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Toyota ‘prince’ needs to steer company in crisis
Critics are questioning whether Toyoda is up to the challenges. It’s one thing to lead a company at its peak and another to pull it through such a dire crisis.
To win over a skeptical American public, Phil Baker, a product-development consultant to US and Asian companies, says Toyoda must present specifics on what went wrong. And he needs to be more in control, instead of looking as though he is following advice from those around him. “It’s not a matter of language. It’s a sense of responsibility,” Baker said. Toyota’s piecemeal response to the recall crisis has been baffling, he said. “It makes it worse,” he said. “The disappointment among people in the US is that the company didn’t take the responsibility ensuring their cars were safe.”
Toyoda, 53, known as “the prince” in Japan, said Friday that he plans to testify at a US congressional hearing next week about the automaker’s recalls in the United States. That announcement came just two days after he said he wasn’t going and follows an onslaught of criticism from both the Western and Japanese media about his reluctance to go to Washington.
The chairman of the US House of Representatives Oversight and Government Reform Committee issued the invitation Thursday for the Feb. 24 hearing, and he received Toyoda’s acceptance the same day. By issuing the invitation, the committee had essentially forced Toyoda to testify or face a subpoena. “I am hoping our commitment to the United States and our customers will be understood,” Toyoda told reporters. He said he intended to explain the measures the company has adopted recently to beef up safety controls, which includes a special committee he is heading.
The US government has opened a fresh investigation into Corolla compacts over potential steering problems. Toyota’s earlier recalls have been over sticky gas pedals, floor mats that ensnare accelerators and faulty braking programming.
Toyoda’s earlier decision to send in his place Yoshi Inaba, the head of Toyota’s US operations, to the congressional hearings, as the best person to deal with the questions, was a clear outrage to some Western-style crisis-management experts. “This is the place where you want to have your top guy,” Paul Argenti, Professor of Corporate Communication at Tuck School of Business at Dartmouth, said of the congressional hearings. “If you have a leader who isn’t capable of handling global issues of this magnitude, he probably shouldn’t be in the driver’s seat,” he said.
Toyoda has headed Toyota’s operations in China, and has also served as head of Toyota’s joint venture with General Motors Co., the New United Motor Manufacturing, or NUMMI, plant in Fremont, California, which was ended last year.
He has always voiced humility about his position and played down his influence even as his rise to presidency became imminent. That kind of unpretentious behavior is valued in Japanese corporate culture.
A graduate of Japan’s prestigious Keio University, Toyoda holds a master’s degree in business administration from Babson College in Massachusetts.
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