Posted by: David Welch on February 18, 2010
Toyota Motor Corp. President Akio Toyoda has snubbed Congress. He politely declined to come and testify at the Feb. 24 hearings during which the House Oversight and Government Reform Committee will look into the automaker’s string of recalls, Bloomberg reported. That has Washington lawmakers scolding the 53-year-old Toyota president, who is also the grandson of the company founder. Rep. Darrell Issa (R-Calif.) already expressed his disappointment.
I’ll go out on a limb and say I can’t blame him. It’s actually the right move. These hearings often become vaudeville acts for politicians to make a name for themselves. Either way, Toyota will lose on this one. Mr. Toyoda declined, and he is taking heat. If he agreed to go, he would still take heat and it could be worse. If the Toyoda family scion shows up, the spotlight will be even more intense. He may be questioned about why the company didn’t act sooner, but my hunch is that some members of Congress will be more interested in making an example of a top executive—and Toyoda family heir—than getting information.
In his place at least one hearing will be Yoshimi Inaba, the Japanese President of Toyota Motor North America. From what I have gathered, Inaba is the best guy the company has to handle the task. He knows the U.S. operations deeply and should be able to offer up some real answers, to the extent that Congress wants them. Inaba is Japanese, but he has spent 40 years working for Toyota in a variety of global markets. He has had top jobs in the U.S. and Europe. He got his MBA at Northwestern University’s Kellogg School of Management and his English is fluent, according to one retired Toyota executive who spent years working with him. Inaba has been in plenty of sales jobs and he is known for being very personable. In other words, he has the tools for the task.
Perhaps Toyoda would as well. But we know what can happen when the wrong executive goes before an angry Congressional committee. If Mr. Toyoda showed up before Congress, the company risks a public beating for the top executive. When Ford Explorers were rolling over on their faulty Firestone tires, it was CEO Jacques Nasser—not Chairman and Ford family scion William C. Ford Jr.—who went to Washington. Nasser knew the business better. This looks to be a similar case. The spotlight will be on Inaba, and he is probably better suited to handle this kind of maelstrom than his boss. At the least, his name isn’t on the building. That alone should defuse some of the theatrics.