Tags: Toyota | Recall

Japan Fears That Toyota Woes Will Hurt U.S. Ties

Friday, 12 Feb 2010 11:25 AM

 

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As pressure intensifies for Toyota's chief to testify before Congress about the automaker's safety lapses, Japanese political leaders and experts worry that the problem — if handled poorly — could damage ties between the two nations.

Relations between Washington and Tokyo are already strained by a dispute between the two governments over the relocation of a key U.S. Marine base on the southern island of Okinawa.

Political tension rose a notch Thursday when a Republican in the House of Representatives said he would support issuing a subpoena to compel Toyota President Akio Toyoda to appear before congressional committees later this month to examine the company's string of safety problems.

Toyota said Toyoda is expected to visit the U.S. in early March, but the company declined to confirm Japanese media reports that he would attend the Washington hearings. Toyota's North American head, Yoshimi Inaba, will appear before the committees, the company said.

Even before the world's biggest automaker announced its latest recall Tuesday of nearly 440,000 Prius and other hybrids, bringing its global total to 8.5 million vehicles for faulty gas pedals and brakes, Foreign Minister Katsuya Okada expressed concern about that the problem could become a political headache.

"I'm worried," Okada said last Friday. "It's not just the problem of one company but a diplomatic issue," noting that the fiasco comes at a particularly difficult time for the automobile industry, including General Motors Corp.'s bankruptcy filing.

Japan has also been criticized for its tax incentive program for "green" cars that Washington said unfairly excluded American vehicles. The program has since been expanded to include more U.S. cars.

So far, there's no sign that Toyota's recall has become a contentious issue between the Obama administration and the Tokyo government.

But it could become prickly if the hearings in Washington go badly — if, for example, Toyota executives come across as aloof or U.S. politicians come down in a way perceived in Japan as excessively harsh.

"This is Toyota's problem, but if it's mishandled, it could spread to other areas," said Yoshinobu Yamamoto, professor of international relations at Aoyama University in Tokyo.

To demonstrate responsibility, Toyoda himself needs to appear before the congressional committees, experts say. He also plays a key role as the representative of Japan Inc.'s flagship company.

"The final authority needs to be there and explain the situation and say what the company is doing to resolve the problems," said Yamamoto.

Economy and trade minister Masayuki Naoshima urged Toyoda to at least make a public appearance in the United States — Toyota's biggest market.

"The head of the company needs to give an explanation properly (in the U.S.)," he said.

The recall problems have erupted at a time when Tokyo's ties with Washington have soured under the new government of Prime Minister Yukio Hatoyama, which swept into power last year after decades of rule by the staunchly pro-U.S. conservatives.

Hatoyama has put on hold a plan to relocate Futenma Marine airfield to a northern part of Okinawa island because of local opposition and environmental concerns, thereby delaying a broader plan to reorganize the 47,000 American troops based in the country under a security pact.

But Tsuneo Watanabe, a senior fellow at the Tokyo Foundation, predicts that leaders in both governments will remain levelheaded, not wanting to see a revival of the trade wars of the 1980s and '90s.

"Both sides recognize the importance of the security relationship and don't want to upset that," he said.

The governors of four U.S. states that are home to Toyota manufacturing plants defended the company Wednesday in a letter to the leaders of the two House committees and asked that Toyota get "a responsible and fair response from the federal government." It was signed by the governors of Alabama, Indiana, Kentucky and Mississippi.

The governors said the federal government had an "obvious conflict of interest because of its huge financial stake in some of Toyota's competitors" — a likely reference to the U.S. government's 60.8 percent stake in GM following its bankruptcy reorganization.

Japanese — while surprised by Toyota's quality problems — have voiced similar suspicions and wonder if the timing of Toyota's woes have anything to do with it overtaking GM as the world's biggest automaker in 2008. Some see a new wave of Japan-bashing that periodically cropped up in the '80s during Japan's rapid expansion into the U.S. market.

Comments by Transportation Secretary Ray LaHood telling drivers of recalled Toyota cars to leave them parked — which he later retracted — also fed into this.

The confluence of events "does present a very good opportunity for conspiracy theories," said Koichi Nakano, a political science professor at Sophia University in Tokyo.

To be sure, Japan's political leaders also have been critical of Toyota's handling of the safety problems.

And this week, Toyota appears to be taking steps to win back consumer trust.

On Friday, the automaker said it plans to voluntarily disclose problems beyond what the automaker is legally required to reveal. Details of the plan for more openness would be announced in the future.

"We're trying to be proactive," said spokeswoman Ririko Takeuchi. "Some consumers are worried, so even if the information doesn't rise to the level of a recall, we are taking this step to restore the company's credibility."

Even the company's decision this week to recall the Prius — its showcase "green" car — signals that it is serious about fixing its image, analysts said. In the past, the problem — a glitch in the antilock brake that can be easily remedied by reprogramming the computerized braking system — may have been dealt with through a service campaign that notifies owners to get a fix done at their convenience.

Toyota also declined to accept a Japanese government energy efficiency award given to its Prius, saying the honor is not appropriate for a car hit by massive recalls.

In Washington, pressure is building for Toyoda to make an appearance in front of the House Oversight Committee on Feb. 24 and the House Energy and Commerce Committee on Feb. 25.

Rep. Darrell Issa of California, the top Republican on the Oversight Committee, said Thursday that Toyoda should meet with lawmakers and said that if necessary Congress should compel Toyoda's testimony.

"If we are not receiving the cooperation and transparency this committee and the American people are demanding from Toyota, I would fully support the issuance of a subpoena," Issa said.

The Nikkei, Japan's leading financial paper, urged Toyota to resolve the matter quickly, warning of what it perceived as rising protectionism in the U.S. ahead of midterm elections.

Transport Minister Seiji Maehara echoed that concern in comments after he met with U.S. Ambassador John Roos on Wednesday to discuss the issue — which both men said shouldn't affect their countries' ties.

"A problem like this shouldn't hurt our bilateral relationship or damage our free and fair market activity," said Maehara. "It's not in our national interest."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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