Toyota CEO: We'll Decentralize - TheStreet

Toyota CEO: We'll Decentralize

Toyota CEO Akio Toyoda (above left) tells a congressional committee that other countries' executives will have far more say going forward.
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WASHINGTON (

TheStreet

) -- CEO Akio Toyoda said

Toyota

(TM) - Get Report

will expand its decision-making on recalls and defects so that other areas of the world besides Japan can weigh in.

"Up to now, any decision on recalls has been made by a division in Japan," Toyoda told the House Committee on Oversight and Government Reform on Wednesday. "However, reflecting on the issues today, what we lacked was the customer perspective (so that) customer voices around the world will reach our management in a timely manner." Toyota said each region will be able to make decisions as necessary.

Toyota President and CEO Akio Toyoda, left, and president and CEO of Toyota Motor North America Yoshimi Inaba testify on Capitol Hill Wednesday before the House Committee on Oversight and Government.

Toyoda, who took over in July as CEO of the company his grandfather founded, also said he will establish a committee on global quality, which he personally will head, with the first meeting scheduled for March 30. "The U.S. and other parts of the world will be represented," he said. "We are now introducing this system so we really face up to this problem openly and transparently." Additionally, Toyota will establish a center of quality in the U.S.

Toyoda apologized several times. Initially, he read a statement in English, but he subsequently answered questions in Japanese, and a translator furiously wrote his remarks before responding in English.

Asked whether he has any knowledge that a flaw in the electronic system led to incidents of sudden acceleration, Toyoda said Toyota engineers have been unable to find such a flaw. "I have no question with respect to the integrity of our (electronic) system," he said.

"Accidents actually happened, and therefore I instructed that every effort be made to reproduce and duplicate the accidents," he said. "However, no malfunction or problems were identified." He said he first became familiar with the problems shortly after becoming president.

While treated courteously by the committee members, Toyoda and Yoshimi Inaba, CEO of Toyota Motor North America faced a series of ough questions, but at times language problems diminished their ability to respond. In one case, D.C. Delegate Eleanor Holmes Norton asked whether any chance exists that her Camry hybrid would be recalled. When Inaba mentioned that "It is an American car," seeming to want to indicate that the company has a major presence in the U.S ,Holmes questioned whether he sought to imply that U.S.-made cars are superior, a point that Inaba did not seem to follow.

Questioned about the internal Toyota memo that characterizes the Obama administration as "not industry friendly," Toyoda indicated it was part of the preparation for Toyota's congressional appearances, but said "I do not know the background of this document." Inaba said "this does not represent my feeling today - I would like to build a good relationship with NHTSA." He also noted that he is viewed in Tokyo as "half American, half Japanese."

Earlier, Secretary of Transportation Ray LaHood told the committee that Toyota by then "became a little safety deaf." He said that Toyota has "some very good people in North America, (but) they may not have always been communicated (with) or heard in Japan."

Transportation Secretary Ray LaHood

Toyoda's agreement to appear before the committee "has been a game changer," LaHood said. "I do think the fact that Mr. Toyoda is here, he's testifying, he's willing to answer questions (shows) things have changed."

Asked by Norton what happened to Toyota, once viewed as a company fully committed to reliability and safety, LaHood responded, "On the safety side, they became a little bit safety deaf. ... I also believe their business model for communicating between North America and Japan needs some change."

Said Norton: "Meaning that Japan calls the shots?"

Responded LaHood, "They need to listen to one another and hear what one another are saying." On Wednesday, Jim Lentz, Toyota's U.S. president, told the House Subcommittee on Oversight and Investigations that U.S. executives will now have an

enhanced role on Toyota's defect committee in Japan.

Despite Toyota's earlier assurances that its sudden acceleration problems will be addressed in U.S. recalls of 5.6 million vehicles to fix floor mats and sticky accelerators, LaHood said the National Highway Transportation Safety Administration is looking at the role of electronics in the problem, which has led to more than 2,200 complaints and about three dozen deaths.

"We're going to have a complete review on the electronics," LaHood said. "There are people who believe there are electronic problems with Toyota -- that's why we're going to do a review. ... We're going to go into the weeds on this." He also said that the owners of cars on the recall list need to take the cars to the dealer for repairs because "We determined that they are not safe."

-- Written by Ted Reed in Charlotte, N.C.

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