Asia-Pacific
Toyota's future still uncertain after CEO testified
(Xinhua)
Updated: 2010-02-25 14:15
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TOKYO: Toyota Motor Corp. President Akio Toyoda appeared before US Congress on Wednesday to apologize about the defects in his company's vehicles that have led to the recall of millions of cars, and to explain what the company will do in the future to prevent problems from becoming crises.
 Akio Toyoda (L), President and CEO of Toyota Motor Corporation, with Yoshimi Inaba (R), President and COO of Toyota Motor North America, testifies on Toyota's car safety recalls in front of the House Committee on Oversight and Government Reform on Capitol Hill in Washington Feb. 24, 2010. [Agencies] |
Despite Toyoda's apologies, however, his company is far from out of trouble, and some members of congress seemed dissatisfied with the explanations given by the automaker's president for his company's actions over the last few months.
At issue are a fault in some Toyota vehicles that causes the brakes to respond too slowly in certain conditions, and a different defect in other models that lead the accelerator to jam.
GROWING PAINS
"I fear the pace at which we have grown may have been too quick, " Toyoda said. "I regret that this has resulted in the safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced."
Despite the apology, however, The Christian Science Monitor sees Toyoda's remarks as symptomatic of outage, which has already seen excessive expansion lead to devastating consequences in the financial sector, which two years ago was the trigger for the credit crisis and global economic downturn.
"Whether it is sticky accelerators or risky loans, business leaders need to focus on more than just profits," the editorial wrote.
The Philadelphia Inquirer said "it will take more than talk to restore consumer confidence in their cars."
To this end, Toyota is running massive advertising campaigns in an effort to win back public trust, but the jury is out on whether this will work. Due to the blanket media coverage the recall has received, the financial consequences of the recall will likely come out in sales figures over the next few months, while the damage to Toyota's reputation for producing high-quality, safe cars, is likely to be irreparable.
INDECISIVE
In the buildup to the Congress appearance, Toyoda, and his company, had come under fire for seeming indecisiveness and looking to make profit from withholding information on defects.
Toyoda had initially said he would not appear in Congress and believed that US head of operations Yoshi Inaba would be a better person to speak for the company. Amid mounting pressure from US lawmakers and media, however, Toyoda reversed that decision.
It also emerged that "100 million dollar memo" had been sent to lawmakers in recent days. In that, Toyota apparently stated that it would be able to save $100 million by securing a 2007 recall of vehicles with faulty floor mats.
It was "one of the most embarrassing documents I have ever seen, " said Rep. John Mica, a Florida Republican.
Rep. Elijah Cummings, a Democrat from Maryland added, "It seems that time after time you say that there are problems that are being addressed, and over and over again they are not being addressed."
Inaba said that that document was "inconsistent with the values of Toyota."
In Japan, The Yomiuri Shimbun newspaper also condemned Toyoda and his company's behavior, pointing out that its back-pedalling and hesitancy are likely to have done lasting damage. "The growing anger against Toyota can be partly attributed to the automaker's delay in responding to the rush of complaints about suspected flaws in its vehicles," it said in an editorial.
"If Toyoda could have learned any lesson from his company's failure in this respect, he should have indicated his desire to attend the hearing before the committee had to officially request his presence," it said.
The safety of the cars is now set to be investigated in Japan. And on Thursday, Prime Minister Yukio Hatoyama said he would like to see the company take measures to improve its safety record. "I expect the company to pay full attention to safety as it concerns people's lives. It needs to maintain a policy of continuing to improve."
The prime minister added, however, that he did not think that the hearings were the end of the safety crisis for the automaker.
QUESTIONS REMAIN
Critics agree, pointing to questions that were left unanswered in Toyoda's appearance in Congress.
Toyoda answered that his company "would like to extend its full cooperation," leading Bradley to question whether he had received a 100 percent yes from the president.
After the hearing, Toyoda attended a meeting of Toyota employees where, holding back tears, he expressed gratitude for their loyalty.
"At the hearing, I was not alone," the president said to a sympathetic audience. "You and your colleagues across America and across the world were with me. Words cannot express my gratitude. We at Toyota are at a crossroads. We need to rethink everything about our operation."
While Toyoda may be able to count on the loyalty of his employees, in the coming months the corporate world as a whole will learn lessons about the loyalty of consumers in the face of a company crisis.
