Yuri Kageyama

Toyota Counting On Veteran at US Congress Hearing

Tokyo. Toyota is counting on a trusted veteran with ample US experience, Yoshimi Inaba, when the Japanese auto manufacturer’s recall problems are scrutinized by Congress later this week.

Inaba, 63, a sales expert, was hand-picked from semi-retirement by Toyota President Akio Toyoda last year to head the North American operations and help steer Toyota through the company’s biggest earnings slump in its 72-year history as global car sales dived.

Now he must explain a spate of safety problems — first with floor mats that could entangle the gas pedal, followed by a design flaw that could cause a depressed gas pedal to get stuck — covering more than seven million vehicles worldwide.

The quality woes have spread to the Prius, the world’s top-selling hybrid car and a symbol of Toyota’s technological prowess. There have been dozens of complaints in Japan and the US of a short delay before the brakes kick in.

Inaba will appear before the US House Committee on Oversight and Government Reform on Wednesday. The name of the hearing: “Toyota Gas Pedals: Is the Public at Risk?”

Inaba, who has an MBA from Northwestern University’s Kellogg School of Business, faces the enormous challenge of assuaging public alarm about what has gone wrong at the manufacturer.

Toyota reiterated on Monday that a fix on the 2010 Prius was coming soon but the company declined to give details.

Japanese news media reported it would be a recall in Japan — higher in urgency than the euphemistic-sounding “safety campaign,” which is used to bring in cars for upgrades.

The braking problem can be fixed with new software, which is already in Prius cars that went on sale since last month, according to Toyota.

More than 100 complaints have been reported in the US over Prius braking, and four crashes and two minor injuries are suspected to be related to the braking problems, according to the US government. Lingering doubts also remain that gas pedal defects may be electronic, not mechanical, as Toyota has claimed.

Experts say Inaba, who headed Toyota’s US sales unit from 1999 until 2003, will need to do a far better job fielding questions in English than did his boss Toyoda when the motor-vehicle manufacturer’s president held his first news conference since the gas pedal recall was announced on Jan. 21.

“The real reckoning will come on Wednesday,” Paul Argenti, Professor of corporate communication at Tuck School of Business at Dartmouth, said of the Congressional hearing, which was set up last month.

“The question will be what kind of responsibility they take when they come under fire with Congress. The jury is still out. This is the kind of stuff that can bring a company down,” he said.

Argenti advises Inaba to stay humble, own up to mistakes, show a convincing plan for a fix and woo customers with discounts and free maintenance service for some years. Toyota may require many years to put the recall problems behind it and rebuild its brand, he said.

Inaba, who joined Toyota in 1968, started out in its sales unit and later worked for five years in Toyota’s European division. He left in 2007 to run an international airport in Nagoya, near Toyota city.

He was brought back in 2009 as president of Toyota Motor North America in one of Toyoda’s first decisions as president.

Masaaki Sato — who has written books on Toyota and has been critical of Toyoda taking too long to publicly address safety concerns — has no doubt Inaba can do better.

“He will probably do a perfectly tactful job, although he is no engineering expert,” Sato said. “He is familiar with American ways.”

Crisis management experts say the message from the top executive is crucial for companies to ride out public relations fiascos. But major Japanese companies, like Toyota, have layers of bureaucracy that can slow down decision-making.

Big Japanese companies have dozens of public relations experts but many lack Western-style crisis-management expertise.

The motor-vehicle manufacturer recently retained Quinn Gillespie and Associates, a well connected, bipartisan lobbying and public affairs company that will help Toyota try to contain the damage in Washington. On its Web site, the company promises to “limit damage to reputation.”

Experts in Japan have been puzzled at Toyota’s muddled response, including how Toyota executives dispensed with the customary deep bow — which is meant to show contrition — at the news conference.

“I don’t see Toyota making any concessions to the customer. There’s not enough humility, not enough ‘Thank you for sticking with us, and here is a freebie for you’ — the kinds of things you would expect a company to be doing when they are under siege,” Argenti said.



Associated Press

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