Mike Tharp: My next car? A Prius

02/27/2010 2:23 AM

02/27/2010 8:10 AM

Toyota is getting hosed.

The spectacle of its CEO, Akio Toyoda, testifying before Congress this week brought to mind the years of American political grandstanding in the '70s and '80s when the Japanese -- and its largest carmaker -- were repeatedly hauled into the diplomatic docket.

Not just companies and industries, but the nation of Japan itself were vilified as outliers, mercantilist predators and threats to U.S. economic security.

Japan bashing became a national blood sport. No elected official ever lost a single vote by attacking Japan. And a country of 125 million people, where I worked as a foreign correspondent for 11 years, became a target with a Rising Sun on its back.

Politicians, labor unions (especially the United Auto Workers) and corporate execs losing market share and consumer confidence to the Japanese blamed an entire population, without fear or favor.

(Last weekend at the fairgrounds, at the memorial for Japanese American internees during World War II, we saw what can happen when such sentiments get out of hand.)

Covering Japan for so long has led to the conclusions in this column.

Has Toyota mismanaged the public perception of its recall of nearly 5 million vehicles this year? Yes. Were there valid defects in some of its vehicles that probably led to their drivers' deaths? U.S. courtrooms will be busy for years trying to answer that product liability question. Could Toyota have done a better job of dealing with the drumbeat of bad news? Without a doubt.

All that said, a few facts may offer more light than the heat now generated by politicians (most of whom have never met a payroll or gotten a nonpublic sector paycheck), Detroit's Big 3 (aka Perksville) and, yes, the media, which thrive on conflict and outfit everyone on camera with a white or a black cowboy hat.

Here's one fact: What carmaker leads the field in total recalls since the feds started keeping stats? Try Ford, with 20 million vehicles, according to Edmunds.com, a well-regarded Internet source of automotive data.

More facts from Edmunds: Toyota ranks 17th-lowest among 20 automakers in the overall number of complaints per vehicle sold. It was the subject of 9.1 percent of complaints from 2001 through Feb. 3 of this year. During that period it sold 13.5 percent of all new cars in the U.S. (Edmunds notes that the numbers didn't rate the reported incidents for their severity.)

And one more fact: the Washington Examiner points out that there's a huge conflict of interest in the U.S. government's role toward Toyota: "The federal government is itself the controlling owner of General Motors. ... There is no creditable way to separate federal policy decisions from their commercial effect on both Toyota and GM as long as the government is simultaneously prosecutor, judge and jury."

Twenty years ago, I interviewed Eiji Toyoda, Akio's father, for The Wall Street Journal. Back then the issue was whether the Japanese should build cars in the U.S. By employing Americans to work in Japanese factories, the reasoning went, Toyota and other Japanese carmakers could relieve some of the protectionist pressure mounting against them. The CEO told me that Toyota would build U.S. plants only if they were "commercially feasible."

As we now know, it did. Toyota's total U.S. investment has reached $17 billion. It set up 10 manufacturing plants in eight states. It employs more than 35,000 Americans here. More than 1,400 of its dealerships employ more than 115,000 people. And, according to the company's Web site, since 1991 Toyota has given away more than $464 million in philanthropic causes.

Twice I visited Toyota-shi (city) outside Nagoya. I saw the now famous kaizen system of constant improvement/zero defects. I saw the now famous just-in-time inventory process, keeping only those parts on hand needed right away. I saw a diorama of robots Isaac Asimov would embrace. I met workers who could stop whole assembly lines by themselves if they saw anything out of whack.

Toyota City ain't Tokyo. Just as Detroit ain't New York, L.A., or Washington. It's countryside. A lot of Toyota folks speak Osaka-ben, with an accent as different from Tokyoites as East Coast inflections are from a Texas twang. The traditional greeting wasn't Ohayo gozaimasu, good morning, as in Tokyo, but Mokari makka, are you making money?

In the mid-'80s, after Toyota built production plants in the U.S., I wrote a story about the NUMMI plant in Fremont, which has recently closed. (Picketers protesting the shutdown of the Toyota/General Motors joint venture have piled on in Modesto and elsewhere to capitalize on Toyota's present problems.)

Right after the plant opened, though, Americans were glad to see that Japanese managers ate in the same cafeteria. No special parking spots. Everybody wore the same uniform. The top executive salaries were only about 18 times those of line workers; in Detroit, it could reach 300 times that of a blue-collar guy attaching a bumper.

But Toyota closed the plant because it was no longer "commercially feasible," as Eiji Toyoda said two decades ago. In its latest fiscal year, the company lost $5.55 billion -- its first annual loss since 1950!

Toyota isn't a widows-and-orphans fund. It makes cars and trucks to make money. Its first priority is to its workers, then contractors, subcontractors and suppliers, then customers, finally shareholders. At U.S. corporations, that hierarchy is reversed.

Wednesday I drove my Corolla to Merced Toyota (I had also owned a Camry, which I gave to my son Nao). I wanted to talk with John Bissot, the manager. He was out. Under corporate orders, nobody could talk to the press. I was referred to an 800 number (331-4331) where a velvety female voice offered dozens of options to a caller, none useful to a reporter.

But I did learn that Merced Toyota sells 70-80 percent of its vehicles to people who already own Toyotas. That nine out of 10 owners affected by the recent recalls have come in, didn't raise hell and got their rig fixed in 60 or 70 minutes. That many of them said they'd keep buying Toyotas.

The point is this: for decades Toyota has provided American consumers with reliable and affordable vehicles. As with any megacorporation operating in more than 100 countries it sometimes makes mistakes. Now Toyota has owned up to its mistakes and will try to make amends.

That's called capitalism. And accountability.

It's at times like these I miss our late columnist and my friend Bob Sharp. Twice president of the American Chamber of Commerce in Japan, a leading international banker, Bob offered a voice of reason when the baying of simpletons threatened to get out of hand against Japan. He'd do the same again today, were he still with us.

He'd point out, for example, that Japan holds the largest pool of U.S. Treasury securities, $769 billion, with China second at $755 billion. The Japanese, in short, prop us up while we spend ourselves into ever deeper deficits and debt. So far, they haven't called us on it.

So far.

Meantime, my next car -- from Merced Toyota -- will be a Prius.

Executive Editor Mike Tharp can be reached at (209) 385-2456 or mtharp@mercedsun-star.com.

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