Tearful Toyoda apologises; Japan hopes for recovery

Toyota Motor Corp President Akio Toyoda apologised to US lawmakers probing the automaker’s safety record and ended the day in tears, in what Japanese politicians hoped was a first step towards rebuilding trust in the country’s most valuable company.

Toyoda, peppered with questions about a massive recall that has rocked Toyota’s reputation, told lawmakers he was “deeply sorry” for accidents and injuries involving its cars.

He said Toyota had lost its way during a period of fast growth but vowed to steer it back to the values that made it a watchword for quality.

Cheered by Toyota plant workers and dealers at an event organised by the automaker on February 24 in Washington, Toyoda broke into tears under a giant display bearing the name of the company that his legendary grandfather founded.

“I believe that Toyota has always worked for the benefit of the United States,” Toyoda said. “I tried to convey that message from the heart, but whether it was broadly understood or not, I don’t know.”

He also offered a sober assessment of the challenges still ahead: “We at Toyota are at a crossroad. We need to rethink everything about our operation.”

Toyoda’s appearance in Washington marked a dramatic peak in a safety crisis that broke in early January with a series of recalls over unintended acceleration and braking problems that now include more than 8.5 million vehicles globally.

Politicians in Japan are worried about the potential fallout from the crisis. Toyota, with a market value of about $125bn, is at the the heart of a massive supplier network that is vital to the economy’s health.

“It was good that the Toyota president himself appeared before the panel and testified,” Prime Minister Yukio Hatoyama told reporters in Tokyo.

“I don’t think this marks the end of everything. He spoke of working to make improvements. This is a matter involving cars, that affects people’s lives, so the important thing is pay close attention to safety and to fulfil its aim to make improvements where they are needed. I’m hopeful and I think they will do so.”

Japanese Trade Minister Masayuki Naoshima said Toyota’s problems could have an impact on the image of Japanese products and that he wanted the car maker to win back consumer trust.

Electronics probed
The costs of the recall are set to grow with an agreement with New York state to speed customer repairs and provide alternative transportation, a pact likely to expand to other states.

Toyoda’s efforts to reassure US officials and consumers were undercut by a confrontation over a 2009 memo in which Toyota boasts of saving $100m by persuading safety regulators to accept a relatively cheap recall of floor mats implicated in the unintended acceleration.

US Transportation Secretary Ray LaHood, who preceded Toyoda before the committee, simply labeled recalled Toyota vehicles as “not safe.”

Dressed in a gray, pinstriped suit, Toyoda said he, more than anyone, wanted Toyota cars to be safe. “My name is on every car,” he said in English before using an interpreter to answer questions.

But Toyoda rejected the possibility that some of the acceleration problems are in the electronics rather than the recalled sticky accelerator mechanisms and floor mats that can trap the accelerator pedal.

Chris Gidez, director of risk management and crisis communications at Hill & Knowlton, said Toyoda gets points for coming from Japan to testify and judgments will not be made in just one hearing. “This is going to be a marathon for Toyota.”

Five deaths
The unintended acceleration problems have been linked to five US deaths, with 29 other fatality reports being examined by US authorities.

Representative Paul Kanjorski, a Democrat from Pennsylvania, warned Toyoda that his company would have to pay for the deaths and injuries as US lawsuits mount. “You will be called upon to pay compensation,” Kanjorski said.

Republican John Mica, a Florida Republican, called it an embarrassing day for regulators and for Toyota.

“I’m embarrassed for you, sir,” Mica told Toyota’s North American President Yoshimi Inaba, who was testifying with Toyoda. “I’m embarrassed for the thousands of Americans who work at 10 plants across the United States.”

Toyota now faces a criminal investigation and a securities probe in the US as well as unresolved questions about hundreds of incidents of unintended acceleration reported by consumers.

The FBI raided the Detroit operations of three Japanese suppliers of electronic components to the auto industry on February 24. Denso Corp confirmed the raids were unrelated to the Toyota recalls.

Toyota has promised internal reforms, including a new committee on safety chaired by Toyoda himself.

Jim Press, a former North American chief for Toyota who left in 2007, said the company had become dominated by “anti-family, financially oriented pirates” and needed Toyoda at the helm.

“Akio Toyoda is not only up for the job, but he is the only person who can save Toyota,” Press wrote in an email to industry publication Automotive News.

Toyoda, who took just a few questions from reporters, only appeared to relax at the evening rally organised for Toyota dealers and workers.

One woman who works in a Toyota plant in Alabama, building engines, asked what she could do to help the company in its crisis. “Let’s make a better car,” Toyoda said, breaking into English.