Skip to main content
Part of complete coverage on

Japan Inc.'s reputation rides on Toyoda

By Kevin Voigt, CNN
Click to play
Who is Akio Toyoda?
  • Political ire toward Toyoda growing in Japan
  • Toyoda at first said he wouldn't attend hearing, then accepted formal invitation
  • Government monitors effects of Toyota's massive recall on Japanese exports

Watch live as the Toyota chief takes to Capitol Hill to answer tough questions. See his testimony at 1 p.m. ET Wednesday on CNN, and the CNN iPhone app.

(CNN) -- As Akio Toyoda prepares to testify before a U.S. congressional committee in Washington on Wednesday, the midnight lights of television sets will glow in corporate offices and government halls in Tokyo.

Riding on the Toyota Motor Corp. chairman's testimony about the automaker's recent run of safety recalls is not just the reputation of his company and his future leading it, but the weight of Japan Inc.

More than 8 million Toyota cars have been recalled in North America, Europe and Asia. Besides three U.S. congressional committees, a grand jury has subpoenaed documents from the company.

In addition, a number of lawsuits have been filed against the company. Legal concerns have been heightened by revelations that U.S. Toyota staffers boasted about negotiating a limited recall on some vehicles that saved the company $100 million.

Political leaders in Tokyo will be watching as the fate of Japan's premier brand falters in the market that Toyota --- and most Japanese exports --- depend most upon.

Full coverage of Toyota recall

Yet also growing in Japan is an undercurrent of conspiracy theories: That the U.S. government, now the majority owner of General Motors, has an interest in bringing down the reputation of the company and its leader.

Video: Towns: 'So long to act?'

"There was a cabdriver who was telling me that the other day, as we were driving in a Toyota," said Jeff Kingston, a professor of Asian studies at Temple University's Japan campus in Tokyo. "There's a conspiracy theory, which some people are inclined to believe, that a nexus of events in the U.S. is making Japan a juicy scapegoat."

Regardless, "the audience here is asking, is Akio going to deliver? He has a lot at stake not to," Kingston said.

"Japan has lived through a 'lost decade,' which is now entering its third decade, and inside this national malaise they could at least bask in the reflective glory of the Toyota Motor Corp.," Kingston said. "All of a sudden, that is at risk."

Indeed, the nation's press is heaping pressure on the shoulders of Toyoda -- the grandson of the company founder who took the reins as Toyota president in June -- to defend Japan Inc. before U.S. legislators and consumers.

"Considering that Toyota represents Japan's corporate identity, a loss in confidence would potentially affect all Japanese products," said a Friday editorial in the Nihon Keizai Shimbun, Japan's equivalent to The Wall Street Journal.

"In testifying before the House committee, we hope Toyoda will take to heart his position as the de facto captain of this nation's manufacturing industry," said a Saturday editorial in the Yomiuri Shimbun, Japan's largest newspaper.

Known as "The Prince" in Japan, the scion of the Toyoda dynasty has stumbled badly in the eyes of the usually deferential Japanese press, after he disappeared from public view for two weeks while the recalls mounted across the globe.

"There were editorials in the Nihon Keizai and Asahi the day after his first press conference basically saying, 'It's a day late and a dollar short -- you've made us look bad before the world,'" Kingston said.

Even Toyoda's decision to appear before Congress was a one-step-forward, two-steps-back process. At first he said he wouldn't attend, then he accepted a formal invitation from the committee --- which only added to the political ire toward Toyoda at home.

"It's a pity that we heard he was going, then he wasn't going, (and) now he is going," said Seiji Maehara, Japan's transport minister.

Considering that Toyota represents Japan's corporate identity, a loss in confidence would potentially affect all Japanese products
--Nihon Keizai Shimbun

Added the Yomiuri editorial: "In the end, Toyoda decided to attend the hearing 'willingly.' But this comes after the carmaker had once decided not to send him. Toyota's initial decision apparently reflected its desire to serve its own interests first and foremost."

The financial crisis both crippled trade and raised the value of the yen in Japan, decreasing profits at home and causing the nation's economy to be among the worst affected by the global recession.

Keisuke Tsumura, parliamentary secretary at the Cabinet Office, said the government is carefully monitoring the effects of Toyota's massive recall on Japanese exports as a whole. "It is a great disappointment" to see slower auto sales in Japan, in addition to the adverse effects of Toyota's safety problem on exports, Tsumura said.

Added Seiji Maehara, minister of land, infrastructure, transport and tourism: "There is a high possibility that Toyota has not firmly revealed some of its information. I would like to further reason the point of how to raise their awareness that Toyota has to give more information to the U.S., even if it is only of a minor importance."

Not lost on the Japanese is the fact that Toyoda is sitting before U.S. legislators who have little to gain by pulling their punches with Japan's "Prince."

"An important factor behind the strong criticism leveled against Toyota is the mixed feelings held by Americans about the carmaker's success on their soil," the Yomiuri editors wrote.

"In recent months, with autumn's midterm election approaching, there has been a sharp rise in protectionism expressed among members of Congress. If Toyota fails to properly act under these circumstances, it could deal a serious blow to the trust in Japanese products as a whole."