Wednesday, January 30, 2008

Is Toyota Unstoppable?

Chairman Okuda


If the American car industry’s current débâcle were a movie, it would be a Steven Seagal action flick. Mr. Seagal’s character would be the fight-for-right impersonation of GM CEO Rick Wagoner.

Rick Wagoner

The story goes like this: Mr. Wagoner, in the face of gross injustice, flies to Japan, takes on the stereotypically evil conglomerate Toyota and fights his way through an army of karate chopping henchmen before reaching his way to the dark overlord – Chairman Hiroshi Okuda.


The two spar (true to life, Okuda San possesses a black belt in judo) but as luck has it, Mr. Wagoner wins. Good triumphs over evil. Cut to thousands of unionized laborers celebrating Toyota’s defeat. They rejoice, happy to have the opportunity to hold a strike for another day.

Flash to real life and the picture’s not so cut ‘n dry. Toyota is extremely popular and having produced their 15 millionth North American car this year proves it. And Mr. Okuda, like a wary ranger, is keen to put out the forest fires of protectionism whenever and wherever they flare.

One of many Toyota production plants


Anti-Toyota Congressional legislation is highly unlikely thanks to the fact that imperial Toyota is now a fundamental part of the American auto industry.

The numbers are staggering: nearly 2 million cars per year U.S. production capacity, 38,000 employees, $16.3 billion in North American investment plus the purchase of $26 billion worth of the continent’s parts and supplies.

True to their “Global Vision 2010,” Toyota seeks to “promote the appeal of cars throughout the world and realize a large increase in the number of Toyota fans,” and “be a truly global company that is trusted and respected by all people’s around the world.”

This verbal sunshine, as visually bright and gay to read as Japanese animé is to watch, successfully cloaks Toyota’s patented method of producing cars in foreign markets that are built by the same people they target as customers.

Actually, coming to think of it, it’s a 2006 Nippon version of Henry Ford’s old motto. The point herein lies that Toyota’s image Stateside seems every bit as American as the Vette. It’s what people drive for when they require something practical – and most Vettes are quite the opposite in nature.

Ah, but history and culture does come to play here. Japanese Toyota does not possess what American GM makes in spades: Americana. And it just so happens that China, soon to be the world’s largest automotive marketplace, loves what the General has to peddle and reviles Japan (thanks to WWII).

Anyone who has sat comfortably in a new Toyota Camry has only to contort himself into the back of a Hong Kong taxi to realize all too painfully well that Toyota’s products are not of a universal grade around the world and in China their econoboxes are the rugged equivalent 1980s garbage that they would never have sold Stateside even back in the 80s.

It seems as though the Toyota giant has boxed itself into a corner here. China’s position is key and the Chinese capacity to produce all goods fast n’ cheap is giving the folks at Toyota a run for the efficiency minded Yen. The Buicks that the Chinese buy are Buicks being made in Shanghai.

Still, if their success in nationalistic America proves anything, it tells the story that Toyota is an extraordinarily capable company, brimming with money and resources to work production magic. And it will take magic for Toyota to succeed in the next round in the People’s Republic.

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