Degrees of Losing: Toyota's Trouble in Washington

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.

Reader Comments

TheTruth

February 24, 2010 12:21 PM

The truth is that the media and congress are taking advantage of this mistake by raking Toyota over the coals to reduce its competitive advantage and bolster the sagging US automotive industry. That's business in the big leagues. A quick look at the history of automotive recalls shows that the Toyota defect is neither the largest, nor the most dangerous. But it is the most reported and most scrutinized since Ralph Nader used the Corvair to demolish Chevy, or Ford Pinto's were bursting into flames on American highways. My advice - go buy a Toyota now - you'll get a great deal :)

Vikas Raina

February 24, 2010 12:43 PM

Feeling sorry doesn't explains why on the first hand it took so long for Toyota to respond the complaint.

All the information shared by Toyota is all about fixing the problem. No one knows what will they do the prevent these types of problem.

In this competitive world its seems that "Toyota’s priority has traditionally been the following: First; Safety, Second; Quality, and Third;Volume "

has been reversed

1. Volume
2. Quality
3. Safety

May be need a fix for that as well.

Rich

February 24, 2010 1:06 PM

I'm a Toyota loyalist and I'll buy another Toyota when they get their quality problems corrected - but not until then.

john

February 24, 2010 4:01 PM

God I'm just sick of these idiot politicians that protect corporate interests and sit there to lecture people.

Tom

February 24, 2010 4:10 PM

This is not some recent hiccup by an otherwise flawless company. Let's go back to the launce of the Tundra. The plant in San Antonio ran $500 million over budget. The Tundra did not earn a 5-star crash rating like all the other full-size pickups. It had the highest base price and the worst gas mileage, not to mention blown engines early on and then collapsible tailgates. The previous generation Tundras had frame rust problems as well. And all this was accomplished with Toyota's best and brightest. Just one example of the merely mortal Toyota.

DC

February 24, 2010 4:46 PM

Did Toyota make mistakes and fall short? Yes, but this is mainly a political witch hunt from the government to bolster the US automakers and destroy a top notch quality Japanese Automaker. GM, Ford, and Chrysler don't even compare to the safety and quality of Toyota. Toyota will make the adjustments and will come out better and stronger than before.

Asela

February 24, 2010 4:50 PM

Most Japanese companies including Honda operate this way with real power centered in Japan. They put an American as the public face of the company, but there is a little Japanese guy in virtually department at these Japanese companies who sits behind the scenes. Watching. If any American employee shows a little too much independence or rocks the boat, a quiet word message is sent to headquarters in Japan and “ whoosh ” and that person is got rid of. Kind of like those Alien films where the Aliens get the humans to do their bidding. A bit creepy. Which is why GM and Ford have a huge advantage. While they have made mistakes, they are the car companies (other than the Europeans) who made real innovations. The Japanese are good at continuous improvements but very rarely are they good at real innovation. Toyota tried real innovation, but they have failed. They are restricted by the nature of their insular culture. As a die-hard Honda fan, I for one am rooting for GM and Ford. The Japanese have proved themselves to be too idiotic and the arrogance of Toyota (Honda too) like that of GM and Ford before that, must be brought down a few notches.

Gimme a BREAK

February 24, 2010 5:05 PM

Toyota will 'solve' this problem by shoveling more money to BOTH Parties + CA and TX = problem SOLVED! Personally, altho delighted with our 2 Toyotas, they will eventually be REPLACED by Subaru, Hyundai (Big surprise to me, but a REAL ALTERNATIVE), maybe Honda, or BMW. This 'problem' with loose morals, and chasing the Almighty Dollar, will NOT be resolved for 2-3 years! Toyota IS TAKING a bigger, and BIGGER hit.....just takes 1 or 2 more reports, or another issue, and NO amount of CAMPAIGN FINANCING will buy back Toyota's FORMERLY stellar reputation.

Edo

February 24, 2010 6:47 PM

There is no car for crazy like many Americans to drive in the world anyway. Many Americans don't know how to drive safely.
Beside, American cars have been the worst in quality for a long long time and have not caught up the foreign competitors as of now. I won't buy any American cars in future for any reason.

Scott

February 24, 2010 8:11 PM

Congress' involvement in the Toyota interrogation is comical. The line of questioning that they presented at today's meeting was worthy of a 5th grade after school debate club. If American can't see how the government is trying to bolster the American auto manufacturers, we are pathetic! I come from the auto industry and I assure you that GM, Ford, and Chrysler don't even come close to matching Toyota and Honda's quality and safety standards. This is an unfortunate string of events that will be corrected and I will absolutely buy another Toyota. To the person who said the Japanese do not provide innovation, have you ever heard of Lexus? #1 car in America according to Consumer Report, with a laundry list of innovations that your beloved Hyundai and Kia steal day in and day out. Hyundai and Kia are monsters when it comes to the way they treat the supply base, which will forever keep them behind Toyota and Honda.

dave

February 24, 2010 8:25 PM

I'm too patriotic to even consider buying a Toyota but I do find it annoying to see these idiot politicians grilling this guy. It reminds me of the time they brought those baseball to DC and gave them a hard time.
I live in and work in DC and at least 80% of the cars parked down around the Capital, White House, etc are foreign. Most of these clowns probably drive a foreign car.

Gerald Wittkop

February 24, 2010 8:34 PM

I own a 2007 Toyota Solaro coupe and I am asking if Toyota will reimburse me for the overnight deprecation that has happened to my vehicle since these recalls. It hurts in the pocketbook when I try to sell or trade it.God, how I want to unload this cracker!

siphandone

February 24, 2010 8:51 PM

I have 3 Toyotas in our house. Just drive as usual.... No complaint.....

Strategery

February 24, 2010 9:25 PM

I'm not a Toyota fan, but I buy the protectionist conspiracy theory. Also, I'm impressed at how the Japanese executives take their work personally. If this was a US company the CEO would simply bail, with a golden parachute.

CKN

February 25, 2010 3:00 AM

Toyota is going through the same cycle that all top manufacturers (read: GM, Ford, VW) have gone through at the top. It is not safe to sit at the top of the pyramid. You are under the watchful eyes of everyone and every mistake is a blunder. GM must be much relieved to be not in the place that Toyota is today. GM and Ford are quietly getting their house in order as more disciplined companies. Toyota did the same over the decades too. I am sure Toyota will make a come back after this quality fiasco, but their reputation has been dented forever and also to a certain extent their arrogance. Asela's comment about the Japanese companies is true to a certain extent, but it is also true that both the American & European companies have learnt their lessons from similar mistakes, when at the top. Also let's be fair to the Congress, no other country would subject any company foreign or domestic to the amount of strict quality and safety standards that are there in the US. That is the reason that the US is still THE Market that all car manufacturers would love to be at the top and certified for the quality standards. If a brand has a good safety rating in the US, then it would do well worldwide. Let the Congress do its job.

Frank

February 25, 2010 3:02 AM

Since I started the process of buying my first buy, so may people around me suggested me to buy Japanese car. More my attention on the cars, I feel more not right with them. I had to ask myself why I feel an opposite way with so many people? I got the answer later. Because Japanese cars do not put human's life as first priority, in stead, they put materiel as the their first priority, working hard to saving materiel. Human's life is safety and beyond. Yes, safety is bace of human life. I have never ever bought Japanese Car. Because I can feel that the spirit behind the car and companies does not respect human life.

ITS NOT FAIR

February 25, 2010 8:09 AM

As per Asela's comments - SPOT ON. The Koreans are the same. No matter wherever in the world they operate the final decision-maker will always be "one of theirs".
This culture lets them down as innovation is put aside for sake of hierarchial tolerance. Isn't that why the Japanese have been looking at American products & lifestyle for so many years? They know their countries are too conservative for risk-taking. They are known to infuse techniques rather than give birth to new ideas. Shame on the Toyota's senior management to take so long on recalling cars and they should be grilled right as hell to fix their problems.

Ballbuster

February 25, 2010 8:48 AM

Before Toyoda's ascension to CEO Toyota, Watanabe ran Toyota for more than a decade ushering in various manufacturing plants, forming partnerships with other auto companies, and expanding Toyota's models. As Toyota began to flex its "Dai Iche" status and pieces of gold and silver fell like rain upon Toyota City, their CEOs grew increasingly greedy and arrogant. The heart of men has always been easily corrupted. During the past decade, Toyota's CEO thought they had reached the apex of success, capable of doing no wrong. But they were all of them deceived -- by their own hubris. Last year before the massive recalls, Mr. Toyoda was quoted as saying Toyota is grasping for salvation, a term synthesized from a writing by business guru Collins. As for Mr. Toyoda and Watanabe it time for much self reflection and repentance as both prepare for a national apology before the Emperor.

Chris

February 25, 2010 12:43 PM

Shocking! What Lentz admitted is exactly what I have said countless times. Toyota (and Honda, Hyandai, etc.) are no more of an "American" company than Ford is a Chinese company. At Toyota, every decision is made in Japan - R&D, engineering, design, development, safety, etc. Over the past 30 years they have convinced the American public that they care about the American car-buying public by building a few plants here and sponsoring a few county fairs. The only interest Toyota has in America is that the profits keep flowing across the Pacific. And when safety (or recent quality) issues crop up here, they have done everything in their power to keep it quiet and protect their precious (and mostly undeserved) reputation of caring about their American customers first. It is about time they were exposed and time for Americans to buy from AMERICAN companies whose primary interest is to profit and subsequently reinvest IN THIS COUNTRY!

jambo

February 25, 2010 3:42 PM

Toyo got what it wanted, to be as big, or bigger than GM. Be careful what u wish for.

Of course import car companies only pretend to care about the community. It's business and profit, everyone understands that. Having said that, I will buy Honda and Subie. GM and Chrysler? U gotta be kidding. Didn't I give them my money already in a bail out?

Dave

February 26, 2010 11:26 AM

This is nothing but a Witch Hunt! One of the earlier comments stated that GM(government motors) and Ford were the real inovators. That is probably why Ford bought TOYOTA'S hybrid drive to put in their vehicles, Escape, Fusion!
They have no idea what inovation is. They also use more foreign parts than any car Toyota makes in the USA! Wake up and smell the roses!!!!!!

Clyde

March 3, 2010 10:44 PM

I agree, go buy a Toyota now, you will never regret it. With Government Motors still in a downward spiral and their only hope of pulling out of it, is the brief window of opportunity that has been presented

Alissa

March 4, 2010 3:48 PM

For all you guys who don't know about the whole idea behind lean manufacturing, and who think this is a witch hunt, get your little foil hats on bcause they are getting in your head. In fact, say that to a family member of someone who was killed or injured as a result of this. Obviously, Toyota should have done a countermeasure at the first failure...but getting costs down at the expense of quality is the way of life in a Kaizen operation. It isn't continued improvement for quality...it is continued improvement at gettnig costs down and making stuff faster with fewer people. So get used to it, as it has infested US corporations. Nobody is saying it hasn't happened elsewhere ...just that it was just a matter of time before the whole feel good concept behind the Toyota model would hit a snag. That snag is called greed.

ERIK

March 4, 2010 4:09 PM

I love it keep bashing TOYOTA. i want the media and the government to keep up the circus. i want the stock of TOYOTA to DROP real low so I can buy about 6-7 thousand dollars of it. because in a year or two everyone will know that its DRIVER ERROR(NO STUPIDITY)that caused the accidents and not the vehicles.And when people realize that the will keep buying toyotas because they are the best thing out there, car wise. And the stock will be threw the roof and ill be RICH.

Paul630

March 16, 2010 12:57 PM

Ever since I learned how to drive, I salute to Toyota because of the comfort and quality of their cars. I can say that I am loyal to Toyota but if they cannot maintain the quality of the cars they produce, better yet I have to consider other brands.

wolf

March 24, 2010 7:58 PM

is it just me or did every1 not realize all the improvements gm and ford have done int he last couple model years?? toyota hasnt changed much in i dont even know how long whereas for and gm have constantly changed with styles and quality. i am in the market for a new car right now and i sat in a new camaro and when i test drove it i was wickedly impressed with the comfort of it and the feel of the environment the car gives you...i also test drove a few toyota models and was like BLECH because though they are just as comfortable as the camaro the overall feel didnt impress me but that may be because camaro is a sport car and toyota aint but then look at everything the new ford taurus sho has on it compared to a camry as far as i know camry's dont got the thing that helps keep you from rear ending people when you aint payin attention lol if toyota cared about anything besides money they would lower their prices to be more affordable like their korean counterparts at kia/hyundai who are on the fast track to being great companies

wolf

March 24, 2010 7:58 PM

is it just me or did every1 not realize all the improvements gm and ford have done int he last couple model years?? toyota hasnt changed much in i dont even know how long whereas for and gm have constantly changed with styles and quality. i am in the market for a new car right now and i sat in a new camaro and when i test drove it i was wickedly impressed with the comfort of it and the feel of the environment the car gives you...i also test drove a few toyota models and was like BLECH because though they are just as comfortable as the camaro the overall feel didnt impress me but that may be because camaro is a sport car and toyota aint but then look at everything the new ford taurus sho has on it compared to a camry as far as i know camry's dont got the thing that helps keep you from rear ending people when you aint payin attention lol if toyota cared about anything besides money they would lower their prices to be more affordable like their korean counterparts at kia/hyundai who are on the fast track to being great companies

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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