TTAC’s not the only one wondering when Toyota will stop acting like GM. Last February, none other than 84-year-old honorary chairman Shoichiro Toyoda (grandson of the company founder) upbraided 400 Toyota executives by asking them the same thing. “A person familiar with the meeting” told Bloomberg that Toyoda started out by asking lame-duck president Katsuaki Watanabe, “How many times have you made a mistake?” Then he went on to accuse the group of chasing sales and profits and letting Toyota emulate GM and Chrysler by becoming “addicted” to big cars and trucks while ignoring “the customers’ need to save money.”
This came just a month after the announcement that Toyoda’s son, Akio, would replace Watanabe. Akio assumes his new post tomorrow at a shareholder meeting. And he’ll have his work cut out for him, with Hyundai/Kia nipping at their heels in the economy market around the world, Honda launching an attack on the hybrid homefront, the Texas Tundra plant becoming a black hole when the pickup market crashed, and the Lexus cash cow drying up.
At least someone called them out on it, so they know what they have to do. You can only imagine what could have happened if one of GM’s past chairmen would have had the balls to confront GM’s president and executive leadership like this. Nah, you’re right . . . nothing.
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And I bet he doesn’t bring in brand mangagers from baby diaper companies to replace the fired execs.
Nothing will happen here, either. Toyota is where GM was circa 1970, and Honda isn’t far behind.
Are those guys really, really short or are the girls tall?
Nothing will happen here, either. Toyota is where GM was circa 1970, and Honda isn’t far behind.
One very big difference is that no one at GM’s BoD has done what Shoichiro just did. Right up until he was canned, you had the likes of George Fischer expressing full and total confidence in Rick Wagoner et al.
No one in the GM BoD has ever publicly spoken ill of Jack Smith, Robert Stempel and/or Roger Smith, or even questioned their performance and strategy until very, very recently.
“No one in the GM BoD has ever publicly spoken ill of Jack Smith, Robert Stempel and/or Roger Smith, or even questioned their performance and strategy until very, very recently.”
John DeLorean doesn’t count? Sure it was after he left the company, but Toyoda is only an “honorary chairman”.
You can hope that Toyota will fix its problem of a useless brand (Scion), confusing product lineups and overlap, and utter blandness all around, but I’m not going to hold my breath.
John DeLorean doesn’t count?
No, he doesn’t. There’s a huge difference between a disgruntled loose cannon like DeLorean or Ross Perot and the sitting Chairman publicly tearing up a sitting (if lame) President.
You can hope that Toyota will fix its problem of a useless brand (Scion), confusing product lineups and overlap, and utter blandness all around, but I’m not going to hold my breath.
Scion** aside, Toyota’s brand is actually pretty rational. As far as I can see, they have three overlaps that are problems: the xD and Yaris hatch, LandCruiser and LX, and the Venza and RAV4. That’s not too bad, and as the useless-appendix cars get to the end of their life they’ll just be dropped, much as the Solara and Celica were.
As for blandness, well, what would you have them do? People like vanilla ice cream more than any other flavour, and Toyota’s goal should be to sell very good vanilla ice cream in a sustainable fashion.
** Even Scion isn’t really bad, per se, but it is a victim of what Shoichiro is saying: chasing volume at the expense of sustainability. They were, and still ought, to be selling oddball JDM/EDM cars that can’t work as volume Toyotas (bB’s, Aygos, certain Daihatsus). But Scion’s people got greedy and started chasing volume sales because that was the order of the day, which gets you the new xB, which thusly pushed the RAV up in size. Bring back the xB and the RAV doesn’t have to step on anyone’s toes.
I guess this does provide a measure of consolation to the folks who did see Toyota becoming the new gm.
Of course it remains to be seen whether yelling at them like some modern day Billy Martin will yield any meaningful results. I do find it it interesting that he didn’t seem too concerned about his company chasing sales going after big cars and trucks when they were getting their Scrooge mcduck on.
I do find it it interesting that he didn’t seem too concerned about his company chasing sales going after big cars and trucks when they were getting their Scrooge mcduck on.
Maybe he did behind closed doors or maybe he didn’t see the problem until it was too late to avoid their current problems. But, at least somebody high up the food chain is saying something. Can you really say the same thing about GM? They have been sliding towards bankruptcy for several years and are currently bankrupt, yet they still play the blame game, blaming the economy and the stupid customers who don’t realize how good their cars are.
BTW, did anyone else think of the Hyundai Genesis Superbowl commercial when they read this (the one with the screaming Lexus executives in the board room?)
“You can only imagine what could have happened if one of GM’s past chairmen would have had the balls to confront GM’s president and executive leadership like this.”
Sure. They would have tried to have him committed.
—
On the photo…
Guys short/girls tall?
If I understand correctly, average heights in most other countries have been increasing dramatically since WWII. The girls are young, the guys are old… Plus, almost certainly, some sort of high heels.
The older gentleman to our right looks like Akio Morita, the chairman (former?) of Sony Corp. to me. I imagine he isn’t but…
And was this photo taken in China?
Quality is sliding, interiors are craptastic, they’re FULL of guzzlers as the D3(Tundra, 4Runner, Sequoia…)
They went pursuing what the US market “wanted”, which was SUVs. Of course, that they “had” to move and eat the domestic’s cake on that market also count (once they ate the cars one).
The Koreans and the Germans (VW) will eat their cake now.
This is the next GM. The thing is they’re still on time to choose how they will end.
As for blandness, well, what would you have them do? People like vanilla ice cream more than any other flavour, and Toyota’s goal should be to sell very good vanilla ice cream in a sustainable fashion
Man thats a good point. Wish I’d thought of it. Youre absolutely right, most people (not just Americans) seem to prefer not thinking at all and buy whatever soulless appliance the neighbor bought or Jack from accounting said was cool. For me, driving a Corolla is akin to riding the Maytag on full spin but a lot of boring people like simple and efficient. Something that they don’t have to think too much about. And they all want an automatic tranny and blink at you like youre stupid for rowing it yourself.
“No one in the GM BoD has ever publicly spoken ill of Jack Smith, Robert Stempel and/or Roger Smith, or even questioned their performance and strategy until very, very recently.”
Worse, anyone who tried to would get shit on and cold shouldered. For example, Roger Smith’s leadership got questioned in the late 1980s by Ross Perot and Michael Moore. Perot just got shit on and canned, and they just gave Moore the cold shoulder and the move-along whenever he tried to meet with Smith. Watch Roger & Me, you will see that he couldn’t even set foot into GM hq without getting harassed and kicked out by the guards.
Or a more recent example would be when Kirk Kekorian tried to boot Wagoner and get Carlos Ghosn to run GM. We all know how that went.
The people at GM have their heads so far up their asses that it amazes me.
Youre absolutely right, most people (not just Americans) seem to prefer not thinking at all and buy whatever soulless appliance the neighbor bought or Jack from accounting said was cool. For me, driving a Corolla is akin to riding the Maytag on full spin but a lot of boring people like simple and efficient. Something that they don’t have to think too much about. And they all want an automatic tranny and blink at you like youre stupid for rowing it yourself.
Maybe because for most people cars are just that, appliances. They get you from point a to point b. The cheapest and easiest way to do it usually wins out. And there’s nothing wrong with that. Some people would rather spend their money on other things.
A massive case of GM-itis, yes, but….different company, different culture, and a whole lot better balance sheet (one presumes). My guess is that they’ll get the ship turned before they follow GM right into the iceberg of serial stupidity and denial.
I don’t think it helped that all the people who were calling out GM in public in the 70s and 80s were seen as either borderline insane or loose cannons (Perot, DeLorean, Michael Moore).
Their cars are right now FAR FAR from being economical.
Here in Venezuela, they’re in fact the MOST expensive of the mainstream brands. And that’s not adding the current overprice, which positions them as a true luxury item.
And if Hyundai is gaining traction in China/India…
Big grow is down here, not up there.
@ Stingray
The 4Runner came on the market six years before the Explorer. Seems in this case maybe Toyota was the one being chased.
“Man thats a good point. Wish I’d thought of it. Youre absolutely right, most people (not just Americans) seem to prefer not thinking at all and buy whatever soulless appliance the neighbor bought or Jack from accounting said was cool. For me, driving a Corolla is akin to riding the Maytag on full spin but a lot of boring people like simple and efficient. Something that they don’t have to think too much about. And they all want an automatic tranny and blink at you like youre stupid for rowing it yourself.”
Yup, most people here are not the “average customer”. Folks like my dad who just wants something that’s reliable, comfortable, and doesn’t look too stupid. That was Ford’s mistake with the Taurus redesign in 1997? they made it too wierd and alienated the regular folks.
delorian23:
For me, driving a Corolla is akin to riding the Maytag on full spin but a lot of boring people like simple and efficient. Something that they don’t have to think too much about. And they all want an automatic tranny and blink at you like youre stupid for rowing it yourself.
I’ll agree with you about the Corolla driving experience. On the other hand, you can get a stripper Corolla with both manual transmission and manual (hand crank) windows.
I wouldn’t count Toyota out yet. The have a huge advantage that GM didn’t – no legacy costs.
The words are Chinese.
Also, the women could be wearing high heels.
Toyoda’s gesture seems more symbolic, a move to show people who have invested in Toyota that the company is aware of its current challenges. Didn’t Toyota recently have a massive management shuffle?
autoarcheologist :
June 22nd, 2009 at 4:37 pm
Yup, most people here are not the “average customer”. Folks like my dad who just wants something that’s reliable, comfortable, and doesn’t look too stupid. That was Ford’s mistake with the Taurus redesign in 1997? they made it too wierd and alienated the regular folks.
It looked really awesome and futuristic for six months though, didn’t it?
I thought it was cool at the time, but I was 12 years old. That was probably a bad sign.
“Toyota’s screw-ups look like GM’s.”
Ummm … I don’t think so. Those guys from Toyota appear to have oriental features.
Runfromcheney: “they just gave [Michael] Moore the cold shoulder and the move-along whenever he tried to meet with Smith. Watch Roger & Me, you will see that he couldn’t even set foot into GM hq without getting harassed and kicked out by the guards.”
OK, now I have to be serious. Moore is a propagandist and entertainer for people of the same political view. Don’t believe anything Moore says unless you verify it with independent sources. As Prof. Greg Hilton stated, “Roger Smith was filmed answering Michael Moore’s questions, but this was not shown in the documentary, and the entire premise was that Smith was avoiding Moore. The exact opposite was true. Smith never avoided journalists, even when the questions were painful.”
The Koreans and the Germans (VW) will eat their cake now.
VW? Really? The company that’s terminally incapable of selling cars in North America?
Until VW manages to sell cars in quantity in the (erstwhile) largest market in on the planet, they’re no threat to Toyota. I’d say Hyundai stands a better chance at getting a toehold on Europe, given VW’s inability to execute here.
There’s an insufferable level of arrogance coming out of VW with regards to this. Yes, you’re not seeing declines; no, it’s not because of your unique strategic ability as much as it’s pure, dumb luck. If Europe was taking it on the chin in lieu of North America it would be a different story.
@jimmy2x
I don’t think so. Ford had the Bronco II before the 4Runner… that 6 years before the Explorer, was 2dr and had 4 cyl engines.
And I think the truck that made that segment to boom was the XJ Cherokee, not the Explorer.
“No one in the GM BoD has ever publicly spoken ill of Jack Smith, Robert Stempel and/or Roger Smith, or even questioned their performance and strategy until very, very recently.”
You forgot about Ross Perot. He was a board member, briefly in the mid ’80’s, and was all over Roger Smith like a cheap suit. Of course Smith ultimately paid Ross an enormous amount of $$$ to go away.
The have a huge advantage that GM didn’t – no legacy costs.
One, Toyota has legacy costs in Japan. Two, Toyota actually has more costs per vehicle than GM does, period.
The Toyota advantage has nothing to do with the workers and everything to do with management. They’re not perfect, but then again, if this were 1981, you can bet that Thomas Murphy** wouldn’t have been treated to a verbal dressing-down by Roger Smith.***
** Mr “General Motors is not in the business of making cars. It is in the business of making money”.
*** Credit Smith, he tried to fix GM, but GM didn’t want to be fixed and he wasn’t the guy to do it.
Stingray :
June 22nd, 2009 at 4:09 pm
Quality is sliding
[citation needed]
@ Stingray
Point taken. Frankly I forgot all about the Bronco (in spite of the ride from hell I had in the back seat of one from Virgina to Philly).
That said, the 4Runner is still around and maintains it’s reputation for bullet-proof reliability. Bought an ‘08 new last year and would not trade it for ANY other new vehicle.
50merc:
“OK, now I have to be serious. Moore is a propagandist and entertainer for people of the same political view. Don’t believe anything Moore says unless you verify it with independent sources. As Prof. Greg Hilton stated, “Roger Smith was filmed answering Michael Moore’s questions, but this was not shown in the documentary, and the entire premise was that Smith was avoiding Moore. The exact opposite was true. Smith never avoided journalists, even when the questions were painful.”
I have heard about it, and I don’t believe that it is true. The reason I don’t believe it is because if Moore did meet with Smith and interview him, wouldn’t have GM defended itself with that information back in 1989 to discredit the film? The fact that info like this is only popping up 20 years after the film was released makes me think that it is just people who don’t like Moore making up any old crap to discredit him.
As for the rest of your post, though, I agree. The reason why I like Moore is because I have similar political views.
You gotta admit, regardless of his political views and what a major-league douchebag he can be, that Moore called it right about GM in “Roger and Me”.
I agree with BDB, Moore did a good job of showing the arrogance that not only sank GM, but the city of Flint as well. You could see throughout the film that the people in charge of Flint just didn’t get it. They looked a lot like GM execs look today.
Is Toyota losing market share or gaining market share in the US?
I don’t see any I will never buy another Toyota again after my last POS. Not saying there aren’t any stories like that but with GM every other person I know has a never buy another GM story.
My opinion never confuse one’s own personal taste with whether a company’s products are on or off the mark. Corolla’s and Camry’s are not appliances they are simply four door family sedans. Affordable 4 door family sedans are what middle America buys just like the Galaxy 500’s, Falcons, Furies, Valiants, Impalas and Novas of old only the names have changed to Camry and Corolla and their now reliable.
[citation needed]
Citation Provided
“I don’t see any I will never buy another Toyota again after my last POS.”
I bet all those poor bastards that bought the Tundra and had its frame rot will never buy a Toyota again!
And again, this isn’t GM circa 1985, but GM circa 1970.
You forgot about Ross Perot. He was a board member, briefly in the mid ’80’s, and was all over Roger Smith like a cheap suit. Of course Smith ultimately paid Ross an enormous amount of $$$ to go away.
Exactly. GM was how Ross Perot became a $cash$ instead of “merely” equity billionaire. GM bought EDS (I know, I used to work for EDS doing OnStar IT crap) from Ross in a big stock swap.
Perot was on the board, and was flabbergasted no one in the Ivory Tower at GM ever actually called up their dealers to see what their impressions were of what people wanted, what their (fleeing) customers thought of GM and its rides, what was wrong/right, etc. Just pie-charts and…well, more pie-charts. He was also amazed no one there in the suites was actually driving the competition’s vehicles, to at least compare notes vis-a-vis what GM was offering in that equivalent market segment…at least outside of what the pie-charts told’em.
Perot would bring these issues up at boardroom meetings and hound the execs about these problems. Silly little guy actually took being a director seriously, seriously enough to care about the problems anyways. Roger and the gang forked over $700 millions (in 1986 dollars..WOW!) to make him go away. Ross cleaned up, given what the stock did over the next twenty-three years!
Great article (funny and informative) on Ross Perot’s impression of GM circa 1988 (sounds like reading one of RF’s columns circa 2006…if RF was a hick from Texas anyways) :
http://money.cnn.com/magazines/fortune/fortune_archive/1988/02/15/70199/index.htm
# windswords :
June 22nd, 2009 at 2:38 pm
Are those guys really, really short or are the girls tall?
————————————-
Those “Li Yi” (ceremony) girls in China are typically 5′8″ to 6′ without high heels.
I bet all those poor bastards that bought the Tundra and had its frame rot will never buy a Toyota again!
Oh, they’ll buy the same rust prone Tacomas and gush about the hush money Toyota gave them and call it customer service.
quasimondo: “Oh, they’ll buy the same rust prone Tacomas and gush about the hush money Toyota gave them and call it customer service.”
It’s not hush money if you’re allowed to talk about it. Toyota paid customers sizeable cash buyouts for trucks that didn’t give value.
GM could learn a lesson.
And a pile of links in a Google search is not a citation. What’s your authoritative source? Pick one.
Your search turned up this, by the way:
Another Lesson for GM
GM, as even Lutz finally understands, earned a reputation.
And Toyota seems to care about its reputation which, until recently, didn’t seem to bother GM a bit.
“The words are Chinese.”
I had to read the first few characters to confirm it was about/in Guangzhou (I lived there for 3 years and routinely travel back there).
There is no sexier dress than a Qi Pao.
“It’s not hush money if you’re allowed to talk about it. ”
The end effect is people *won’t* talk about their rustbucket Tacomas, though.
“GM could learn a lesson.”
The Japanese need to learn a lesson–how to build a decent full size pickup! They still haven’t done it.
BTW, I have (more) than a feeling that if the shoe were on the other foot, and these were rusting out Silverados (or Rams, or F-150s) the MSM would sream how it was an unmitigated disaster, and we’d be hearing about “rusting Silverados” into the 2030s.
Toyota, like Macintosh and Nintendo, are favorites of the MSM press. You never, EVER hear about the milquetoast pieces of crap Apple was selling in the middle ’90s, or about the Virtual Boy, or rusting Tacomas. It doesn’t fit the lazy narrative–”Nintendo makes no mistakes”, “Macs are cool”, “Toyotas are reliable”.
To continue the analogy, the D-3 are treated like Microsoft.
Making the management scared shitless of making a mistakes is a sure fire way to become a modern age GM. This will ensure limited risk taking and CYA activities that will only serve to solidify their overall decline.
You don’t want extreme inaction (GM) or extreme overreaction (ToMoCo) you want to be somewhere in the middle (Ford or Hyundai or something) where you’ll take a chance on a new sports coupe or take your Taurus upscale in a risky move.
Their balance sheet is good yes, but so was GMs back in their hey day.
Qi Pao can only be sexier if they’re shorter.
And yeah, the pic is from China.
And why can’t I edit my own profile? I don’t have permission? WTF?
It’s not hush money if you’re allowed to talk about it. Toyota paid customers sizeable cash buyouts for trucks that didn’t give value.
Oh, it’s hush money when any ill will towards a company for buying a truck that can’t last 10 years evaporates with being given money to buy another truck that won’t last 10 years either.
And a pile of links in a Google search is not a citation. What’s your authoritative source? Pick one.
How about a trusted source?
http://www.thetruthaboutcars.com/toyota-falling-quality-is-job-one/
And Toyota seems to care about its reputation which, until recently, didn’t seem to bother GM a bit.
Toyota cares about its reputation only as much as it allows them to rest on their laurels and coast by with it. They’ll continue to do so as long as the impression remains that their competition has not caught up with them. If they did care about their reputation, they wouldn’t be in this position now, would they?
Toyota, like Macintosh and Nintendo, are favorites of the MSM press. You never, EVER hear about the milquetoast pieces of crap Apple was selling in the middle ’90s, or about the Virtual Boy, or rusting Tacomas. It doesn’t fit the lazy narrative–”Nintendo makes no mistakes”, “Macs are cool”, “Toyotas are reliable”.
To continue the analogy, the D-3 are treated like Microsoft.
Apple made junk in the middle ’90’s (including clones, they tried clones in Amellio’s last stand) and everyone admits it. Apple was on life-support and the first thing Jobs did when he got back was make a deal with the Devil (Microsoft) to get some cash just to keep the company ALIVE. Microsoft thought they were buying basically a legal defense for the then on-going antitrust movements against them (See! a competitor!) on the cheap. Apple came back because Jobs and Tim Cook got their scheiße together and re-invented themselves. Kool-aid from the iPhone dorks aside, they earned their present glow. GM would still be cranking out Newtons and swearing by Power PC’s (pushrods, anyone?) if they were Apple!
Ditto for Nintendo, who got edged in the States by the Genesis, creamed by the original Playstation, (no one mocks the Virtual Boy because no one heard of it…such a bomb it was), held on with the Gamecube, and then innovated their way back to glory with the Wii. GM’s style would be to keep cranking out Virtual Boys for ten more years, but change the plastic case and call it the Cadillac Virtual Boy or something…then wonder why it tanked.
Toyota hasn’t built a world-beater full-size truck. But they keep trying, and keep getting better. They also do things like make the Prius, which though I do not like it or the grape-nuts crowd that conspicuously consumes it, makes a truckload of money for Toyota and gave them green street-cred cover for selling all those Tundras (Kind of like the soap in Fight Club “We sell the fat ladies their own asses back to them”). GM is making the Volt-age because of the Prius. Toyota isn’t making anything to counter some GM widget that made a market…there is a difference.
BTW, when was the last time GM sent anyone a check (outside of a mandated court settlement check) to make up for a crappy ride they sold somebody? That would be zero (percent financing!).
psarhjinian :
One, Toyota has legacy costs in Japan. Two, Toyota actually has more costs per vehicle than GM does, period.
Toyota’s legacy costs are limited by common sense and the Japanese government. They do not have 50 year old retirees drawing pensions (and health care) for 30 years.
The cost per vehicle metric does not incorporate the value per vehicle. IOW, $1 of labor at Honda Civic factory does not equal $1 of labor at a Cobalt factory.
The Toyota advantage has nothing to do with the workers and everything to do with management.
It’s both. The UAW is a negative in the workplace – which is why transplant factories union free. No silly work rules, no jobs’ banks, no need to keep factories running regardless of demand…
Read what the UAW did to kneecap the Saturn plant – one of GM’s best.
quasimodo:
Oh, they’ll buy the same rust prone Tacomas and gush about the hush money Toyota gave them and call it customer service.
As Mr Karesh has pointed out, the imports and transplants can AFFORD such payola when dealing with borderline warranty claims. Toyota can AFFORD hush money – they have a market cap 10X++ GM’s, actual profits and cash flow.
@CarnotCycle
That old interview with Ross Perot was a great read. Slightly OT but relevant to another post at TTAC, Perot confirms that the execs got specially prepped cars that were kept in top shape. Perhaps equally telling, Hyundai USA’s CEO John Krafcik used to drive Accent SE 1.6s before he became president; after he became president, he was sort of forced to drive a Genesis. His wife drives a Sonata Limited.
As Mr Karesh has pointed out, the imports and transplants can AFFORD such payola when dealing with borderline warranty claims. Toyota can AFFORD hush money – they have a market cap 10X++ GM’s, actual profits and cash flow.
As long as you can admit that it indeed is hush money, regardless of whether or not they can afford it.
I guess you can say they were the true pioneers of “Cash for Clunkers”
If Toyota names the replacement for the current Tundra anything other than Tundra then that’s a sign they’ve become GM. I have a feeling its going to be called a Tundra.