http://dealbook.blogs.nytimes.com/2010/02/23/toyotas-growing-legal-problems/?emc=eta1
http://online.wsj.com/article_email/SB10001424052748704479404575087001494145936-lMyQjAxMTAwMDIwNTEyNDUyWj.html
We had an opportunity to catch a substantial portion of Akio Toyoda's testimony yesterday before Congress and then to see him on "Larry King" last night.
He was what Toyota needed but there was something disquieting about the situation: the Congressmen and Congresswomen (for the most part) lacked the dignity and courtesy that Mr. Toyoda exhibited. Many asked the same questions, just in a different way. My overall impression was that those who weren't pandering to him because they have Toyota plants or dealers in their districts were trying to show how "tough" they could be without really understanding what the man was trying to say. One Congressman was intent upon saying how embarassing a presentaion was that Toyota had put into evidence, but he was so inarticulate about it that we lost track (and, it looked like he did too) of "why" Toyota should be embarrassed.
What Mr. Toyoda did say was that Toyota has been unable to replicate the situations of unintended acceleration (UA) that have caused a tragic loss of life. Toyota is recalling cars and replacing "sticky pedals" while installing brake override systems but the company has been unable to replicate the UA situations that have been attributed to EMI (electromagnetic interference). It was not noticeable that Congress heard him on that point because there appeared to be a lot posturing with predetermined questions without a lot of listening to his answers.
One point made by the Congresswoman from San Francisco: she wanted to hear Mr. Toyoda say that his company would never "blame" the customer again. He so stipulated. This went directly to the testimony of the widow from Tennessee the day before.
It would be fair to say that Mr. Toyoda, overall, summarized his company's situation as having lost sight of the customer and outgrown its engineering resources.
Given this, Mr. Toyoda's response (and that of his colleague, the president of Toyota North America), on the question of why recalls that were done in Europe in 2008 weren't shadowed in the U.S., was disquieting. Two different answers: first, the U.S. operation didn't know, and second, that there are different, smaller cars in Europe so they thought the situation didn't connect. The first answer, if true, reflects an excessive level of compartmentalization, at best. A very bad case of "Silos". The second answer reflects a basic level of incompetence that's hard to believe.
Later in the evening, Mr. Toyoda appeared on "Larry King Live". We were impressed with how well King treated him and the room that King gave him to say what he (Toyoda) wanted to say. Unlike Congress. When King asked Mr. Toyoda whether he felt Congress treated him fairly, Toyoda's response was not to be critical at all.
On the same day as Mr. Toyoda was testifying, U.S., Japanese and European investigators raided the offices of auto-parts suppliers tied to Toyota stemming from a probe of anticompetitive practices: "cartel conduct of automotive electronic component suppliers." This would be additive to Congressional, Regulatory (SEC), criminal and civil investigations of Toyota directly. Because of the law suits that have been initiated, there were certain questions that Mr. Toyota could not answer yesterday but he was, all things considered, as straightforward as he could be. It is, perhaps, unprecedented that a vehicle recall is also the subject of a criminal investigation.
We understand that the potential focus of the criminal investigation is whether Toyota made complete and truthful disclosure to the N.H.T.S.A regarding the unintended acceleration and brake problems in its vehicles.
However this entire situation turns out, Toyota "was" the best car company in the world and can be again once all of these issues are resolved.
Akio Toyoda is doing his best and we are hopeful that that is enough.
Subscribe to:
Post Comments (Atom)
This is where I struggle with excessive regulation. I would argue that Toyota has a history of putting out a quality product, and honestly didn't need the government to step in and tell them to clean up their act. It's not as if this criminal investigation is going to change anything that they are doing.
ReplyDeleteLet's assume Toyota really is "criminal" (by the government definition). Then what? Let's say no government intervention happens. Then the end consumer just stops buying Toyota's vehicles. Heck, it's what happened with Ford and GM! They put out a crappy product, and people stopped buying it for a better product.
Listen, if the government needs to thump their chest and show how powerful they are over businesses, go do out, but remember that you're wasting taxpayer dollars to do all this. Free markets will fix Toyota's issues, whether it be Toyota wanting to live up to its standards and protect its brand equity, or consumers stop buying Toyota vehicles and they go out of business (as CERTAIN car manufacturers have shown us is very possible).
All this was to me is a show that the government put on to thump their chests and look down upon "big bad business." I mean, they've already shown they're willing to blame GM's failure on "big bad banks" (see http://bit.ly/aYnp5l). Go show that you know how to fix GM (which our tax dollars are invested in), and then you can tell us how to fix Toyota.