How Japan views Toyota recall woes

In Japan, Toyota recall woes were met first with disbelief and then with an onslaught of criticism from Japanese media outlets more accustomed to eulogizing the 'Toyota way.'

What is good for Toyota, the old saying goes, is good for Japan.

But in the wake of the global recall of 8.5 million cars affected by acceleration and brake problems, that maxim has a decidedly hollow ring to it.

Soon after the failure of Japan Airlines underlined the perils of poor management, rampant expansion, and ruinously cozy ties with the bureaucracy, Japan is only just coming to terms with its latest corporate fiasco.

Around the world, Toyota is now regarded as the sick man of Japan Inc., and its disastrous handling of the recall a symptom of wider unaccountability and arrogance that could hit the country’s exports.

At home, fiercely loyal Japanese drivers are wondering how a firm with a deserved reputation for quality and reliability could allow substandard vehicles to slip through its vaunted quality-control apparatus. Indeed, Toyota has fallen so far, so fast, that for a while Japan was simply in denial, from the Toyota executives who blamed US-made parts and even American drivers, to the pundits who sensed a US-led conspiracy aimed at denting Japan’s export industry.

But the global recall of the Prius hybrid, a model largely manufactured at home, has punctured any sense of defect immunity the Japanese might have once felt. That move pushed the number of cars recalled by Toyota since October to 8.4 million.

“This is obviously not just a technical problem, but a managerial one, too,” says Yukio Noguchi, a finance professor at Waseda University in Tokyo. “Toyota has always seen itself as different from the standard Japanese company. It is stubborn and has absolute confidence in itself. But as we have seen, it is not very good at communicating with its customers.”

Visit to Congress next week

Akio Toyoda, the company’s president, has presided over a public relations debacle that has invited charges of aloofness. That sentiment is strongest in the United States, where Toyota’s US head, Yoshimi Inaba, will attempt to win over customers and politicians during an appearance before a congressional committee next week that will demand the kind of stellar performance for which his firm’s cars were once revered.

Mr. Toyoda has said he will not attend the hearings, although he might reconsider if he is invited specifically by Congress.

On Wednesday, the firm announced plans to improve its quality control apparatus and admitted it had grown “too fast.” But the news Wednesday that the Corolla, the world’s best-selling car, may have steering problems will do nothing to rescue its stateside reputation.

'Lost' decades – and now this?

The mudslinging directed at Toyota over the past fortnight could not have come at a worse time for Japan. It has just entered its third “lost” decade of economic languor, while its manufacturing titans – spanning autos to consumer electronics – are still nursing the bruises inflicted by the global slump.

If that wasn’t bad enough, it can expect to be overtaken by China this year as the world’s second-biggest economy, while its Asian rivals stand ready to exploit a possible consumer backlash against Japanese products.

Whether that happens will depend on Toyota’s ability to quickly right the wrongs of the past few weeks, particularly in the US, where it faces a flurry of lawsuits, a government investigation, and a car industry grateful for the opportunity to engage in a spot of gloating.

Given the special place it occupies in Japan’s national psyche, Toyota’s savaging by the world’s media has been greeted at home with a mixture of embarrassment and suspicion.

Toyota had come to represent the ultimate in the country’s monozukuri [making things] culture. It took on, and beat, its formidable US rivals, dislodging General Motors as the world’s biggest automaker two years ago and establishing itself as the industry’s leader in fuel-efficient car.

Now, the media onslaught that emanated in the US and Europe is being mirrored – albeit in more measured language – by a domestic press more accustomed to eulogizing the “Toyota Way.”

The Asahi Shimbun newspaper described Toyota’s handling of the recall as “obtuse” and accused it of insensitivity toward consumers. “The entire world is watching to see whether Toyota is humbled, learns the lessons from these problems and starts producing safe vehicles again,” the newspaper said.

It would have been unthinkable, in the days when Toyota was raking in record profits and putting GM and Chrysler under severe pressure, for any government minister to take the country’s most iconic company to task, even over safety lapses.

Toyota now fair game

Now, though, politicians consider Toyota fair game. When Seiji Maehara, the transport minister, delivered a mild public rebuke, it was as if a definitive break had been made with the past.

Mizuho Fukushima, the minister for consumer affairs, even accused it of triggering a round of “Japan-bashing” with its haphazard handling of the recalls.

While American manufacturers stand to gain from Toyota’s distress, few in Japan believe the recalls herald a repeat of the trade spats of the 1980s, not least because Toyota’s 300,000-strong global workforce includes 34,000 people employed in the US.

Jeff Kingston, director of Asian Studies at Temple University in Tokyo, is among those who downplayed the potential for diplomatic friction.

“I am not denying that there is a degree of schadenfreude among some people in the US, but this is not about Japan-bashing,” he said. “This is about Toyota not living up to its own standards and selling defective cars that threaten the safety of its customers.”

Mr. Kingston is hopeful, nonetheless, that Toyota and Brand Japan will ride out the storm.

“There is a reservoir of goodwill toward Japanese products in the US, and if they handle this properly, they will take a very expensive hit, but Japan’s image for high-quality products will remain intact.”

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