Toyota Offers Very Public Remorse for Financial Results
And just about everything else…
By Brendan Moore
A contrite and embarrassed Akio Toyoda, president of Toyota and grandson of the company’s founder, offered up a surprising and sobering assessment of Toyota’s current problems and its future prospects this morning in Tokyo.
In a somewhat rambling briefing given to reporters at the Japanese Press Club, the 53 year-old Toyoda gave a decidedly downbeat overview of Toyota.
“Toyota”, he stated, is “grasping for salvation”. Immediately before that statement, Toyoda had claimed that Toyota was wholly unprepared for the current economic free-fall, and now is a single step away from “capitulation to irrelevance or death”.
Toyoda’s remarks are somewhat puzzling given that Toyota is in far, far better financial shape than most other auto manufacturers. The company expects a $5 billion USD loss for the fiscal year that will end in March, but has a good product line-up, ample cash reserves, healthy lines of credit, and, is well-positioned to prosper when the global economic crunch finally ends.
But that wasn’t all that was on Toyoda’s mind this morning. The curious self-contrition didn’t end there.
In short order, Toyoda apologized for the loss of four lives when a Lexus crashed recently in Arizona, probably when a factory floor mat got jammed with the accelerator. Toyota is almost certainly facing a US recall of 3.8 million cars as a result, which would be the largest recall ever of Toyota vehicles.
Toyoda apologized for the size of Toyota, saying the company had grown too large. He apologized for the drop in quality of Toyota vehicles. He apologized to the people of California for closing the NUMMI plant there. He apologized to young people in Japan and elsewhere for not making more interesting cars. He apologized to the tax authorities in Japan for paying less taxes since Toyota is making less money now. He apologized for having to lay off temporary workers in Japan.
He stated that Toyota would welcome an extension of Japan’s version of Cash For Clunkers, which has sharply driven up sales of the Prius, and then apologized, more or less, for bringing up the subject of government aid to carmakers.
Toyoda, in an oblique way, even apologized for the yen being so strong against the US dollar lately, which, as far as we know, is not within Toyota’s power to determine.
Mr. Toyoda alluded to the book, How the Mighty Fall, by Jim Collins, when talking about Toyota’s current difficulties today, and seems preoccupied with the five stages of corporate decline delineated in the book. Stage four, according to the book, is, “grasping for salvation”, the term Toyoda used to describe Toyota’s current state.
Japan’s culture honors the act of apology, but even people in Japan seem to have been taken aback by the amount of self-flagellation Toyoda displayed this morning.
Perhaps it was his way of issuing a wake-up call to the troops at Toyota; perhaps it was spontaneous and genuine, or, perhaps some combination of both.
Near the end of the briefing, Toyoda said the 72-year old auto manufacturing company will “need to groom young people to be making cars for the next 100 years. The salvation for the company isn’t me.”
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