After Toyota Motor Sales USA president Jim Lentz faced the US House of Representatives Committee on Energy and Commerce hearing on Tuesday, all eyes yesterday were on his boss, Toyota Motor Corporation president Akio Toyoda, as he appeared before the House Committee on Oversight and Government Reform.
He did not look a happy man, as his minders shepherded him through a sea of photographers on arrival on Capitol Hill and, later, in the glare of TV camera lights and hostile US lawmakers during what must have been a gruelling three hours of questioning.
Go deeper with GlobalData
The US media view was that Toyoda’s long-awaited testimony before the US Congress left critical questions on the safety of Toyota vehicles unanswered, though general opinion was that the 53-year-old grandson of the automaker’s founder was still the automaker’s last, if fading, hope to ride out the unprecedented crisis.
”I spoke with sincerity but I’m not really confident that (my words) reached out widely,” Toyoda admitted to Japanese news agency Kyodo after Wednesday’s congressional hearing in Washington. ”But someday I think all Americans will understand.”
”It’s (equally) a very embarrassing day for Toyota,” Florida Republican John Mica said, waving an internal document claiming that the automaker saved more than US$100m in costs through implementing only a limited recall in 2007.
Company executives reiterated that the automaker’s electronic throttle-control system – introduced in the US from 2002 – is not responsible for the sudden acceleration of Toyota and Lexus vehicles, citing rigorous testing in the hope of quelling strong suspicions about a possible electronic defect.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataBut their claims were questioned as Lentz was pressed to admit that the automaker would ”never rule out anything that could cause sudden, unintended acceleration.”
Some US lawmakers demanded a ”yes or no” answer from Toyoda as the reticent chief executive spoke in circles using ambiguous phrases, which were even harder to understand through his interpreter, Kyodo noted.
”I don’t believe I have heard a good answer today…or a complete answer as to why it took your company so long to respond to these complaints” on problems with Toyota vehicles, Tennessee Republican John Duncan said.
Toyoda also stressed new measures to ensure quality control, including assigning more freedom in making local decisions on implementing recalls, an authority that was previously granted only to the head office in Japan.
”They have been quite decisive in crafting preventative measures,” Ryoichi Shinozaki, director of Tokyo-based Kyodo Public Relations, and a crisis management expert said. ”But they have no solution for the risks that exist today.”
Shigeru Matsumura, an auto analyst at the SMBC Friend Research Centre, added that while the new steps should help to recover consumer confidence, the costs – for example, of setting up a special committee for global quality – are likely to weigh on the automaker’s productivity and competitiveness.
During the long hearing, Toyoda remained calm and the general atmosphere was civil with many US lawmakers admitting that they own and like Toyota cars.
Geoff Davis, a Republican from Kentucky, home to Toyota’s first US manufacturing plant, warned against ”the temptation to engage in political theatre,” apparently referring to upcoming mid-term elections in November.
But after the testimony, Toyoda’s posture crumbled in front of a standing ovation from his supporters – many US Toyota dealers and plant workers had travelled to Washington for the hearings – as he choked on his words midway through saying, ”You and your colleagues, across America and around the world, were there with me.”
Crisis management expert Shinozaki said it was unwise for Toyoda, who was visibly emotional, to become tearful, which he said casts ”strong doubt on the leadership” of the top executive.
Kyodo said Toyota’s options for riding out the crisis are quickly running out with many experts admitting that Toyoda, known as the ”prince” at home, still has the power to hold together the gigantic automaker under the founding family brand.
”It needs the Toyoda name to shrink its expansion-oriented policy,” SMBC’s Matsumura said. ”The recalls emerged while the company was preparing to carry out restructuring under Toyoda, which would not have been possible with a salaried president.”
On the question of how Toyota would recover, industry observers are pointing to Ford which looked to the great-grandson of the company’s founder to rebuild a reputation tarnished in the early 2000s by a recall to replace Firestone tyres fitted mostly to its popular Explorer SUV.
Toyoda has often said he had no choice in being born into the founding family and is known for being media-shy, which has sparked criticism that he remained out of sight during most of the safety crisis leading to recalls of over 8m vehicles worldwide.
Change is on the way, he promised.
”My name is on every car,” Toyoda said at the start of Wednesday’s hearing. ”You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers.”
”And I believe I am the only person who can display the leadership to transform Toyota,” he added.
