vision of his grandfather, one that made Toyota an industrial giant and a global force to be reckoned with, and one that humbled the Detroit Three using their own techniques?

Perhaps, and simply providing answers is not what either Toyota – or Toyoda – must do right now. The executive’s imperial decision to pass on Washington’s invitation is as wrong-headed as anything we could imagine the automaker doing  in the current environment.

And that’s on top of a running series of breathtaking mistakes that has already tarnished the company’s  image and that of its senior management team.

The irony of all this  is that Akio Toyoda took on his current post, barely a year ago, under the cloak of being a “reformer.”

In what then seemed an unusually candid admission, he warned that Toyota was making some major mistakes that threatened its long-term viability. Oh how true that statement rings and rings now…

Did Toyoda, at that time, have a premonition of what was to come, or was he simply looking at broader issues of profitability, product development, engineering,  manufacturing efficiency, overall competitiveness, to say nothing of declining quality?

If, in his mind, Toyota was in trouble at the beginning of 2009, just months after attaining its goal of becoming the world’s largest automaker, what shape is it in now?

Perhaps, if you have traveled in the Orient, you have observed the hiss-ssss  of “teeth-sucking” when such a difficult question is posed – sssssssssssss

Akio Toyoda is in our view a reluctant leader.    (more…)

Toyota Now Considering Recall of Corolla for Possible Steering Problems

CEO Toyoda Meanwhile Declines to Appear Before Congress.

by on Feb.17, 2010

Could Toyota Corolla, the world's most popular car, now face a recall due to steering issues?

The swirling safety scandal surrounding Toyota heated up still more, this morning, with the automaker announcing it will investigate whether to recall its popular Corolla model due to mounting complaints about steering problems; but the automaker’s President and CEO, Akio Toyoda has declined a request to appear before a U.S. congressional committee investigating the spate of problems facing the struggling automaker.

Complaints about the Corolla have surfaced, in recent weeks, along with allegations involving a number of other Toyota models.  The humbled Japanese giant is already involved in the recall of more than 8 million vehicles to fix two separate issues that could lead them to surge out of control – something dubbed “unintended acceleration”; another 440,000 Prius hybrids, from the 2010 model-year, are being recalled due to braking problems and Toyota is looking into allegations of similar issues with older models; hundreds of thousands of Corollas and Matrix crossovers are under U.S. government scrutiny due to reports they can stall unexpectedly.

In all, government regulators have now been told of 37 deaths allegedly linked to Toyota safety issues, a number that could still grow, especially as plaintiff attorneys begin to prepare actions against the manufacturer and surreptitiously file NHTSA complaints, which will take months to verify, if they are ever verified. Toyota  in 2008 became the world’s largest carmaker.

CEO Akio Toyoda, grandson of Toyota’s founder, was one of numerous company executives asked to testify before Congress during hearings later this month, but the executive demurred, stating, “”We are sending the best people to the hearing, and I hope to back up the efforts from headquarters,” during a news conference in Tokyo, on Wednesday morning.


Toyota President Akio Toyoda Apologizes For Recalls – Even As More Problems Surface

Still no decision on how to handle Prius brake defects.

by on Feb.05, 2010

How do you say "mea culpa" in Japanese? Toyota President and CEO Akio Toyoda apologized for the company's ongoing safety problems.

The yen stops here, according to Akio Toyoda, the president and CEO of Toyota Motor Co., and heir to the carmaker’s founding family today apologizing for the company’s safety problems.

“Many customers are wondering whether their cars are OK,” the chief executive acknowledged, saying “I offer my apologies for the worries.”

Speaking in a mix of Japanese and English, the executive tried to put a concerned face on the company’s mounting problems, which have led to the recall of about 10 million vehicles since last October, and which are being linked to a variety of new issues including what Toyota now admits was a defect in the braking system of its most visible offering, the hybrid Prius sedan.

“Please believe me. We always put customers first,” Toyoda said, turning to English, during a hastily staged news conference.

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The chief executive of the world’s largest automaker said, meanwhile, that Toyota has not yet decided how to handle problems with the Prius.  After repeatedly downplaying owner reports of problems, the maker yesterday confirmed that it had uncovered a defect that can cause brakes on the hybrid to release for a second.  Toyota has made changes meant to prevent the problem on vehicles it has been building since sometime in January, but it has so far declined to order a recall of 270,000 2010 Prius sedans already sold.  Meanwhile, the automaker is looking to see if a similar problem plagues the dedicated Lexus hybrid, the HS250h, which the upscale brand introduced last year.