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Toyoda, Toyota, Congress and the FBI

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The FBI raided three Toyota suppliers in the US yesterday (Yazaki, Denso and Tokai Rika) in an antitrust investigation, and things weren't any better for Toyota in Washington's vast corridors.

In exchanges marked by cultural and language confusion, anger and apparent evasiveness, Toyota's worldwide President and CEO, Akio Toyoda, and COO of Toyota North America and head of Toyota Motor Sales USA Yoshimi Inaba faced the full wrath of a congressional committee investigating Toyota's many safety problems and recalls.

After spending nearly the past 40 years covering the auto industry from Los Angeles, which means a close relationship with all the Japanese makers and spending a lot of time in Japan, I've often joked that Japanese businessmen have 100 ways to say "I don't know" and 1,000 ways to not take responsibility. Those watching the hearings yesterday got about a four-hour example of all that live, in action and with translation provided, presented by Japan's most important car executive and his co-hort.

Shown live in Japan (where it was the start of the working day), the scene was unprecedented and, to me, as strange and shocking as GM going bankrupt and Chrysler being bought by Fiat.

Seemingly most important to many of the inquisitors: What and when the company knew about the many consumer complaints and reports of unintended acceleration, accidents, injuries and deaths and poorly-working anti-lock brake systems going back to at least 2004.

They call him the "The Prince." Since birth, Akio Toyoda has been heir apparent for the company founded by his grandfather.

Toyoda, 53, became CEO of Toyota Motor Corporation in July, 2009. Just the right timing, according to his testimony today, so that he knows nothing about consumer complaints about unintended acceleration and problem brakes, that though top NHTSA officials flew to Tokyo to meet with Toyota management after he took over the company he knew the meeting occurred, but never received a report about it and had no idea what was discussed, while Inaba said he knew nothing of acceleration problems reported in Japan in 2007 which resulted in recalls there because he was busy running the US division.

It became clear after several members grilled the two Japanese on these same points that this is a criminal investigation at heart, with congress intent on showing Toyoda and Inaba were either lying about their lack of knowledge of consumer complaints or, at best, were suffering from severe attacks of selective memory.

In one exchange with Inaba, a member asked him about what's become a notorious internal memo, with his name on it, outlining Toyota's "wins" in avoiding recalls and investigations. Inaba said when this happened he had just become president and COO. A member asked him if he had worked for Toyota before his ascendancy; yes, he said. How long? Forty years. Not exactly new on the job.

Toyota's centralized control in Japan of all worldwide safety and recall issues, with other regions (ie, the US and Europe and China) having no say in the matters will be changed, Toyoda and Inaba said. They also spoke about a worldwide quality and safety board which Toyoda will head, better communications with regions outside Japan and, they emphasized, putting "customer first" by looking at all problems from the customer's perspective.

In his opening remarks, Toyoda said that "I love cars as much as anyone" and that he is a "trained test driver" able to expertly evaluate cars. He said the company's mottoes have always been "Safety, quality and quantity" but during the past decade of the company's rapid growth, "these got confused". He promised a return to the basics.

In Japan, when there are product safety or quality problems, the head of the company will take full responsibility and apologize (which Toyoda did several times today) and that's the end of it. The company moves on, consumers make their decisions about the product, but it's almost unheard of for authorities to dig into the company until some cover-up or mistake or purposeful action which caused the problem is found.

A questioner revealed during the hearing that NY's Attorney General Andrew Cuomo has brokered a deal where Toyota dealers will go to owners' homes to pick-up recalled cars and trucks, fix them and deliver them back to the owner, with Toyota reimbursing the owner for any rental or train or taxi costs incurred while the car was out of service. When Inaba and Toyota were asked if this program will be made national, it was obvious either they were avoiding the question or knew absolutely nothing about it (hard to believe).

When one member tried to find out if the new brake override software will be installed in all affected Toyota vehicles in the US, Toyoda just said, "I don't know."

When another representative talked about how much she likes her Toyota Camry hybrid but doesn't trust it now, Inaba jumped with, "You have an American car!"

Inaba was just trying to promote the fact that Toyota employs 200,000 people in the US (which Toyoda mentioned twice in the first minute of his opening statement) but the exchange was terribly confused and became hostile.

Many members did not like the answers they got today, and had no reluctance telling Toyoda and Inaba just that. One member, trying to be friendly, jokingly told Toyoda, "You can brag about this at home. You've been questioned by a congressional committee!", but it was obvious Toyoda didn't know what to make of that statement.

After the hearings, speaking to a group of Toyota dealers and employees, Toyoda's emotions, not visible during his testimony, overflowed into public tears. We'll find out what Toyoda and Inaba knew and when, but I have to hand it to Akio Toyoda: if he inherited anything from his grandfather, it was guts. He'll return to Japan a hero, even more so than he is already.