As Toyota Woes Mount, Where is Akio Toyoda?

Posted by: Ian Rowley on January 28, 2010

When Toyota said Akio Toyoda, 53, would take over from Katsuaki Watanabe as the company’s President and CEO in December 2008, it hoped workers, especially those in Japan, would rally around its new leader and reinvigorate the company. After all, it needed help, posting a first loss in six decades in May 2009 and Akio, the grandson of company founder Kiichiro Toyoda, has Toyota DNA running through his veins.

A little over year on, worries over safety and faulty accelerators are dwarfing the specter of more losses. Indeed, the crisis may have started in the U.S. but the problems are now worrying enough for talking heads in Tokyo to be questioning whether Toyota’s woes will hurt Japan’s Inc. hard-earned reputation for making good quality, reliable products.

But what about CEO’s role as the public face of the company? Since succeeding Watanabe in June, Toyoda’s public appearances have been relatively few and usually in controlled situations, such as a speech at the Tokyo Motor Show where he read prepared comments. In fairness, other speeches, such as one shortly after he assumed the mantle of Toyota chief and another at the National Press Club in Tokyo in October, were followed by question and answers sessions, but Toyota has repeatedly turned down requests for interviews with its CEO from Japanese and foreign media. Toyota also opted not to hold its usual end of year press conference in Nagoya in December. That event had been fronted by Watanabe in recent years.

Does it matter? Well, in his defense, Toyoda’s handlers say he prefers to focus fixing the company rather than talking about it to reporters. Meanwhile, as Tatsuo Yoshida, an analyst at UBS in Tokyo points out, when General Motors and Ford undertook large recalls in recent years, their CEOs didn’t see fit to apologize publicly. And Toyoda expressed condolences to those hurt in incidents involving Toyota cars in the October National Press Club speech and promised the company would make better cars.

Still, surely it couldn’t hurt to be more visible. For one thing, despite the recall problems, Toyota has made progress under its new CEO and may yet post a full-year profit this year one year ahead of schedule. The median estimate of 22 analysts that cover Toyota suggests it may tiptoe into the black for the year ending March 2010, although many may now make downward revisions. Under Toyoda’s guidance the company appears to listening to those that said it needs more fun-to-drive models. For instance, it is promising a new reasonably priced sports car based on the FT-86 concept model shown at the Tokyo Motor Show last year.

What’s more, top executives at Toyota’s main rivals do a pretty good job in the limelight. Honda CEO Takanobu Ito seems as comfortable in the spotlight as when chatting to engineers. And Nissan CEO Carlos Ghosn, long regarded as a charismatic leader, has emerged as the driving force behind the Yokohama-based automakers push for electric vehicle in recent months. When asked by Bloomberg News about the recalls, Irv Miller, U.S. group vice president for corporate communications, said he didn’t know whether the decision to halt production was made by Akio Toyoda. “He is certainly aware of the issue,” Miller said.

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Reader Comments

C. H. Ng

January 28, 2010 07:52 AM

Luckily (sorry to say it out) this happens to Toyota cars. If it's a Chinese made cars, alot of nasty & sarcastic remarks will start surface & posted by western medias.

Nevertheless Toyota shows great responsibility by recalling millions of cars & suspending sales (in USA) while they try to fix the problems. But I wonder what about those sold in other countries. No problem? No need to recall?

C. H. Ng

January 28, 2010 07:55 AM

Luckily (sorry to say it out) this happens to Toyota cars. If it's a Chinese made cars, alot of nasty & sarcastic remarks will start surface & posted by western medias.

Nevertheless Toyota shows great responsibility by recalling millions of cars & suspending sales (in USA) while they try to fix the problems. But I wonder what about those sold in other countries. No problem? No need to recall?

Cynthia

January 28, 2010 09:11 AM

Car accidents are frightening and sometimes compensation based on insurance can be complex and confusing, especially when considerable damage and injury have occurred. This site offers a lot of good information, especially given the ongoing Toyota recalls making the news recently over defective pedals: http://www.injured-in-new-york.com/caraccidents.php

John M. Switlik

January 28, 2010 09:14 AM

If this is a drive-by-wire issue, then it will be a systemic problem for the whole industry. Not unresolvable, though.

But, we need to learn this now and make corrections.

China thinking that it can exploit the situation would be not unlike the incidences of 'doctoring' products to the harm of the consumer.

The mania of texting while driving is indicative of deep problems with the psyche, folks. This little problem of Toyota may very well be indicative of hubris brought on by successful (supposedly) manipulation of matter.

Again, it's not just Toyota's problem.

http://7-oops-7.blogspot.com/2010/01/drive-by-wire.html

Karl

January 28, 2010 11:22 AM

Akio is probably 'Googling' this- SLUDGE POEM, and reading it. Then he's probably 'Googling' this- SLUDGE POEM 2, and read that one. And we all know that "SLUDGE POEM 3" is about Akio Toyoda, right? Simply 'Google' this- STEAK DINNER POEM, & I believe it appears with that poem. Thank You.

Toy_Land

January 28, 2010 11:33 AM

I wonder if this will increase the amount of depreciation of Toyota's? At least until they get this mess straighten out.

Karl

January 28, 2010 11:47 AM

Anyone can 'Google' this- STEAK DINNER POEM, and find a poem that was written about Toyota's President, Akio Toyoda. It's entitled- "SLUDGE POEM 3". Thank You.

Barbara Grupka

January 28, 2010 12:17 PM

To: Ian Rowley

I'm glad to read your article and see it is not one-sided. Thank you. I work for Toyota in Georgetown, Kentucky. I am seeing WAAAAY too much negativity on this whole issue coming to light. Toyota is shutting down plants to let people know how committed they are to safety- not to scare the bjeesis out of them. Does anyone have the actual facts about how many pedal failures there have been? How about how many gas tanks exploded in the Ford Pintos years ago? And that was an actual COVER-UP. How about how many Ford Explorers turned over due to faulty tires? And now Ford is suspending assembly of vans in China for - guess what!- the same pedal vendor! (This comment did not start out as a Ford bashing but as I read what I am typing that is what seems to have materialized- sorry). The reason I am commenting is I just happened to be watching Bloomberg on T.V. and the report was saying it may be ending Toyota's stellar reputation, faulty accelorator on cars, etc. How many of these accelorators have actually been faulty? Yes, Toyota press has botched this situation badly in my opinion, but the quality is still there. I drive a Camry, my husband and daughter each have Corollas, my son a Prius, and my husband and I have a 2000 Tundra. I feel safe enough to drive my most prized two year old grandaughter in any of them! I am asking Bloomberg to PLEASE try to get some actual numbers so consumers don't get a one-sided view from vultures. Thank you for reading my comments.

PakMan

January 28, 2010 02:12 PM

A more important question is where is Vivek Wadha in all this? I am surprised he is not presenting Indian innovation, outsourcing and manufacturing to Toyota to cure all their ills. Maybe Toyota needs to create an innovation and manufacturing "Cluster" in India. What a India marketing opportunity!!!

Old Timer

January 28, 2010 05:36 PM

"Still, surely it couldn’t hurt to be more visible."

Would you rather have a CEO who takes responsibility for his actions and fixes the problems?

Or, would you rather have a CEO who stands in the limelight and says things that are politically correct; giving you a warm and fuzzy feel?

It takes courage, humility and character to take responsibility for things that have gone wrong.

@C. H. Ng

January 28, 2010 09:03 PM

So true! Toyota has been using problematic components that are MADE IN USA. Notice here that you don't see the American media blame the poor quality of American made products for the failure of Toyota. Just contrast the American media coverage of Mattel's scandal. The American journalists all focus on poor Chinese quality as if Mattel is not responsibile for the ultimate quality control and the poor design of their products.

C. H. Ng

January 29, 2010 02:54 AM

The problems faced by Toyota truly reflects a biased report by BW reporter and other western medias. As I mentioned earlier in my comment, if the vehicles and/or the faulty components are to be of Chinese made, many sarcastic reports & comments will be start surfacing around the world.

Though I have nothing against Toyota (in fact before the news broke out, my first choice happened to be a Camry if I will to change my car), thank God it's not a Chinese made product again to be in the news for the wrong reason. And thank God too the pedals which are at fault, come not from the Chinese supplier but were outsourced from a Canadian plant. This time there is no opportunity for western medias to simply trumpet loudly faulty China made products.

Newbie

January 29, 2010 08:55 AM

Dear C.H.Ng,

Some of the cars recalled were indeed made in Toyota's China plant. I suspect this whole episode is getting so much press coverage simply because Toyota was considered the last bastion of quality products. Even that failed now. Japanese products now a days are not so high quality. South Koreans are catching up.

P Hanley

January 29, 2010 11:48 AM

In reference to B. Grupka's comments: Most auto recalls are based on very low incidents of failure. The risk is that any one of the millions of cars with this same accelerator could fail. The results, presumably, are accidents and potential for death. Toyota's extreme actions of stopping production indicate the serious nature of failure, albeit rare.

Brock O'Bomb-a

January 29, 2010 05:55 PM

MY GOODNESS GRACIOUS!!! Someone wrote a poem about me! I think it's the same person who wrote "SLUDGE POEM 3", which is a poem about Toyota's President. Anyone can 'Google' this- BROCK O'BOMB-A POEM, and read the poem about me, right? And anyone can 'Google' this- MASSACHUSETTS ERECTION POEM, and read "SLUDGE POEM 3", correct? Thank You.

C. H. Ng

January 31, 2010 09:04 PM

@Newbie

It's not that I am on a vengeful path.
I am just highlighting the fact western medias like to pick on every fault found on China made products as if all other countries' mades are totally perfect. This is biased reporting.

The pedals are made by CTS, an Ind.-based company, with plants in Canada, Taiwan, Mexico, Czech Republic, China & Scotland. Though you said some of the cars recalled were made in Toyota's China plant, it was reported the pedals which are in fault came from CTS's plant in Mississauga, Ontario, Canada. But I am not going to argue with you or totally blame Toyota or CTS. What I am going to say is that nobody is perfect. So when China or anybody is at fault, please do make bias reporting.

There is a saying in Chinese, which is literally translated as such...."Make too many things, mistakes many; make less things; mistakes less; make nothing, no mistake"

C. H. Ng

January 31, 2010 10:45 PM

Correction to my mistakes made on my earlier comment.

"So when China or anybody is at fault, please do make bias reporting" should read as "So when the products made by China or any other country are at fault, please don't make or try to highlight any unnecessary bias reporting".

NB: I am directing this to the medias, not to you (Newbie).

P. Sederberg

February 1, 2010 01:15 PM

Well, as a current owner of three Toyotas, I am disappointed about the corporate foot-dragging. It appears in the effort to overtake GM as the world's number 1 automobile maker, Toyota has become GM.

david

February 5, 2010 03:22 AM

I have done auto, electrical, pc,etc repair for over 30 years.It is lunacy to use a cpu and software to operate a motor to work the brakes or throttle. But that is what they have done. Cpu's cause full throttle or no brakes. Power enhanced brakes is one thing but to use software to operate the brakes is lunacy. case in point the abs on the ~ 90's gm products. push the brakes you stop but in a sudden panic or im scared eek i must stop type of braking the system grabs then totally releases. You WILL roll thru a stop sign, stop light or run over the kid that jumped out in front of you. After testing a friends sunbird i confirmed a hard hit of the brakes resulted in a nose down drag then a total release of the brakes and a rolling thru a stop sign. Been a kid i would have run them over.

Stephanie

February 24, 2010 04:07 PM

I have had two Corollas, two Sentras, a Civic and several GM cars. I also had two Fords and my parents bought a brand new Ford LTD when I was 12. I had nothing but trouble with my Fords, my parents brand new Ford was a complete piece of crap (1983) and my GM cars I have had mixed results with--some of them were amazing and some were crap. I have stopped buying anything but "Japanese" cars now and they're not perfect but I put a lot of miles on them and don't do a lot of maintenance and yes, stuff wears out but I've been happy with most of my Asian cars.

I would still buy a Toyota, but I would not purchase ANY vehicle that was newer than 5 or 6 years old. For starters, I can't afford a car that costs more than $5,000 (nor do I care to spend more than that on one). Secondly, although everyone makes fun of my "junkers" they don't have these massive recalls or if they do, by the time I can afford to purchase the vehicle, the faulty part has worn out or been replaced by that time.

My "brand new" car that I had to finance is a 2000 Honda Civic. For me that's super new, but thank God I couldn't afford a newer one! I recently read that even the Civics are being recalled for airbags that deploy and injure or kill the driver. It even affects 2001 models! http://www.honda.com/newsandviews/article.aspx?id=5376

Sometimes newer is NOT better. And I completely agree with David about not computerizing certain vehicle parts. I LOVE new technology and computers, but that does NOT mean I want to drive one! Computers are known to crash and I really don't want a buggy program running anything in my vehicle that could potentially endanger my life or the lives of others. If a car CPU crashes that's probably not the ONLY thing that's going to crash.

strategist

February 26, 2010 07:46 PM

It s scandalous how Japanese companies are handling such issues and trying to hide them... shame on you!

ex-Japanese-worker

March 4, 2010 01:44 PM

I worked in Japanese companies time to time for several years. I have noticed when there is technical problem, the management tend to hide it rather than try to deal with it. Prior to 1990, I never seen such action in typical in Japanese company, but in recent year, their moral and ethic went done considerably.

Anti Toyota

March 6, 2010 06:44 PM

It s scandalous how long Toyota tried to hide this issue and played with millions of lives. Boycott Toyota!

Postive Attitude

April 13, 2010 06:03 PM

It is really strange that the NASA has to check this problem out, since NHTSA and Toyota can't seem to find it. Really, I think that General Motors, to be called G.M. from now on, is paying off debt in June of 2010, and then congress will take back the stocks the American public has after it bailed out GM. and it is easy too see La Hood is actually backing GM and making another car company look bad in the process to accomplish it's goals.

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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