By on February 19, 2010

This was a rough night and day for Akio Toyoda, chief of the fishtailing Toyota. At around midnight, Tokyo time, the news reached Toyoda-sama that the Honorable Edolphus Towns (D., N.Y.), chairman of the House Oversight and Government Reform Committee, had formally invited him for a visit on the hill.

This had followed a Japanese version of the “he loves me – he loves me  not – he loves me.” It was made even more interesting by the botanical truism that the cherry blossom only has five petals to pick. Here, the chronicle of the deflowering …

First, Japan’s Transportation Minister Seiji Maehara was sure (hint, hint) that Toyoda would go to Washington to explain himself. Toyoda didn’t think so.  5 days later, Toyoda supposedly was already on a plane to Washington. Then he delayed. Last Wednesday, Toyoda said to the members of the 4th Estate that he’d definitely won’t go. A day later, yesterday, the official party line still was that Toyoda won’t go. “Mr Toyoda has declined an informal invitation to appear before lawmakers on a planned trip to the US next month,” reported the Financial Times.

Dave Cole, chairman of the Center for Automotive Research, an union and industry-funded propaganda tool think-tank, gave the surely sincere advice that speaking through an interpreter would create “some real concern that might lead to a more embarrassing situation.” Throwing Cole’s advice in the wind, Toyoda changed his mind again. Later on Thursday, Toyoda said “he would consider testifying before Congress, if invited,” reported the Nikkei [sub] this morning.

Hearing that, Edolphus Towns immediately dispatched a formal RSVP to Toyota City. A subpoena would have been next.

This morning in Toyko, Toyoda said “ryo syo shimasita” (“I accept,” in a very formal way.) He “changed course and said he would appear before Congress next week,” as the Nikkei reported this Japanese morning.

In a statement, Toyoda said: “I have received Congressman Towns’ invitation to testify before the committee on Feb. 24 and I accept. I look forward to speaking directly with Congress and the American people.” He probably didn’t really mean the last sentence, but this is Japan and that is Congress.

Minutes later, Tokyo was rocked by a #6 earthquake by way of the bad news that the House Oversight and Government Reform Committee had subpoenaed Dimitrios Biller, along with all Toyota safety-related documents in his possession. The Nikkei provided as an aftershock that Biller’s attorney would gladly turn over the documents to Congress. A spokesman for California Rep. Darrell Issa said outright that the subpoena was intended to get around a preliminary injunction issued this month by an arbitrator that blocked Biller from disclosing possibly damning company documents.

When the Toyko market opened at 9, shares in Toyota Motor Corp. (7203) opened lower, recovered an hour later, and then sunk like a rock. The bad boys at the Nikkei thought this was a reaction to Toyoda possibly embarrassing himself in DC. We disagree and opine the market is worried about the Biller files. Or maybe we are wrong. The Toyota share started to drop in earnest when Toyoda announced at 11am that he “will speak with full sincerity.”

The official news that the Toyota plant in Burnaston, U.K. will be idled for two weeks beginning on March 29, made the Toyota stock succumb to Newton’s law even more. 20 percent of the plant’s workforce will be sent into early retirement. TTAC readers are not surprised. The Toyota share ended the day at 3300 yen, down 1.78 percent from Thursday, and pretty much in bottom territory for the year.

A rough Friday ended for Toyota with Transportation Minister Seiji Maehara slapping Toyoda around (in a polite way,) saying that it was regrettable that Toyota “had initially been evasive about whether its president would attend,” writes the Nikkei. ”I hope Toyota will respond with speed, care and responsibility,” the minister told reporters. He didn’t add “as I strongly recommended weeks ago, but nobody seemed to listen to me.”

Toyoda will most likely spend the weekend huddling with speech writers and lawyers, before it’s scionara, and off to Washington on Monday or Tuesday for the Wednesday hearing. Schmitt’s advice to Toyoda: If someone asks you whether you came by private jet, answer: “Sumimasen, JAL went bankrupt, and American wouldn’t accept my miles on such short noctice.”

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37 Comments on “Honestly Now: Mr. Toyoda Goes To Washington. So Will Biller And His Files...”


  • avatar
    ash78

    I’m a little confused. Is he going to the US Congress because we’re the biggest market, because we’re the only ones who are asking him to, or what?

    I thought these issues were global, so I’m hoping this man has more important things to do with his time than to answer to 200 individual governments on how/why a component failed.

    In a sick way, I hope he grills them right back on lax driver training in the US. That would be a bad political move, but funny and appropriate.

    • 0 avatar
      Cammy Corrigan

      ash78,

      China is the world’s biggest car market.

    • 0 avatar
      ash78

      Cammy,

      They’re Toyota’s biggest market in terms of dollars/yen? I still thought it was the US…for now.

      If so, then where’s the Chinese outrage over all of this? The Corolla is most often the best-selling car worldwide, so I know accelerator and steering issues can’t just be an American thing.

    • 0 avatar
      Cammy Corrigan

      ash78, you’re right about the US being Toyota’s biggest market (or definitely in the top two with Japan). But definitely, China is the largest car market in the world. (There’s a link on TTAC about it somewhere).

    • 0 avatar
      ash78

      Cammy,

      My fault for lack of clarity. China is definitely the largest car market (at least in unit terms), and is by far the largest market for future growth opportunity. 20 years from now, China and India will be #1 and #2 by a pretty large margin.

    • 0 avatar
      Robert.Walter

      For Toyota, there is only one time and one market that matters, and that is the present one where a goodly chunk of sales and profits are generated.

      True: China is at present roughly the size of the US. True: The US is a mature market, and China appears to have unlimited potential. True: Toyota’s market share in China is smaller than its US market share. Also True: Toyota’s NAFTA investments and business are both much larger the corresponding ones in China.

      Key Lesson: The business that provides today’s daily bread is the basis for tomorrow’s growth and should never be treated lightly.

  • avatar
    tced2

    Legal question: Can Congress subpoena a foreign national? And if this foreigner chooses to not comply – what is the penalty?
    Mr Toyoda is not a US citizen. He does not live here. He is the chief executive of a corporation that has significant presence.

    Even citizens can be embarrassed by Congressional media hi-jinks. I think Mr. Cole’s advice about problems with a foreigner testifying before Congress is well taken. A person who speaks English as a second language will not look good.

    • 0 avatar

      Congress can issue a subpoena against a foreign national, but the foreign national can do the same as he can do with discovery requests or other official business from the U.S.: Ignore it. There is no way to enforce a subpoena abroad. However, snubbing Congress wouldn’t make Inaba’s job easier, so it’s better to accept the “invitation.”

      On a personal note, ignoring too much official business from the U.S. of A. can impede your future travel plans. A quick round of golf in Hawaii could get rudely interrupted.

    • 0 avatar
      Steven02

      Congress can invite and subpoena him, and Bertel is correct. But, Toyota the company can be subpoenaed and be required to show up. All discovery requests are valid against the company. Bertel is also correct that snubbing congress is not a good idea and that if he was subpoenaed and refused to show, he would not be able to travel to the US without being promptly arrested.

      Congress can also make life harder for Toyota if they so choose. They can request lots of documents, have IRS audits, safety inspections, etc etc. Bottom line, he should show up when congress asks.

    • 0 avatar
      tedward

      I don’t think it’s enforcable, but legislators (working together) carry some pretty big sticks when it comes to doing business in the US. I think you would see letters sent to various enforcement agencies requesting investigations and inquiries into Toyota’s business if he rudely rebuffed congress. Once those requests are made even Toyota’s friends in Congress won’t be able to do anything to help them, the company would have to lawyer up, bunker down, and expect months, really years, of awful press.

      This is as it should be IMO.

    • 0 avatar

      I’m not a lawyer (and I’ve recently blacklisted one of the few B&B wo identified themselves as such) but AFAIK, ignoring a subpoena by a foreign national who is also a foreign resident does not carry the risk of arrest on a future trip to the USA. We are talking a witness here, not a criminal.

      http://www.justice.gov/usao/eousa/foia_reading_room/usam/title3/19musa.htm says:

      “Since foreign nationals residing in the foreign countries are not subject to the subpoena power of United States Courts, their attendance can be obtained only on a voluntary basis. Obtaining testimony from foreign nationals is often a delicate matter, and care must be taken to avoid offending the sovereignty of the foreign country involved.”

      Ah, and Toyoda can ask for his travel money to be reimbursed:

      “The present witness allowances under 28 U.S.C. Sec. 1821 are generally acceptable to foreign nationals. Therefore, payment of the statutory rates, subsistence and actual cost of transportation may be made on the basis of the witness attendance certificate, and Form OBD-47 is not necessary.”

      My prior reference to travel plans were of general nature. Some of my friends at VW were intercepted by process servers after clearing immigration to the USA and served papers.

    • 0 avatar
      L'avventura

      A subpoena from Congress is very different from a normal subpoena from a court of law.

      Congress has a long line of precedence and legal tools to enforce their congressional subpoenas. Most often, the resistance against congressional subpoena comes from the executive branch or other parts of the government where rivalries exist. Most recently, and famously, the Bush Administration frequently ignored subpoenas by Congress about the Harriet Miers CIA leak case. Other examples are the Samuel Pierce in 1989, Teapot Dome scandal, Whitewater notes, and the Inslaw affair etc.

      However, Toyoda coming to the hearing is just part of political theatrics. It really serves no purpose other then to score points and get camera time for politicians; we should probably hear some nice sound bites attacking Toyoda.

      But if Toyoda really wanted he could draw it out and fight a subpoena through various legal means. But it serves no purpose to draw this situation out any longer.

      The reality is that there really isn’t much Congress can do to Toyota legally. A $16 million fine is about it.

      Its all about Toyota receiving negative press, that’s the real goal of these hearings and the motivation of Congress. Nothing better in a time when American joblessness being incredibly high then to attack the big-bad foreign big-business.

    • 0 avatar

      Abroad, a congressional subpoena has as much teeth as a court’s subpoena: Dentures in a glass of water. If a Japanese citizen won’t hop on a plane to Dulles Airport, does anyone think Japan will extradite one of their own? Well, there’s always extraordinary rendition …

      Nevertheless, as a good corporate citizen who wants to preserve the Made in America image, taking to the hill is good advice.

  • avatar
    John Horner

    Toyoda has been a complete failure as the new leader of Toyota. What are the genetic odds that an heir to the founder also happens to be the best person in the world to lead the company? Not good.

    Toyota has spent its entire post WWII life as a darling of the Japanese government. Honda at least has the advantage of having started out being at odds with its home government, so they have not developed the bad habits common in favored sons.

    • 0 avatar
      Steven02

      I remember hearing him talk when he took over how Toyota had made mistakes and how he was going to fix him. Losing money, recalls (before all of this happened), and large vehicle dependence were some of the things he talked about. I thought he had his head on straight.

      Now he seems to be ducking for cover.

  • avatar
    bmoredlj

    All this works out to yes, no, yes, no…and finally yes. Sweet Sakura!

  • avatar
    hakata

    He should definitely use a translator. Every word, tone, and emphasis will be under observation, and he could really rub people the wrong way if he makes a cultural error. Heck, folks on this site nearly explode when Cammy uses the collective plural. Also, the time it takes for the translation back-and-forth to happen will make the inevitable pointed, grandstanding, rhetorical questions less effective – like punching someone wearing one of those sumo suits.

  • avatar
    JohnAZ

    If the Biller documents are as bad for Toyota as they have been made out to be, Toyoda is in a heap of trouble.

    • 0 avatar

      The Biller documents are a huge question mark [HT:TheTundraHQ via Twitter]

    • 0 avatar
      baldheadeddork

      I wouldn’t read too much into that one ruling. To reopen that case, the Biller documents would need to have direct bearing on it. If this was not one of the 300 cases where Biller is alleging Toyota hid or destoyed evidence, then it wouldn’t help this one case.

      I keep coming back to this, but it has to be remembered that Biller is not going to walk away unharmed if he’s lying about all this. His career will be over, he’ll never be able to practice law or anything close to it again, and he’ll open himself up for the mother of all defamation cases from Toyota. If he doesn’t have a lot of fire behind this smoke, he’s committing legal suicide.

      Bertel and some others here have made a lot out of the arbitration judge’s ruling that Biller could not publicly release the documents. That wasn’t surprising, this is an ongoing case and it opens some tricky legal questions. The big news out of that ruling to me was, to steal a line from Sherlock Holmes, the dog that didn’t bark. After reviewing these documents the arbitration judge didn’t dismiss Biller’s case and he didn’t order the documents returned to Toyota. Those two things don’t happen if the documents don’t show some evidence to back Biller’s claims, especially in arbitration which is traditionally much more friendly to employer’s claims.

    • 0 avatar
      psarhjinian

      A point about Biller and his documents: what he’s contended that they contain, and what he’s actually submitted to the court, and what Toyota’s copies of the same documents look like are not at all the same. And not in a way that’s favourable to Biller.

      I’d also add the Biller jumped ship with copies of Toyota’s proprietary data that he should not have had (and was chastised byt he bar for gross violations of attorney-client privilege), was given a four million dollar settlement upon his termination from Toyota that included terms about what he could or could not do (which he pretty much instantly broke) and, when he left, set up what amounts to a One Stop Lawsuit Shop for disgruntled Toyota owners.

      Or, in other words, he’s an absolutely archetypical personal injury lawyer.

      If Biller had taken his documents and handed them, pro bono, to the likes of Ralph Nader or Phil Edmonston he might have had a chance of looking clean. As it stands, he might be even worse at public relations than his former employer.

  • avatar

    Dave Cole, chairman of the Center for Automotive Research, an union and industry-funded propaganda tool think-tank,

    Bertel, while it’s true that CAR gets funding from auto industry sources, according to Cole less than 10% of their funding comes from industry sources like OEM’s, suppliers, or organized labor. CAR makes no secret of their funding, the link to their funding report is right at the top of their home page: http://www.cargroup.org/documents/fy09.pdf

    45% of their funding comes from government (state, local & federal) contracts for research, 29% of revenue is from conferences they hold, 9.4% is for “corporate research”. I suppose that conference fees could be a back door by which companies can give them money. If you contacted CAR perhaps they could give you info on conference attendees.

    Frankly it would be interesting to talk with Cole, a free market proponent, about the fact that CAR’s biggest customer base is government.

    Of course, it is not hypocritical for free-market enthusiasts to engage in commerce with government entities. The first obligation a business has is to be profitable. If I’m selling what government is buying, I’m stupid to refuse to do commerce with them on principle.

    • 0 avatar
      crash sled

      Ronnie, I like David Cole, and even though his statements are generally milquetoast, he usually offers some level headed words that would be helpful, if anybody in this industry bothered to listen to them.

      That said, the CAR takes in a lot of cash, way more than what you posted, as shown even by the link you provided. The off-book “cost sharing” amounts to about 1/3 of their budget, and there are always strings attached to money… always.

      And really, when it comes to the UAW, the Detroit 3 and Michigan government, it doesn’t really matter which pocket the cash is coming from, because the upshot is status quo. Nothing hard-edged from CAR, and the corners are always rubbed off. Useful enough, for a talking shop at least.

      I think Bertel’s taking a gratuitous shot at the CAR, as well, but he’s got the facts in order.

  • avatar

    Joe McCarthy’s biggest sin may have been that his reckless actions damaged the cause of anti-communism. There were indeed efforts by the Soviets to use Americans as spies. The Venona Papers make that pretty clear. Alger Hiss was guilty. So were the Rosenbergs.

  • avatar
    baldheadeddork

    Bertel, in the interest of balance can you add propaganda tool in front of Darrell Issa’s name, too?

  • avatar
    crash sled

    No! The Venona Papers were forgeries. I read that in the NY Times… so it must be true. Plus, the Times instructed us that there was plenty of food in Ukraine, and Toyota is the antichrist. “All the (hysterical) news that’s fit to print.”

    .
    .
    .

    That’s the thing though, Joe was hysterical, as well. You can’t respond to hysteria, no matter if it’s printed in 2″ typeset in a newspaper.

  • avatar
    Russycle

    “Formerly invited”???? I hate to nitpick, and I appreciate (and love!) the fact that you guys are cranking out a metric ton of timely copy every day, but it’s really not that hard to keep “formally” and “formerly” straight. Unless that’s what you really meant, in which case, I’m confused. Bertel, if English isn’t your native tongue, I’ll give you a pass…this time!

    • 0 avatar

      Did I really write that? Dang, I did. Not to my defense, but English is actually my third language. Just like Ed’s dad, I was brought up in that strange Alpine-Bavarian language . Subsequently, teachers tried to impress the Hochdeutsch of our Northern invaders on us, using threats (and sometimes applications) of physical force: “Meine Herren, Sie werden gebeten, sich des Hochdeutschen zu befleissigen, mir san do net in am Wirtshaus, Saubande, hatscherte! Glei gibts a Watschn!”

      But rest assured, the nuances between “formerly” and “formally” are known even to this Bavarian brute. This being a Toyota post, I blame the computer. Auto-correct can lead to embarrassing unintended whatevers.

    • 0 avatar
      Cammy Corrigan

      “Defence” not “Defense”.

      And before anyone says it, I know about this American English foible.

      Incidentally, I put that German sentence into Babelfish and this was the result:

      “My Mr., you are asked to be eager to itself the Hochdeutschs me san DO net in at the pub, sow gang, hatscherte! Glei gives ‘ s A to Watschn”

      Sometimes, Babelfish just isn’t a good enough substitute for a human interpreter….

    • 0 avatar

      I said it’s a different language. Sometimes, it comes handy in Chinese factories. You never know if someone speaks German. So, if we want to discuss flaws in quality, we resort to “Jadaschaugtshea. A so a Gschlamp. Aufbassn muass a, da Kines, jeds griagmam am Grawaddl!”

      Confuses not only Babelfish. A Niedermeyer Baule OTOH would grasp even the finest nuance. Newoa?

    • 0 avatar
      Robert.Walter

      “Jadaschaugtshea. A so a Gschlamp. Aufbassn muass a, da Kines, jeds griagmam am Grawaddl!”

      Unfortunally, dialket is not a written language, so no two people in the same town will write it the same, and if you get just a little outside of town, not to mention the region, it’s a sure thing that the spoken words, not to mention the faux-spelling, will get bizarrely different….

      But I’ll take a shot:

      “Wow, look at that! What a mess (literally: “what a whore”). Take care not to get blamed for it (literally: that nobody gets their cravat (or neck) caught in this mess)!”

  • avatar
    ASISEEIT

    Well we now have Rick Perry Republican Governor of Texas standing up for Toyota and bashing the “Union Activists” for the growing criticism of Toyota and their quality problems! I guess it can’t be that some 34 people have died and millions upon millions of vehicles of ALL types have been and are being recalled, no it’s the union boys again! I wonder what Governor Perry would say if his wife or one of his children were killed in a Toyota quality challenged vehicle? It just has to be the union !!! Maybe Osama Bin Ladin is a union member! Maybe the 911 attacks were union incited! Bottom line Republicans have pushed outsourcing for decades! Demacrats signed so-called free trade agreements into law! Starting with Nixon opening up China even though China MURDERS it’s citizens. China now owns America!!!!!! Now with MOST industrial jobs pushed to foreign countries and the products produced imported back to the U.S. you can see what that ultimately does to our economy. We have no production on which to pull ourselves out of recession! We produce very little. Another point to remember is many of you professionals out there who hate American labor. The unions try to provide good wages and benefits so their members don’t go to the emergency room on the taxpayers dime!! When union wages drop, non-union work places will follow suit. Professionals from India, Pakistan, and many other countries are more qualified than many American professionals and if your job can be done on-line or these people start flooding here get ready for your day realization! The feds leave our borders wide open flooding the jobs market with illegals to further kill wages and benefits. This will ultimately kill America and take down EVERYBODY!

  • avatar
    psarhjinian

    Joe McCarthy’s biggest sin may have been that his reckless actions damaged the cause of anti-communism

    And saddled the American political landscape with choices that range from the Right to the Ultra-Right. If the US had accepted a leftist platform’s existence rather than fought it tooth and nail it would probably be a healthier place, politically speaking.

    • 0 avatar
      crash sled

      It exists, then as now, and it’s accepted at whatever acceptance level is acceptable. That’s the thing about “choices”… they’re like automobiles. They’re all out there, and people choose what they want, not what we might want them to want (minor eruptions of hysteria aside, of course, in both cases).

  • avatar
    L'avventura

    In 1989 though 1991, Congress held hearings lead by Barr on whether the FBI could seize suspects or individuals targeted by Congressional subpoenas from a foreign country without the cooperation and consent of that country. Under international law its illegal kidnapping, but the US has justified it in the past. Its a theme that has been constantly revisited under the Bust Administration, and revolves around the power of Congress’ contempt power to enforce their subpoenas as well as Executive privilege.

    The US wouldn’t dare do this to a Japanese citizen, the global backlash of could be severe, and Toyoda wouldn’t be a target of this, but they would shame him into submission through the press.

    Either way all of this is merely political theater. Congressman aren’t very popular given the economy, and scapegoating a foreign company deflects attention away from their decision-making and justifies a $60B investment in a domestic.

    Its reminiscent of Congressman smashing Toshiba radios on the steps of Capitol and during the COCOM incident in the 80s.

  • avatar
    rocketrodeo

    I think we should get on to the real question: Exactly ow will Toyoda-san travel to make his appearance before Congress? Will he fly coach to fully express contrition? Take the executive jet? Rent a Corolla? As you know, this choice is crucially important to his message.


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