February 6, 2010 in Business

Toyota chief apologizes for recalls

First public appearance after week of silence may hurt image
Tomoko A. Hosaka Associated Press
 
Associated Press photo

Toyota Motor Corp. President Akio Toyoda appears at a news conference in Nagoya, Japan, Friday.
(Full-size photo)

TOKYO – After a week of silence, the boss of the world’s No. 1 automaker finally appeared in public Friday to apologize over massive car recalls, but it may not help stall Toyota’s escalating public relations crisis.

Akio Toyoda, the automaker’s 53-year-old president and CEO, held his first news conference since the Japanese company announced a recall for faulty gas pedals on Jan. 21 affecting 4.5 million vehicles. At a hastily called briefing Friday night at the company’s Nagoya headquarters, he was grilled by reporters wanting to know why he finally came forward.

“I wanted to tell customers directly through the media that they are the first priority,” he said after apologizing but defending his decision to rely on deputies thus far to speak on Toyota’s behalf.

“Whether it’s myself or my vice presidents, we as Toyota operate with one voice.”

His only public comment until Friday had been a brief, impromptu interview last week with Japanese broadcaster NHK on the sidelines of the World Economic Forum in Davos, Switzerland.

His silence otherwise grew louder by the day, along with concerns his absence was exacerbating Toyota’s woes which now include brake problems with its Prius hybrid – the crown jewel in the automaker’s vehicle lineup.

Once dubbed the “prince” by local media, a new nickname for Toyoda had been catching on: No-show Akio.

But for some analysts, Toyoda’s Friday-night performance came too late.

“He should have come out a week ago,” said Masaaki Sato, an auto industry expert and author, during an appearance on a popular late night news program following the news conference. “He should have been in the U.S. rather than Davos.”

Sherman Abe, a business professor at Hitotsubashi University in Tokyo, also wonders why it took so long.

“Toyota seems to be a typical Japanese company wanting to get all the facts before reacting,” said Abe, professor at Hitotsubashi’s Graduate School of International Corporate Strategy. “But when you have a crisis, you can’t handle it successfully that way. The longer you wait, the more damage it does to your credibility.”

Toyoda’s formal appointment last June came with high hopes that the charismatic, internationally-minded “prince” could restore Toyota’s profits and mojo after a battering by the global economic downturn. At the time, he pledged to take the company back to basics and refocus on quality.

Toyoda and his handlers seem to have forgotten that the rest of the world was listening. Pressed for a comment in English, he stumbled through his words, with no prepared remarks to guide him.

“Should you have acted more quickly?” a reporter asked in English.

“I will do my best,” Toyoda responded.

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