Japan rumbles about Toyota pile-on in U.S.

Hans Greimel
Automotive News — February 19, 2010 – 1:49 pm ET 

TOKYO — Japan’s initial shock at Toyota Motor Corp.’s quality and safety lapses is giving way to suspicion that the crisis is ballooning into an American witch hunt.

Outrage in Congress as well as Transportation Secretary Ray LaHood’s promise to “hold Toyota’s feet to the fire” fuel the conspiracy theorists in Japan.

For many, LaHood’s advice to “stop driving” Toyotas was enough proof.

They point out that the U.S. government, the very entity coming down hard on Toyota, is also the biggest shareholder in General Motors Co., Toyota’s top competitor in North America.

The overall impression is that of a hostile United States pressuring Toyota, just as the U.S. government pressures Tokyo on everything from free trade to basing U.S. soldiers here. The ultimate villains, to critics in Japan, are U.S. lawmakers using the recalls as a political soapbox.

“As the midterm election nears, the U.S. government and the Congress are seeking an outlet for voters’ dissatisfaction,” Japan’s Nikkei business daily said. “The target is turning into Toyota.”

Indeed, Japan’s ambassador to the United States reportedly phoned LaHood to request a “coolheaded” investigation into Toyota’s spiraling quality crisis, which has resulted in the recall of 8.5 million vehicles worldwide since last fall.

The fear is that Toyota’s troubles will trigger a wider backlash against all Japanese products.

“Considering that Toyota represents Japan’s corporate identity, a loss in confidence would potentially affect all Japanese products,” the Nikkei said.

Earlier today, Japanese politicians praised Toyota President Akio Toyoda for agreeing to appear before a Feb. 24 congressional hearing on the recalls.

But tellingly, when Japanese pundits urged the Toyota chief to visit the United States, the advice was usually framed in terms of America’s peculiar expectations. Unlike the Japanese, they said, Americans demand that the top man comes out to take the heat.

Japanese politicos also are worried about wider fallout.

Said Masaykui Naoshima, the economy and trade minister: ”We shouldn’t make this issue a political matter between the Japanese and U.S. governments.” But Foreign Minister Katsuya Okada conceded, “It’s not just the problem of one company but a diplomatic issue.”

To be sure, economists are already calculating the damage on this side of the Pacific.

The recalls could sap up to ¥600 billion ($6.59 billion) from Japan’s gross domestic product and slow economic growth by 0.12 percentage points, according to a study by the country’s Daiwa Institute of Research. Even that report assumed an ominous American reaction.

Toyota itself has forecast a global sales decline of 100,000 vehicles because of the recalls.

But Daiwa reckons an American backlash could spill over to all Japanese brands and cut total domestic production of all automakers by up to 300,000 units this year.

You can reach Hans Greimel at hgreimel@crain.com.

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