By on February 11, 2010

Yesterday, a strange love-fest between U.S. Ambassador to Japan John Roos and Japan’s transport minister Seiji Maehara ensued. After their meeting in Tokyo, as reported by the Nikkei, the ambassador and the minister said that everything is hunky-dory, and that Toyota’s recent recalls won’t undermine relations between the U.S.A. and Japan. Which is odd in itself: Since when does a $15 gas pedal get a leading role on the world stage of international politics?

Ambassador Roos effusively told reporters that the recall issue ”in no way has any kind of direct or indirect impact on the strength of the bilateral relationship between the United States and Japan.” Who said it would?

Japan’s transport minister Seiji Maehara likewise said that Toyota’s troubles mean no harm to Japan’s relationship with the U.S.: “The issue shouldn’t damage the two countries’ relationship and shouldn’t hurt free and fair market competition.” Again, why should it?

Strange answers to questions nobody raised.

Kyodo News reiterated this morning in Japan that Toyota’s President Akio Toyoda will travel to the United States in March. Toyota spokeswoman Martha Voss said Toyoda ”would look forward” to the opportunity to meet with members of Congress when he visits the United States. The travel plans of the CEO of a car maker get more attention than a state visit.

There has been an odd amount of highest level governmental involvement with this issue recently, far beyond the regular regulatory ratcheting and the habitual grandstanding. The posturing is solely between the U.S.A, and Japan. Nobody in Europe, or China, which are just as affected by the recalls, turns Toyota into a political issue.

China’s state-owned news agency Xinhua couldn’t help but noticing today: “In a sharp contrast to media reports out of the US, voices of leniency and softened tones have emerged in China on the issue, with some people going as far as highlighting the massive safety recalls as a sign of ‘responsible business operations.'” China is Toyota’s second largest foreign market.

In Europe, where Toyota recalls 1.8m cars, the reaction is even more subdued. The German newspaper Die Welt yesterday cited a spokesperson of the powerful ADAC, Germany’s equivalent of the AAA: “The club does not have any complaints or claims from its members. There is no reason for panic.”

As commentator L’Avventura said: “It seems to me that a lot things are going to happen behind closed doors before the congressional hearings. The question is how it’s going to play out and how much of it is going to be predetermined and politically orchestrated.”

Out of the many possible explanations for the strange behavior, here is one of them:

Prime Minister Yukio Hatoyama had campaigned on a platform that contained moving all U.S. bases off Okinawa, or even out of Japan. The Okinawa issue had received a lot of play in Japan. In the last weeks, it turned quiet.

When U.S. Secretary of State Hillary Clinton complained with her Japanese counterpart Katsuya Okada about alleged discrimination of the Japanese cash for clunker program against American cars, it sounded oddly out of proportion. The number of cars affected wasn’t enough to fill a ship.

Now, the U.S.A. seems to have found a powerful pivot point, and Japan’s undivided attention.

As long as the U.S.A. sits on Okinawa, it doesn’t have to dump a lot of arms into Taiwan, a move that would make China increasingly grumpy. China already threatened to cut Boeing et al out of the Chinese market, after $6.4b of American arms made their way to Taiwan. China is estimated to need more than 3000 airliners worth $400 billion in the 20 years from 2009. Airbus already has the inside track in China and would be more than happy to fill the void.

Nobody claims Toyota doesn’t have problems. As many have said, they have had problems for years.  Their problem management is a mess. However, the timing and intensity of the diplomatic activity should give reason for thought.

Implications of a $15 gas pedal …

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18 Comments on “Trade War Watch 13: Pedal Politics...”

  • avatar

    There will be so much going on behind the scenes in these hearings, I wonder if the 19 dead will even be mentioned. Although the unions and the government ownership of GM are not irrelevant to the situation, they are probably among the least significant players.

    My bet is there will be a severe gnashing of teeth, lots of promises to improve, one actual action, and no penalties from the hearings. The single action will be a fail safe brake over-ride policy for all manufacturers, and praise to Toyota for bringing this to the government’s attention.

    • 0 avatar

      How about you provide some link or some evidence of this legendary “19 dead”? How about the 32 dead from GM gas tank explosions or the 97 dead from Honda airbag deployments or the 297 dead from Ford Moonroof Switch electrocutions. There were 4 people killed in a Lexus in California which was attributed to the floor mats, other then that, what?

    • 0 avatar

      @Angainor: (“Ask, and you shall receive; seek, and you shall find; knock, and it will be opened unto you.”)

      26 Dec 09: TX, Toyota ends up in pond on roof, 4 dead, mats later found in trunk.

      I’ll leave it for others to add to my list (I’d much rather get to writing my rebuttal…)

      19 fatalities is a plausible order of magnitude and doesn’t take into account what up until now were near-misses and near non-events which will be much more numerous than the fatality count, both of which (unless the problem was self-healing) would have spilled-over into the fatality count with increasing time and fleet miles).

      As for your allegations: Moonroof switch electrocutions? How does one get electrocuted by a 12V, lo-A, system without tampering with it? (I might buy into moonroof killing a child with a neck pinch, but an Ol’ Sparky performance?) Perhaps this one got by me, but I never even heard of it … care to source your allegation? (The NHTSA ODI or recall number would do just fine, barring that, tell me which vehicles and MY’s were affected and I’ll look it up!)

      Re. GM side-saddle tanks, you cite 32, but other sources cite 155 (Failure Analysis Associates, period ’73-’89) and 1,800 (Nader, period ’73-’00) fatalities. Difference here is that the design (weak as it was in comparison to more modern vehicles, both fulfilled the DOT-side-impact norms and was considered a major safety improvement as it moved the tank out from behind the driver’s seat), and the performance in crash was of a more passive-type failure.

      In addition, over time, people and government learn things, what was bad, what was missing, what could have been done better, what is state of the art … this applies to both design and to corporate behaviour… out of old failings higher standards are developed, and expected.

      Comparing GM’s designs of 20 years ago and behaviour of 10 years ago (which were extensions of previous designs and behaviours and therefore somewhat expected) against Toyota’s failings in both new-tech (hi-tech pedals, and low-tech customer usage requirements and simple design packaging) and a radically changed current behaviour (for the worse visavis scary safety/quality issues, sluggishness of action, disorganized message and response), it is not unexpected, nor unusual, for a company like Toyota to find itself in the position in which it finds itself.

      Political and regulatory winds never stop blowing, nor do they blow with a constant or predictable vector, lesson for any company is “wenn es gibt dreck am stecken”, clean up your mess quickly, and with transparancy and authenticity, because in an internet, bloging, and socialy-interconnected world, once you lose the chance to shape the message, you, like Toyota has recently found out, will certainly lose control of events and your destiny.

      Re. Honda, were they ‘outed’, did they ‘publically foot-drag and stumble’, or did they just get with the unpleasant business of making a financial provision on the books, and doing the recall?

      For the reasons I’ve cited above, the Toyota mat and pedal issues are not usefully comparable with what you have cited. Agreed?

    • 0 avatar

      “(I’d much rather get to writing my rebuttal…)”

      No way Jose’! Any schmuck can craft an opinion. You want to start making numerical claims, first you back them up. THEN you get to toss out your opinion.

    • 0 avatar

      “26 Dec 09: TX, Toyota ends up in pond on roof, 4 dead, mats later found in trunk”

      You mean the accident where the only witness said “She did not see a driver behind the wheel just before it crashed”? The accident where the driver had epilepsy? The accident where the police report said the cause was inconclusive?

      From looking at the NHTSA complaints, it looks like every run red light, traffic accident, or inability to park a car will now be blamed on SUA. Read some of them, they’re very interesting. I think I’m going to make a complaint myself on my Ford. Yesterday the fuel gauge said I had a quarter tank of gas and then, just all of a sudden, the tank was empty. Sudden unintended gas usage (SUGU).

      As for my statistics, I made them up. See, that’s what people do on the internet, make stuff up, make linkages that don’t exist, cite unsourced statistics.

    • 0 avatar

      to Angainor & Syke +1

      and as for the, its obvious
      he has an interest for toyota to fail.

      well guess what, toyota wont.

      btw, i just skip his comments, they are too subjective,
      too long, too boring… not worth reading at all.

  • avatar

    Although I agree with JohnAZ (McCain?) that there will likely be orchestration, will it resemble a Gilbert & Sullivan production? I don’t think so. Things always have the potential to get messy; one word or sentence, or feeling is enough to scrap any pre-arranged script.

    There will always be wild cards (cannon?) in D.C., and this is where the excitement will come from (there is a lot of uncertainty in the political class right now, and a tug-of-war going on for primacy.) All it takes is one Wilsonian “You Lie!”, or Alitoic “Not True!”, to be noticed and broadcast and it will be off to the races…

    The administration has been subject to recent criticism of having said much but accomplished little, and even that has won less than universal praise; so the Admin will also be looking to show voters that it found an dealt smartly and wisely with a clear and present motoring danger.

    Bertel, I don’t agree with your thesis of “question never asked.” As evidenced here on TTAC, and in your links to various news-sources big, small, respected and otherwise sensational, there were varying amounts (up to and including direct) accusation that the US-govt, because of its interests in GM and CG, was purposely bashing Toyota in order to help the home team, as well as employing it as a lever for Okinawa-related negotiations.

    BTW, I don’t recall details, or there was suspension or credit given for support in Iraq, but IIRC the japanese government cuts an annual cheque to the US-govt to defray the cost of US troops stationed in Japan’. There is, however, no divine fiat (not Fiat) that mandates that the US stay in Japan (the fact that the Okinawa lease comes-up for renewal, or renegotiation, would seem to indicate it is not a perpetual, difficult for the host to cancel, Guantanimo-type treaty. Indeed, the 1960 mutual defense treaty, or anpo joyaku (安保条約), which also relates to the Okinawa arrangement, can be cancelled on 1-year’s notice from either party.) If the japanese gov’t really wanted the US out, this could be accomplished; at various times and under various conditions, the US left Haiti, Cuba, Philippnes, Austria, Vietnam (etc.), Panama, most of Germany, etc. Japan would then have to make the decision whether, and to what extent, the JSDF would remain, or be, integrated into US-PACCOM and USFJ, along with modifying (+/-) subsidies paid to the US-DoD, or, if severing the relationship, to what extent the size, scope, and mission of the JSDF would have to be expanded and modified beyond their current pure (and constitutionally-mandated under (Art.6)) self-defense role.

    “Implications of a $15 gas pedal …”, yes, and “for the want of a nail, the shoe was lost”. Things in this life can snowball in crazy ways.

    My Weather Forcast: On congressional testimony days, expect a high-pressure ridge to settle over the witness tables, with intermittent cold and sunshine, with possible heavier snowfalls over the Toyota regions, relatively more moderate conditions with light snow in the NHTSA regions, and constant blustery föhn (foehn)-like winds eminating out of the committee regions. The forecast for the US-Jpn International Relations and Okinawa regions is continued mild and steady.

  • avatar

    True, there were all kinds of allegations concerning the home team. However, they focused on conflict of interest: A shareholder in two domestics is also the regulator. It had been insinuated that DC is out to get Toyota, or possibly the Japanese car industry. These allegations had been summarily shot down as whacko conspiracy theories.

    The question that nobody asked was whether the Toyota recall is undermining the relations between two countries. It is very surprising that the ambassador and the minister adamantly deny any strain on the relations between the U.S.A. and Japan due to Toyota.

    Even the Nikkei piece mentioned in the previous Trade War Watch only made an oblique reference to Okinawa: “With the Japanese government also having bumpy relations with Washington right now over the relocation of the U.S. military’s Futenma base in Okinawa Prefecture, Toyota could be put into a very difficult corner over the quality problems.”

    • 0 avatar

      Perhaps both the ambassador and minister are avid TTAC readers. In the unlikely event they are not – I am sure the buzz around both political offices is that of ‘what will the future hold for our trade relations’

      I find it very interesting that what sounds like all the other countries (including my naitive country of Canada) is already moving past this. Yet the US decides that this must be a gigantic issue – why? Because a scapegoat is a required item when fighting a larger battle.

  • avatar

    “Strange answers to questions nobody raised.”

    Are you kidding me? These very questions have been the subject of Trade War Watch by this very author who quoted numerous sources asking those questions.

    • 0 avatar

      Most accusations have mostly been muted have not received much coverage, and the majority haven’t outright accused the US. Obviously, by having crucial diplomats come out and make very large public statements, it gets much more attention and scrutiny then it otherwise would have.

      For instance, the Reuters article I’ve posted below.

  • avatar

    Japan is in the unique position of being a child in the middle of two divorced parents (US & China). Both sides are important to Japan, and as long as they are pitted against each other Japan can make demands.

    The Futenma base is one of those “Japan in the middle” issues. Japan does not want a complete removal of US troops from Okinawa, Japan spends 1% of its GDP on defense, and its just as scared of China as the rest of world. But its not coincidence when ‘shadow shogun’ Ozawa brings himself and 146 members of the Diet to China, one day after the governments of the United States and Japan call off talks on the Futenma situation, smiling and shaking hands with Hu Jintao. Just yesterday, Ozawa made demands to meet Obama during his US visit- again, not coincidence.

    Anyone who follows U.S. Asian policy can see the obvious developments here. Okinawa and China is the big issue, this Toyota situation has gotten caught in the middle- the ‘toy’ota being returned/confiscated from the child if you will.

    There are bigger issues involved then Toyota, and all parties know this. Okinawa is crucial for establishing American air dominance in Asia, its located 380 miles from Taiwan, and 500 miles from mainland China. Guam is 1,700 miles from Taiwan (and Guam doesn’t want them either). Keeping the base in Okinawa keeps China constantly on the defensive, the resources it spends on military development will focus more on defensive capabilities knowing the US can strike at its whim rather then on offensive capabilities.

    Japan may very well sacrifice Toyota and let them be lynched-publicly for a better base deal, most of the damage has already been done after-all. We’ll need to see what developments there are on the Okinawa situation.

    Reuters has already reported on the role of Toyota and Politics that is currently transpiring:

    Roger Cohen has a good op-ed piece on the Japan-US situation that has been brewing:

  • avatar

    When American energy companies encounter a serious problem in foreign nations, our own government takes a direct interest. Likewise with the Japanese and Toyota/export manufacturing in general. They aren’t initiating talks out of fear of a broad “trade war” breaking out, or because they think the US is leveraging against Toyota because of conflict of interest (although it is proper and good to note that conflict in every discussion of this matter).

    “odd amount of highest level governmental involvement with this issue”

    No. This is a typical reaction. In fact, when a major pharmaceutical product goes tits up + a body count, the reaction is much stronger, and criminal investigations are promised by politicians right out of the gates. However, even in those cases they don’t get involved until the media has created a national story out of it.

    “The Okinawa issue had received a lot of play in Japan. In the last weeks, it turned quiet.”

    Again, status quo. I’m guessing that the Japanese government is quiet on this so as to avoid adding to the US media narrative, and if the Japanese media is following it’s because they are chasing other, more relevant, stories.

    • 0 avatar

      >>”When American energy companies encounter a serious problem in foreign nations, our own government takes a direct interest.”

      What do you really believe the “status quo” is when a nation’s energy or military interests are involved? What has history taught us on that subject?

      When Japanese minister of transportation tells Akio Toyoda to go to Washington to meet Congressman and ‘explain himself’ its not without political assurances and not without the lot of diplomatic discussions behind the scenes.

      Let’s also keep in mind, for diplomats to be suddenly speaking this is awful tardy timing. The recalls happened weeks ago, a ‘typical reaction’, as you refer, would have been a response when the story is actually relevant, not when the story was beginning to die down.

      The reality is that these issues don’t exist in a vacuum, least of all when it involves business and politics.

    • 0 avatar

      “these issues don’t exist in a vacuum”

      I would agree with that, but I find the notion that these two situations (Okinawa negotiations and Toyota media scrum) must necessarily have a lot to do with each other to be far fetched. If both were very much on a person’s radar I could understand the impulse to conflate the two, but I can’t just go along with that. That said, I could see how the two could interfere with each other on the margins.

      “The recalls happened weeks ago, a ‘typical reaction’, as you refer, would have been a response when the story is actually relevant, not when the story was beginning to die down.”

      My point was that a “typical reaction” by politicians (to a trusted product owned by millions killing people) can actually be much more severe than this. I don’t think it’s particularly significant that Toyoda is being sent for congressional hearings, or that diplomatic communications are arising beforehand concerning the same. I would fully expect that given Toyota’s close ties with their own nation’s politicians and their importance to domestic industry. As to the timeline, blowback from a product fail like this typically takes years, we’re talking hearings in subcommittee’s, civil suits, DOJ investigations, proposed legislation, election sloganeering…all of it keeping the issue somewhat alive in the press. I don’t think a week constitutes a significant delay. If this whole thing really gains traction I’d expect to see this happen many more times.

  • avatar
    crash sled

    The California Congressional delegation HAS to attack Toyota, for the sin of closing NUMMI. Most of the rest of these political/diplomatic issues are best handled behind closed doors and away from the TV cameras, but Waxman and Issa have to run for reelection come November, so Toyota is gonna get publicly hammered, I suspect. And the congressmen in Tennessee and elsewhere have to run as well, and will be defending Toyota, to protect their constituencies’ interests.

    NHTSA will always be operating under a cloud, ’til the day Government Motors sells its shares and gets the heck out of this industry. I dearly hope our government gets an education out of all this, and the pressures under which that industry struggles to operate. That would be the one saving grace here. Nothing better than having that hardbitten Texas telecom engineer CEO exec you hired telling you the facts of life.

  • avatar
    John Horner

    If I get this right, the thesis of this article is that the US government is making a big deal out of Toyota’s safety problems because it doesn’t want to move the base out of Okinawa.

    You should rename this a Conspiracy Theory Watch.

  • avatar

    If I get this right, the thesis of this article is that the US government is making a big deal out of Toyota’s safety problems because it doesn’t want to move the base out of Okinawa.

    You should rename this a Conspiracy Theory Watch.

    Name it what you will, but the idea that the US is ‘sexing up’ to use a UK term, the Toyota gas pedal issue when it’s a non-issue everywhere else does smack of some sort of political ulterior motive on the part of the US. Now it cannot be proven that there is an Okinawa connection or it’s related to the governments ‘ownership’ of GM/Chrysler but neither can it be proven otherwise. It is however entirely in keeping with the style of the current US administration and there are many precendents for it in any case. It is easy to write stuff off as ‘crazy crackpot conspiracy theories’ just because you don’t happen to like it.

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