When Toyota founder's grandson inherited the throne, the company was in the red, for the first time in its history as a public company. But I was a bit cynical, believing that they were playing dead, and thought that they would come out miraculously quickly. My attitude came from the fact that I know through my friends at Toyota how carefully Akio was protected and nurtured. I thought they would NEVER put Akio in the CEO position in such an environment, unless they knew for sure that they would turn around quickly, so Akio would become a super hero.
See my Jan 09 blog entry here:
Just about a year has passed since this announcement, and for sure the company's financial is expected to show a good recovery this fiscal year, but things do not seem too great in Toyota lately.
This morning, I heard a news on TV that Akio finally appeared in public, first time in 2 weeks since the recall problem started to go around. No video image was shown on TV - the press conference was held in Nagoya, Japan, and looks like the image was not widely available for the U.S. press.
It looks strange to me. I worked for Honda in the 80's, and even then, I learned that auto companies were VERY sensitive about such product quality issues, particularly for the U.S. market, where consumer rights are bigger than anywhere else and is the largest auto market in the world. So I have to assume that peole in the quality assurance and P.R. in Toyota must know how IMPORTANT it is, to take a quick damage control in such circumstances. And it is a common sense that the very top person should appear publicly as soon as the danger is found and show the public that he is taking care of it.
There is a conspiracy theory going around on the Japanese Net that the U.S. government (particularly LaHood) and the U.S. press are treating Toyota unfairly, compared to their U.S. counterparts on the similar situation. U.S. auto companies are getting a huge financial help from the U.S. government, the theory goes, and the government/press want to beat up Toyota to help sales of GM and Ford. OK, so what? Japanese auto makers have been dealing with such a situation since 1970's. That is the reality of this world, and they know how to deal with it. Right?
But a doubt has started to creep in to my belief in Toyota's invincibility lately. I wrote a small column on Nikkei Communication Feb.15 issue about IT and US auto makers. I wrote it in early January, right after Ford announced its MyFord Touch. In it, Ford CEO Alan Mulally calls himself "your fellow geek", and stressed that the new Ford IT system is based on Silicon Valley-style open architecture. I was really impressed by that quote, and added a few facts about Tesla, a Silicon Valley-based electric car venture, to write a new trend in the U.S. auto industry.
I was shocked to watch the 2006 documentary movie "Who Killed the Electric Car?", and at that point in the Bush era, I had an impression that the auto companies in the U.S. (including Japanese cars) were getting lots of influence from the oil industry, and the oid-industry-supported government. Now that the administration changed, maybe the whole power balance has shifted. Obama is close to Eric Shmidt, CEO of Google, and the current government may be positioning Silicon Valley as their "strength", rather than "traitors" which destroys the current industry order and the job market in elsewhere in the U.S. So that was my conclusion of my small column.
These days, when I watch Toyota's news, another concern creeps into my mind. I read a 2006 Japanese book on the demise of the Japanese electronic industry, written by Fumiaki Sato, and there, he was comparing the auto industry and electronic industry. Back then, GM was still bigger than toyota, and he says that it is important for Toyota to keep them alive and continue to be positioned as No. 2, rather than becoming the very top and destroying GM. Because then-inefficient GM was putting high prices, backed by their price leadership position, and Toyota could enjoy a fat margin based on that high market price. Sato says that in the electronic industry, such "wind shield" was lost by destroying the U.S. manufacturers altogether, and the unlimited cut-throat competition ultimately brought the success of Korea, Taiwan and China, rather than the high-cost Japan. So, it is quite symbolic that Toyota surpassed GM in terms of the numbers of cars sold and GM went into bankruptcy, when Toyota started to send out yellow signals.
Prof. Satoshi Matsubara at Toyo University was very active on Twitter today, about his negative views of Toyota as well as his support of electric cars. In fact, Toyota was not very enthusiastic about electric cars, and instead, they have built their leadership in hybrid cars. Prof. Matsubara speculates that it is because electric vehicle destroys the whole ecosystem of auto industry, from the parts manufacturers to the gas stations. It is a typical "disruptive technology" described in "Innovator's Dilemma". Toyota has been treated as the "eco" champion with Prius, but it actually may be just an effort to keep the status quo alive.
I have been following Tesla closely for the past 2 years or so. I am aware that there are too many problems with that company, but I have been feeling quite awkward that Japanese press has been totally ignoring it. It can become a part of this disruptive technology which may in the long run threaten the pillar of Japanese economy, Toyota and Japanese industry. I imagine many people would be more interested in what is going on in that front, but looks like nobody has cared, at least so far. I proposed a publisher that I write a book about Tesla early last year, and they were kinda half-hearted. It was good that I didn't, because nobody would have bought my book. Is it just me, or is it yet another example of "paradaisu sakoku (seclusion in paradise)" symptom?
I support the opinion of Prof. Matsubara, that they should consider electric cars more seriously and do away with all the negative myth about it. I also sympathize him on his concerns about Toyota's recent direction.
What is going on in Toyota now? Japan's economy depends on Toyota and auto industry so much. And I have too many friends at Toyota. I hope my concerns are just my imagination, and that they know what they are doing.