By on February 5, 2010

Oy, will they get slaughtered for that: So Toyota Prez. Akio Toyoda met the press late in the Japanese evening in Nagoya. And what did he say? Basically nothing. He said he “ordered swift action” to get a grip on the reported brake problems of the (in Japan) wildly popular Prius hybrid. But he didn’t say anything else. Recall? Shirimasen. (I don’t know.) Free repair if customer requests it? Shirimasen. Computer reflash? Shirimasen. Does Toyota know what’s going on? Shirimasen. Apparently, LaHood’s threat of bodily harm was lost in translation.

As customary and expected in Japan, Toyoda offered “a heartfelt apology for causing so much trouble to many of our customers.” And that was pretty much it. Any action to stop the trouble? Shirimasen. Asked why he convened the press conference, Toyoda said: “I thought many of our customers were worried.”

They still are. More now than before.

The only milquetoast action promised: Toyota will form a global quality control committee. And when they know what steps to take, they will take them. “I will do my best,” Toyoda said.  Jya-ne! (See you later.)

Calling this a downer is the understatement du jour. Yesterday, Toyota had said that they had changed the Prius software in January. Also in January, Toyota had retooled the braking systems for cars made that month. People are anxious to know what happens with the cars they had already bought. Are they safe to drive? Shirimasen. Can it get any worse? Wakarimasen.  (Can’t tell the future.) If this was for U.S. consumption, they’ll puke.


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28 Comments on “Toyota’s Prez. Meets Press Over Prius, Says Nothing...”


  • avatar
    Roxer

    It will be tough to stop the intertia of such a huge company. Trying to figure out how to implement a change boggles my mind. So many factories, so many employees. Where the hell do you start?

  • avatar
    Cammy Corrigan

    Toyoda’s behaviour over this issue has been strange to say the least. In the film “Vampire Hunter D” someone said “There’s 2 reasons why a man stays quiet. 1. Someone who too busy plotting evil to say anything or 2. A good man who believes actions speak louder than words”.

    Trouble is, I don’t think Mr Toyoda falls into either category. I don’t believe he’s actively shafting the customer but at the same token, he’s hardly the pinnacle for proactivity.

    I don’t know, maybe he might surprise us.

  • avatar
    Telegraph Road

    Pitiful. I am reminded of Masatoshi Ono, CEO of Bridgestone/Firestone in 2000, whose hapless performance before Congress was painful to watch. (see http://www.time.com/time/magazine/article/0,9171,997963,00.html ) Fortunately for Toyoda, however, it’s impossible to envision a recurrence of Toyota lapdog Senator Shelby’s criticism of Ono: “What does it take to put a company on notice that perhaps they’ve got a defective product out there?”

  • avatar
    Mr Carpenter

    I suspect that Japan Inc may well surprise America Inc very soon.

    Oh, so you want us to buy MORE debts, eh?

    iie (NO)

    nani ga attemo (under no circumstance)

    kekko desu (no thank you)

    At least they’ll be polite when they tell our gummint go to (NSFW) themselves.

    Once the first man is out of the game, how long before the Chinese follow? And the Indians. And the Brits. And …..

    You get the picture.

    Perhaps history books in centuries to come, deciphering the fall of America, will try to teach the lesson to students that it’s really truly awfully important to not become a slave via debt, and really truly awfully important to not p!ss off your debt holders.

    Though probably it won’t come to that from just this little Toyota incident, eh?

    Nah. A simple gunshot didn’t start The Great War, either. Or, did it?

    The other huge lesson which never seems to sink in to the human race for long is that you can’t really rely upon fraudulent fiat money for long. In EVERY SINGLE CASE in recorded history where fiat money has been used, it’s failed. And generally, the nations which try it fail, too.

    • 0 avatar
      jmo

      Mr. Carpenter,

      HA! Your information is about 20 years out of date. Japan’s debt levels are heading towards 200% of GDP (we’re at 80% of GDP) they are so deep in debt their credit rating was recently lowered to Aa2.

      http://www.bloomberg.com/apps/news?pid=20601068&sid=aebdun6KR0bw

    • 0 avatar
      Cammy Corrigan

      jmo, but one thing Japan has which the United States doesn’t are huge amounts of money in their coffers, $131.2 billion at last count. This money can be used to service their debts and provide breathing space, before they have to start borrowing. Not to mention the $750 billion they own in US debt.

      Japan is far from destitute.

    • 0 avatar
      ClutchCarGo

      Massive debt is a sword with no hilt, it cuts both ways. Once you hold a lot of someone’s debt, you need that debtor to do well enough to pay off that debt. Choking off your debtor will cause the debtor to default, akin to killing the goose that lays the golden eggs. As the old saying goes, if you owe the bank a $1000 and can’t pay, you’ve got a problem, but if you owe the bank $1,000,000 and can’t pay, the bank has a problem. The rest of the world will continue to fund the US as long as looks like the US will keep consuming their output. Admittedly, that debt is looking like yet another global financial bubble that necessarily will deflate. The only question is how quickly/catastrophically it does so.

    • 0 avatar
      John Horner

      Ah, the gold bugs are out again.

      Why should human activity be dependent upon the vagaries of how much gold is dug up, where it happens to be found and how it is passed around? Gold bugs like to complain about “fiat money”, but then they put their faith in an inanimate mineral which is semi-randomly distributed in the earth’s crust. Gold is just another rock. It has no magical properties.

    • 0 avatar
      dkulmacz

      Have you read the Tom Clancy book Debt of Honor (starring everyone’s favorite CIA analyst Jack Ryan)? He stole your conspiracy theory, back in 1994. Funny, it also involved a terrorist crashing an airliner into a government building, too. Maybe Clancy is the real power behind the throne in this country.

      From a Publisher’s Weekly blurb on the book:

      Jack Ryan, now the President’s National Security Adviser, finds himself embroiled in the buildup to a new world war-one in which the stock market and national economic policy are as critical as advanced weaponry. A power-hungry Japanese financier, still blaming America for his parents’ deaths in WWII, plans to use his immense wealth to purchase his revenge. A fatal auto accident in the U.S., caused by faulty gas tanks in two Japanese cars, leads to the breakdown of U.S.-Japanese trade agreements. Spies track each other; nuclear weapons are built and hidden; Ryan and an assortment of his old colleagues maneuver ships, planes and spies into harm’s way. [Etc.]

    • 0 avatar
      L'avventura

      Japan is not going to sell off US bonds, it does them no benefit to do so. If they do the dollar will further weaken against the yen, and export-dependent Japan would be hurt.

      One point you do have is that this current Administration is destroying its relationship with the Asia amazingly rapidly. Japan is one of the few very pro-US governments in Asia, and there are some key issues that will tear this relationship further apart.

      Right now, Japan is thinking over either moving or removing American bases from Okinawa. America needs this base because if there is any conflict with China, North Korea, or Russia these bases will stand as a strategic point of assault and deterrence. Its an important part of America’s global military presence, and right now the Japanese government is considering asking America to leave, or dramatically reduce their troops levels there.

      Current Japanese media is quickly turning against the US administration on this Toyota issue, last week, most of the Japanese media were in sync with US media and outraged with Toyota, now after Lahood’s comments and signs of protectionist fear-mongering the Japanese media are raising an eye-brow.

      China has an ever bigger bone to pick with the US, the arms sale to Taiwan, threats to allowing their currency to float, Google-gate, Obama meeting with the Dalai Lama, etc. And Japan and China have become surprising close with the Hatoyama administration.

      Hatoyama is expected to visit Nanjing to show remorse in a massive public gesture to Chinese of the Rape of Nanjing. Hu Jintao for his part is suppose to visit Hiroshima to mourn the deaths of from the Atomic bomb. (Lots on this subject in the current issue of the Economist), its suppose to be a new era of Sino-Japanese relationship.

      China is doing its best to create a skizm between Japan and the US. The more Japan drifts from the US, the more China benefits.

      The US’ relationship with Asia is becoming more and more strained, and the consequences aren’t about mere cars, there is not going to be a harsh ultimatum, less transparent policy decision will hurt the US in the long-term.

  • avatar
    Quentin

    Bertel – I think your expectations of these meetings with the press are far out of line with what they can actually tell you. If the plan is still being created or finalized, he cannot say what the plan is. What good does it do to make promises that you may not be able to fulfill? I’d much rather an honest “we’re working on it” than some BS that they’ll fail to meet. Was there any other goal of this meet the press than for the president to show that they were working on the issues and that it was his top priority? Were you expecting him to lay out the schematic of the prius braking control system and show what inputs were creating the phenomenon and what they changed to fix it?

    • 0 avatar

      Quentin: In a former life, I was the spindoctor who made house calls when companies were in deep doo-doo like this. First off, I would have never called a press conference.

      In these cases, a “we are taking this very seriously, and the whole company is working on it” statement suffices.

      Note that Toyoda was asked why he called a press conference at all if there was nothing to announce.

      If my client would have – against my protests and threats of resignation – called the conference with nothing concrete to say, I would have sent the head of QA or the head of R&D out, never the President.

    • 0 avatar
      FromBrazil

      Mr. Quentin, I’m with Mr. Scmitt on that. They should of said something. Anything.

      And Mr. Schmitt, perfect writing. Got a laugh of all the “Shirimasen”! I guess all Toyota customers’ said Ouch! each time they heard one!

    • 0 avatar
      Ernie

      Or at least . . . lie?

      The public remembers press conferences and headlines, not follow-ups. “We will do anything it takes to make this right and win back your trust” <- 'right' gets re-negotiated by lawyers and engineers, 'trust' is immeasurable . . . legally.

    • 0 avatar
      L'avventura

      You can see how Toyota is so inept in handling this. The acknowledgment of the problem, the apology, and the recall should have been announced at the same time.

      They obviously have a fix being that Prius’ made after January have no problems. This is obviously easy fix, since it will be an software update. The problem is that dealers can’t handle more load.

      Toyota should merely hire some extra people, drive to people’s homes or businesses and quickly update their cars (if they don’t have enough cars you can rent the grounded fleet vehicles from rental companies). Similar to what they did with the Lexus LS400 recall back in the days, the level of service and how they handled the recall actually helped Lexus’ image.

      The longer they don’t announce anything the larger this snowball will gather.

    • 0 avatar
      Robert.Walter

      Hi Bertel!

      As you previously observed, a 9pm press conference seems designed less for domestic consumption and more for Wall Street before the starting bell.

      As a junior spin doctor (in comparison to you), I agree that unless there were to be some concrete statements and some indication of a plan and timing (to be proactively revealed in a statement, before the Q&A, rather than in reactive, non-robust, answers to reporter’s questions) then the top-guy should not have appeared at all, else he risked looking weak, reactive, uninformend and not in control … more or less what we saw here.

      That said, I was reminded of many experiences in Japan where individuals tried to give the appearance of doing something, or more, or more faster, than they were actually doing … e.g. like in the Lawson, or the Kinko’s, an associate has to get something for a customer and as they walk, they do a high-speed appearing shuffle move … they don’t really move faster than a brisk walk, but they pantomime a jog (without the forward velocity) … while I always understood the intent of these gestures (for those unfamiliar with it, the japanese culture is very big on gestures and symbolism that at turns, seems extremely restrained and then somewhat excessive. This is not really a criticism, more a statement of what I experienced.)

      Could it be that the TMC spin-meister and the head honcho are not sufficiently “westernized”, in that they don’t realize that the pantomime-routine kinda backfires if you use it for a western audience?

      Re. the bow, he didn’t hit the Olympic-level slit-my-wrists-sorry 90° deep bend, more just a curt 45° … body language didn’t seem to match-up with the severity of the situation or the words used, what do you make of that?

    • 0 avatar
      Robert.Walter

      BTW Bertel, I was reading your comment again, re. sending out the head of QC to have a press-rodeo-round-up…

      IIRC, I think I noticed a progression during the last week … about 2-3 days ago the QC-guy did have a chat with the newsboys, then about a day later the COO did likewise, now the CEO/Pres.

      If they keep up at this rate, they will blow-thru Watanabe by mid-week, and then start rolling-in Toyoda-san-Sr. and Toyoda-san-double-Sr. within a week.

  • avatar
    rnc

    If you look at toyota (performance, growth, etc) from the 1980′s- to just a few months ago and the culture created from that performance, they are probably shell shocked with no real idea of what to do, so you have middle management running around like crazy w/o knowing if they are accomplishing anything and the CEO can’t get up and say that (and maybe smartly) rather than lying he is just saying nothing.

  • avatar
    jmo

    Bertel,

    If you know – Japan has a system of corporate crisis management PR firms, right? It seems like Toyota isn’t getting the kind of professional advice it needs. Do we know who they hired?

    If I were Mr. Toyoda I’d be sending a jet to pick up James Burke. He was the CEO of J&J during the Tylenol Murders back in the 80s (and at 85 years old he’s still around)- he’d be the one to talk to about how to survive something like this.

    • 0 avatar
      Robert.Walter

      Burke’s plan was simple … (and incorporated several Deming-PDCA-cycles running in parallel):

      1. Acknowledge the problem (there is lethal product in the field);
      2. Contain the problem (get the product back);
      3. Prevent recurrance of the problem (re-design product from filled capsule to a solid caplet, add multiple seals to packaging);

      … a simple plan just needs a boss to articulate it to the troops and to lead them as they act.

  • avatar
    Mr Carpenter

    So jmo, why are the Japanese still able to buy a portion of OUR debt? I’m not doubting your statement at all. But I’m pretty certain that after China, Japan is still one of the top buyers of US debt.

    In fact, here you go. http://www.cnbc.com/id/29880401?slide=16
    It’s recent, too. January 10th, 2010. Also, here is the Japan page:
    http://www.cnbc.com/id/29880401?slide=13

    Top debtholder for federal debt is the Federal Reserve (can anyone spell “major ponzi scheme” other than me, Ron Paul and Gerald Celente?) $5.127 TRILLION.

    #2 debtholder for federal debt is “other” and “individuals” at $1.114 TRILLLION.

    #3 debtholder for federal debt is COMMUNIST CHINA at $789.6 billion.

    #4 debtholder for federal debt is JAPAN at $757.3 billion.

    Our entire “public knowledge” federal debt is now almost $15 TRILLION, so Japan holds about 5%. Unless I’ve got my zeroes and trillions and billions mixed up.

    • 0 avatar
      jmo

      Mr. Carpenter,

      If they tried to convert that 757.3 billion in US debt into yen the value of the yen would soar resulting in the collapse of Japan’s exports and economy.

    • 0 avatar
      John Horner

      Japan holds a lot of US Treasury Bills for the same reason China does: A massive mismatch in trade between the countries. If Japan (or China) isn’t buying an equal value of good and services from the US as it is selling to the US then it has piles of excess dollars. If you want to fix the US’ foreign indebtedness problem then you have to fix the balance of trade problem. The two issues are the front and back of the very same hand.

      The funny thing about all the debt fear-mongers is that they ignore the most salient fact: Interest rates on US Treasury Debt are at their lowest levels EVER. Lovers of all things free market should know that this means there is more demand for US Treasury Debt than there is supply. Why is this? Well, partly because the net exporting nations of the world see no reason to balance their trade with the US. If they are going to run a trade surplus with the US, then they have to buy the T-bills.

  • avatar
    FromBrazil

    Hah! Finally got an answer from Toyota’s customer service saying something. Right now I have to run, but if there’s any interest I’ll translate it all later. They seem a little worried though as they took only 4 hours to respond to my e-mail (a good time in my book).

    What they are essentially saying is that the cars in Brazil are not involved as some of them come from Japan and not the US. And that the Corolla is built in Brazil using different parts and designs. Well, can be an explanation, but seems rather strange as I know for a fact there are Denso factories in Brazil, in fact in my hometown region (though again, as a fact, I know they produce air conditioners and not throttles). Don’t know about CTC. Would be interesting though to get this little info.

    “Prezado Senhor, boa tarde.

    Agradecemos a oportunidade de contato com o Serviço de Assistência ao Cliente Toyota.

    Informamos que os modelos envolvidos nesta Campanha não foram comercializados pela Toyota no mercado brasileiro, restringindo-se a mesma aos mercados dos Estados Unidos, Europa e China.

    Os modelos Camry e RAV4 comercializados no mercado brasileiro são provenientes do Japão. O Corolla é produzido localmente na planta de Indaiatuba (SP). Os demais veículos citados na campanha não são vendidos no Brasil.

    Sendo assim, tanto as peças quanto o projeto do sistema do pedal de acelerador dos veículos comercializados no Brasil, são diferentes dos veículos fabricados nos Estados Unidos, Europa e China.

    O Serviço de Assistência ao Cliente Toyota continua à sua inteira disposição para quaisquer esclarecimentos que se façam necessários pelo telefone: 0800 703 02 06 ou pelo e-mail: clientes@sac.toyota.com.br

    Atenciosamente,

    Toyota do Brasil
    Serviço de Assistência ao Cliente
    0800 703 02 06
    clientes@sac.toyota.com.br “

  • avatar
    Moparagain

    Mr. Schmitt. Right on point. Good story. Thank You

  • avatar
    Robert.Walter

    Mr. Toyoda received his MBA from Babson College, the same alma mater as Edsel Ford II. I don’t know Babson, so perhaps my next statement is unfair, and inappropriately groups Mr. Toyoda with EF2, but I remember people snickering that Ed didn’t go to a “real” university, because Babson was the “kind of school scions (not Scions) go to when they can’t get into the top-tier schools”…

    I don’t want to be too critical of Mr. Toyoda (as I really do have “mitleid” for him and his situation, and my japanese-language skills are essentially nonexistant, so I try to imagine walking a mile in his moccasins before I make the following observation…), but I think it was also unwise of him, in such a critical situation to take (or at least answer) questions in English …

    If you watch the AP feed, it is clear Mr. Toyoda did not understand the tense of the last question … reporter asked “should you have moved faster?”, Mr. Toyoda, hesitates, question is repeated, or translated (I only watched feed once), and then Mr. Toyoda answers the question (which I think he understood as “can you move faster?”) with “I will do my best.” (A statement which would be normal in Japan, but sounds very weak in the US.)

    Pity, because I think had he used the translator, he could have answered at his articulate best, rather than struggling as he did … I’m not sure that too many people would watch what I watched and try to think about the contextual and cultural reasons behind it, but I am pretty certain they would be left with a bad impression (did Bertel say “puke”? It is probably not too strong a word.)

    Toyota Corp. is walking a fine line now in the public consciousness between looking like liars or incompetents … they can’t afford for their CEO, in an attempt to build confidence, to leave behind a poor impression. (I’m pretty sure this performance will certainly scrub more value off the share price…)

    Comment: Perhaps I am beginning to suffer from some kind of Stockholm-syndrome, because I am no fan-boy, and I think Toyota Corp. has been sluggish and less than forthright, but this whole train-wreck of a situation is beginning to break my heart (in a way similar to when I saw the body of the “Clipper Maid of the Seas” lying crushed and broken in that Lockerbie field, or when the Twin Towers fell.)

  • avatar

    It could be worse-they could run ads or sell shirts that people don’t like.
    Like Chrysler.
    That’s a hangin’ offense isn’t it?

  • avatar
    Robert.Walter

    FYI: Link to IHT article about this issue. Pretty much makes pretty the messy truth Bertel shared with us…

    http://www.nytimes.com/2010/02/06/business/global/06toyota.html?ref=global-home


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