A Cordell Hull Moment

I suppose I'm one of few people watching the House hearings concerning the recent Toyota acceleration issues. Clearly there are some agendas in play here, especially those of congressmen from the upper Midwest, who would love to see some Toyota sales transferred to one of the US [not so] Big 3; not to mention the guy from Kentucky, who said Toyota employs something like 128,000 people in his state, and didn't have a bad thing to say about them.

The utter lack of automobile or production knowledge among many of the questioners was on display for all to see. We can only be thankful that Barbara Boxer wasn't on the Committee. One of the dumber questions asked was why Toyota had 2 separate designs for their accelerator. Apart from the obvious hindsight behind such a question (Toyota, of course, was supposed to know that the current hubbub about accelerator pedal design would occur), if this Congressman had ever run a factory he would know that, when confronted with a choice between shutting the factory down for months for lack of one of 20,000 parts in the car because a supplier can't deliver, and accepting a part of minor deviation from the current one from another supplier and keeping everything running, the choice is obvious. I'll bet every auto manufacturer has a large number of such cases.

As a former middle management person in a large Japanese-owned company, as well as having studied Japanese military history, I am fascinated by the interplay in these hearings. First of all, it is important to understand that no American has any real power in a Japanese-owned company. Call it jingoism, call it tribal loyalty, the Japanese sense of national superiority, or whatever, Americans are hired primarily to help the appearance of things (more on that later), so that it doesn't look like the Japanese are just shipping this stuff over here without considering the American viewpoint. The important decisions are always made in Japan. When I was with JVC, they used to arrive via the Telex machine, and we would all crowd around it when it began chattering, like piglets around the sow at dinner time, for our marching orders.

One effect of this is that strong upper American management cannot generally be found at a Japanese-owned company. Strong people don't want to be hired as figureheads with little actual power, while the shots are called in Tokyo, and the Japanese don't want people who will speak up or dispute what they, in their wisdom have decided. So it was no surprise to me to watch this guy Lentz (billed as having a sales and marketing background), with the grand title of Chief Operating Officer of Toyota USA (wasn't it interesting that Mr Inaba, fresh off the boat, had the same title?), squirm and babble when being grilled by the Committee. This guy has no real power (which the Committee probably didn't understand), and probably couldn't get a similar job with one of the US Big 3.

The grilling of Akio Toyoda (no relation to Admiral Soemu, who took over command of the Imperial Navy upon Yamamoto's death, tho it would have been delicious) and Inaba
was rivetting to me (and probably only to me). I missed American Idol for this. I've actually missed every airing of American Idol, but that's another story. The grandstanding by Congressmen Dingel and Stupak (anyone want to guess which state they represent?) was embarassing. Dingel, in particular, was just dumb -- reading these guys, in overall charge of the company, questions about details and exact dates of defects and recalls, each beginning with "Now, Mr Lentz . . .", following by some insanely detailed question. When they couldn't instantly come up with the answers, he wanted it "in the record". I'm talking about stuff like what model, color Toyota had a sticky accelerator in 2003, or the exact number of cars that might have a defect. I'm surprised he didn't ask for the VIN numbers. Even if, by some miracle, these guys had had one of the answers, he wasn't interested. He simply wished to create the impression that they didn't know what was going on.

But the answers given by the Japanese were also fascinating. Whenever a difficult question was asked (like "do you intend to reimburse families who lost loved ones for their medical and burial expenses" (!)), they simply didn't answer the question, instead spewing out platitudes about "making every effort to produce safe cars". You could just envision Japanese ambassadors Nomura and Kurusu sitting in front of Secretary of State Cordell Hull, not realizing that the Pearl Harbor attack had taken place and that Hull knew it. The ensuing blast from Hull was one of history's more memorable moments.

The Congresswoman (Maloney?) from New York who asked that question clearly hadn't thought this one through: are we going to go down the road where automakers must price into their products the cost of every potential harmful occurence involving one of their cars? How about counseling for the deceased's children? Hot coffee spilled on the crotch due, no doubt, to a poorly designed window?

In any event, these two Japanese executives rose thru a system and culture where bad news is not given to superiors until absolutely unavoidable. This was true during World War II, where those in charge of the Army and Navy, who were suffering defeat after defeat from June, 1942 on, made plans and strategy as tho they were winning. Any commanding officer who lost a battle was expected to commit seppuku, thus costing Japan many good commanders fighting an unwinnable war, and depriving the survivors of the lessons of that defeat. It was only after the bombings of Hiroshima and Nagasaki, with Tokyo burned to the ground, that the Emperor came out with his famous "the war has developed not necessarily to Japan's advantage" -- huh?

There seems to be a cultural desire to avoid strife and stress, including dealing with bad news. Everyone must agree (or appear to), before any decision can be made. This "consensus" style of management is stultifying to innovation and problem-solving, but it provides a more important benefit to the Japanese: the appearance that everyone is united and pulling in the same direction. The actual direction isn't as important as the appearance of unity. And if the decision turns out to be not a good one, it doesn't fall on one person.

Which brings me to appearance. As I discussed at some length in my article "The Other Reasons Japan Lost the War", the appearance of things trumps almost any other consideration to the Japanese. Everyone must appear to be doing his utmost. This is why Japanese corporate-types work such ridiculous hours. Very little gets done, but the appearance is one of dedication and hard work. I remember at JVC that any employee who went home before 8 or 9 pm was frowned upon. We'd sit in the warehouse and shoot the breeze or play with numbers or something to make it look like we were working -- there was deathly fear that "Japan" would call and there would be no one there to answer the phone. Of course, these Japanese engineers (and they were all engineers) were single, over here on a 2-year assignment, and had absolutely no life outside the company. At the time, I chalked it up to their "dedication", but it runs deeper.

Over-emphasis on the appearance of things can be deadly. It was one of the prime factors behind the Banzai Charge -- everyone knew it was futile, but that didn't matter; to the onlooker, everyone had given his all. The officer leading it, waving his Samurai sword so everyone would know who he was, was sure to be among the first to die. And it was worth risking death to remove the Emperor's portrait from any capital ship that was about to sink. So the answers given by the executives were the predictable and meaningless "we're going to try our hardest to make our cars safe". This probably means that they'll stay at the office smoking and drinking coffee until 1 am instead of midnight.

But, taking 2 steps back, what are we really talking about here? How many actual incidents have there been versus the number of Toyotas on the road? At what point is an occasional defect acceptable? It appears never. So here we are again, engaged in the futile pursuit of perfection. Cars today are more reliable that at any time since their invention . . . which is a good thing, since they're now nearly impossible to work on. But it doesn't matter: one apparent case of "unintended acceleration" becomes "Breaking News" all across the country -- doesn't matter that it's later proven that the driver accidentally stepped on the gas rather than the brake, or whatever. Doesn't matter that it's only the 3rd one in 10 years out of hundreds of thousands of Toyotas on the road. Each of us can envision ourselves behind that wheel at 125 mph fiddling with the floor mats, shifting into reverse, dragging our foot. It would be refreshing if someone in these hearings actually ran the numbers and showed what an infintessimally small percentage of Toyotas has actually had a problem. Our expectations are unreasonably high and, as usual, the media, with their context-free, breathless reporting, is largely responsible. Again, it's ratings that matter, and sensationalism gets ratings. Who cares about the facts?

But back to the hearings: this kind of myopic government meddling with automakers is second only to the short-sightedness of the unions, in damaging the auto industry. Can you imagine Thomas Jefferson (or even Alexander Hamilton, Mr Big Government among the Founders) chairing hearings on deaths in grist mills? There are simply risks we run by being alive and, at some point, it is counter-productive to try to drive them lower.