Toyoda: "Toyota's Screw-Ups Look Like GM's"

Frank Williams
by Frank Williams

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.

Frank Williams
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  • Psarhjinian Psarhjinian on Jun 23, 2009
    In the years ahead, China and India will both be larger auto markets than the US. The US market, on the other hand, is likely to be an ever smaller share of the world’s automotive pie. Success in the US is no longer a key indicator of an automaker’s health or long term prospects. This is true, but it will be many years before you can safely skip North America and consider yourself an true multinational. It's also very dangerous to cede what is still a very lucrative market to your competition. It’s obvious you don’t get it - If VW AG has been able to obtain the #2 ranking in the world with their low volume of sales in the U.S., that should tell you that the U.S. market isn’t as large (or as relevant) as you think. And you call VW arrogant? Volkswagen is #2 because of dumb luck: their success results from heavy investment in two markets: China, which did not slow as dramatically, and Germany, which is bribing customers to buy cars. Were it not for the Abwrackpraemie, VW would not be where they are. It's like winning a race because you were the only one who's lane didn't have an oil slick in it. You won because you were lucky, not because you were better than the other runners. I'm not trying to say that the North American market is the be-all and end-all, per se, as much as that Volkswagen still is not being in a position to overtake Toyota because it flat-out does not have Toyota's global presence. When (not if, when) the global economy recovers, Volkswagen's #2 will be very, very short-lived as it has zero traction in markets that contribute heavily to the bottom-line of it's competitors. Plus, it will face increased competition from Toyota, Hyundai, Renault/Nissan and possibly GM in all it's core markets. Oh, and it, like GM, will also have to deal with China no longer being it's exclusive playground. I agree that Toyota has a lot to worry about from Hyundai. I don't think that VW can be considered any more serious a competitor than Ford, and possibly less so than a resugent (ha!) GM or Renault-Nissan. It just doesn't have the reach.
  • JK43123 JK43123 on Jun 23, 2009
    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. Exactly. We could have gotten a whopping 50 bucks from GM, after they were sued over the leaking intake gasket fiasco. OOh, 50 bucks, after we lost thousands. I'll call Toyota's actions customer service any day. John
  • Dolorean23 Dolorean23 on Jun 23, 2009
    That was Ford’s mistake with the Taurus redesign in 1997? they made it too wierd and alienated the regular folks. Ford's mistake with the Taurus in 1997 was one of those times where they went with form over function. The car was specifically designed to be circular (ovid?) right down to the windshield and back glass (both ovals) so that the only square object on the design would be the license plate. They also designed it with Women in mind, not men. For instance, the hand-well inside the door was lengthened by 3 inches so no one would break a nail. The stereo and HVAC controls, which I guess in 1995 were too confusing, were now binnacled together in a circular lump in the middle. However, the main problem that Ford never addressed was the frame and the engine choices, neither of which changed until 2006. Even today, you can still buy a Taurus with the woefully tired 3.0L V-6 under the hood. Thankfully the frame has been corrected to bring the Taurus at least into the new decade.
  • Tricky Dicky Tricky Dicky on Jun 24, 2009

    Some of the comments above are incredible. I think the Toyota Japan website has about 80+ different vehicles listed as currently being in production. Tundra production is about 1.2% of bigT's forecasted global output for 2009, and less than 10% of what they churn out in the US. Don't draw too big a conclusion ("Toyota is the next GM") from such a limited sample. Don't you admire their "mea culpa" for paying out when there's a problem? Nicer than having to get in a big fight with some bad-ass corporate lawyer trying to get them to accept responsibility isn't it?! "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?" - how can such a statement be justified? Anyone worked inside a 100K+ employee corporation and seen it change direction so rapidly? As any oil tanker captain can tell you, you can turn the wheel as much as you like but it's going to take half an hour before the nose of the ship starts to move....