If you ever wanted to see the dark side of global business and the pathetic face of its leadership, you would look no further than the testimony today by James E. Lentz, President of Toyota U.S., before the House Energy and Commerce Committee. He admitted the American operation is really a branch plant; all the key decisions about design and safety take place in Japan. We made an observation about shortcomings in Toyota’s corporate structure in an earlier posting.
What is most astonishing, at a time when consumer confidence is already in short supply, is that Toyota’s top man in America refused to offer any assurances that the company had gotten to the bottom of the problems involving unintended acceleration and that the right fix was being made. Toyota has had not weeks, not months, but years to solve this problem. Today was not the day to come before the American public and say the company is still searching for the answer.
Time and again, Mr. Lentz admitted that he did not know the specific answers to the questions posed by lawmakers. What is most striking about his testimony is that he could not be bothered to check out the findings of Toyota’s highest profile crashes, some of which led to multiple deaths. “I just don’t have those specifics” was how he responded in question after question. When Rep. John Dingell (D-MI) asked Mr. Lentz when Toyota “first became aware of incidents of sudden acceleration in its vehicles sold in the U.S.,” his response was a jaw-dropping “I don’t know the answer to that.” Not an impressive reply to the dean of the House of Representatives, who a competently briefed and prepared witness might have anticipated would have some hard-hitting questions, especially since he’s represented the 15th Congressional District in Michigan since 1955. It would be difficult to imagine how someone just beginning their career at Toyota U.S. could have given a less inspiring performance than its current head.
Mr. Lentz testified that he was really a marketing and sales kind of guy. That may be part of the problem. It’s a little like Don Draper of Mad Men fame going before Congress to give testimony about sexual harassment in the workplace.
If this is the best Toyota can come up with at this time of maximum peril to its brand, the future of the company and the lives of its customers are in serious jeopardy. Those of us who are long-time owners of Toyota and Lexus products might already have noticed that the company’s dealer network in North America long ago began to show signs of GM-like hubris. It relegates its customers to a call center approach in dealing with problems, which generally begins with a not-so-subtle reminder that they don’t really matter that much in the scheme of such a successful global corporation. Many Toyota customers are left to ask where exactly is the service premium you receive for paying a premium price over GM and Ford vehicles. Some of us who are Lexus customers wonder the same thing, especially when it can take three weeks for a service appointment to be scheduled. And at Lexus, you can still buy a car and never hear from the salesman again after taking delivery, which these days is a hard trick for even GM to pull off.
Mr. Lentz made an interesting comment in response to the Representative from the 9th Congressional District of Illinois, who also raised questions about Lexus acceleration problems and the treatment of those customers. He said he was very disappointed to hear about how they had been handled, “especially on the Lexus side of the business.” Toyota customers might find it a little unsettling that their lives and vehicle investments are somehow valued less than those of Lexus owners.
What the testimony today showed was that Toyota does not have an engineering issue. The real problem is not in the car. It’s in the outdated, outmoded and discredited culture and governance of a company headquartered half a world away. We will have more on that later.