Scion a misfit at Toyota helm: expert

Founder's grandson lacks ability to handle firm or crisis, critic Sato tells foreign media

by Yuri Kageyama

The Associated Press

An influential writer with ties to Toyota’s past presidents is calling for a change of leadership at the recall-battered automaker in a letter to editors of major U.S. newspapers.

Masaaki Sato, who wrote about Toyota Motor Corp. for more than 30 years and still keeps in close touch with the automaker’s top leadership, is criticizing President Akio Toyoda as inexperienced and mismanaging the automaker’s response to its recall debacle.

Sato, author of several books on Japan’s auto industry, says the founding fathers of Toyota came from the Toyoda family but were more intent on building a world-class manufacturer that could contribute to society rather than simply running a family business.

To drive home his message, Sato is sending a letter to the editors of major U.S. newspapers, including The New York Times and the Washington Post, bemoaning Toyota’s predicament and urging Toyoda — the grandson of the carmaker’s founder — to step down.

Toyota spokesman Paul Nolasco declined comment.

Toyoda has been widely criticized as slow in responding to the recalls, which have hammered Toyota’s reputation for quality. Toyota has recalled 9 million vehicles globally — the bulk in the U.S. — for a range of problems, including defective gas pedals, faulty floor mats, braking glitches and steering problems. It faces more than 300 lawsuits in the U.S., including those that accuse Toyota in wrongful deaths.

Although direct calls for Toyoda’s resignation have not surfaced within Toyota, Sato’s comments are likely to cause waves within corporate and media circles — coming as it does from such an influential voice in Japanese auto history.

It is unusual in Japan’s consensus-based society for high-profile commentators to stick their necks out with pointed criticism.

In his letter, Sato, 65, a former journalist with the Nikkei financial newspaper, notes Toyota founder Kiichiro Toyoda purposely chose to spell Toyota with a “t” because he wanted the company to be more than just a family business. The Toyota spelling is also generally regarded as more auspicious than Toyoda.

Sato points out in his letter that members of the Toyoda family combined own only about 1 percent of Toyota shares and must prove their managerial skills if they hope to run a publicly listed company.

“Then came the recall problems. The leadership vacuum was exposed, and Toyota’s response to the recalls was criticized as slow,” he wrote. “Akio Toyoda failed to see the coming crisis and did not come up with a concrete response.”

Sato also says that one critical error Akio Toyoda made is turning his back on the past strategy of expansion, which Sato says is necessary for Toyota’s success.

Another is how Toyoda hasn’t worked as a public relations advocate, instead avoiding almost all interviews, especially with the foreign media, he said.

“Akio refused to surround himself with people who may be critical and instead created a one-man setup that would center power in the president,” the letter states.

For the fiscal year that ended March 31, Toyota posted a ¥209 billion profit, a reversal from a ¥437 billion loss in the previous fiscal year after being battered by the global downturn.

It was the automaker’s worst annual red ink since being founded in 1937.