Posted by: David Welch on February 24, 2010
In the black comedy “The War of the Roses,” the divorce attorney played by Danny DeVito advises his client, played by Michael Douglas, that, “There is no winning! Only degrees of losing!” That brings me to the Congressional hearings over Toyota’s sudden acceleration issues and recalls.
Yesterday it was James Lentz, the president and COO of Toyota Motor Sales USA, who took the stand for his grilling from Congress. He certainly affirmed some things that make Toyota look bad. He admitted that the company didn’t do a good job of collecting customer complaints from its various global operations. He said that Toyota’s U.S. executives can’t order a recall without say-so from management in Japan. That slows the process. And he said that, while Toyota doesn’t believe that electronics or software are responsible for the sudden acceleration incidents, he couldn’t say for certain that the fixes to floor mats and accelerator pedals will keep accidents from happening again.
None of those admissions are revelations. They have been reported in the past or discussed by the company. But these hearings aren’t about revelations. They are about forcing Toyota to publicly affirm that the company made mistakes. And it’s about members of Congress showing that they side with the little guy, whose votes they covet. To show how silly these hearings can get, at one point a member of Congress asked Lentz which executive oversees Toyota’s Washington office, which handles safety and compliance issues. Turns out it’s not Lentz. He’s a sales guy. It’s Yoshimi Inaba, the president and COO of Toyota Motor North America. The Congresswoman then asked him why he was testifying. He responded simply that he was asked to be there. In other words, Congress invited the wrong guy.
But so long as Lentz was there, he got his beating. Rep. Edward Markey (D-Mass.) was particularly tough on him. When Lentz admitted that, “We didn’t do a very good job of sharing information across the globe,” Markey responded saying, “That’s just unacceptable.” He also took Lentz to task on the fact that the company says it has no reason to believe that electronics or software are the problems causing some of Toyota’s cars to suddenly take off. It’s either the floor mat or an accelerator pedal, Toyota believes. But Markey pushed on. He demanded to know why Toyota was installing a software fix that would override the accelerator if both the brakes and accelerator are being pushed. Fair question. But in this arena, it was also a rhetorical one.
I’m not letting Toyota off the hook. Far from it. Clearly there are serious problems. Edmunds.com mined the government’s database and found that Toyota has more sudden acceleration complaints than any carmaker. As I pointed out in this story in 2007, the company’s growth has led to many of its problems. Today, Toyota Motor Corp. President Akio Toyoda is expected to say in a prepared statement that, “I would like to point out here that Toyota’s priority has traditionally been the following: First; Safety, Second; Quality, and Third; Volume. These priorities became confused, and we were not able to stop, think, and make improvements as much as we were able to before.”
That admission may be the most significant thing to come from these hearings. Since Congress will not find the end-all cause for the recall problems, Akio’s statement would declare from the very top that Toyota is just like any car company. It sought growth and profits and lost its focus on quality. If the top executive says that today, as the company says he will, that will be the company’s biggest loss. The grandson of the company’s founder will fuel the new belief that his company is no longer the special one. Even Toyota loyalists will get that message.