For Akio Toyoda and Toyota, a necessary rite of passage

Badgered by Congress, Akio Toyoda vows to make Toyota's regional divisions more autonomous and less dependent on Japan.

Kevin Lamarque/Reuters
Toyota President Akio Toyoda walks past members of the media after testifying on Toyota recalls on Capitol Hill in Washington Feb. 24. He said authority for recalls will be pushed to the corporation's regional divisions.

Akio Toyoda, the embodiment of Japan's premier corporation, survived a rite of passage Wednesday.

Actually, it must have seemed like jumping through hoops on a high wire while dodging flaming arrows. Testy congressmen on both sides of the aisle badgered, interrupted, and repeatedly pressed for simple answers to questions that Mr. Toyoda, president of Toyota, found difficult to answer. It was high-impact political Kabuki.

Congress threw its punches. Toyoda parried them, as best he could, in Japanese.

But his testimony before the House Oversight and Government Reform Committee was not just a personal rite of passage. It was a corporate one, as well. Toyota, a hugely successful Japanese corporation with global reach, is being pushed to become more truly multinational.

In some ways, this switch seems inevitable. Congressmen who sharply questioned Toyoda also went out of their way to praise American workers at Toyota plants in their districts. But Toyota's North American division had no authority for recall and safety decisions. And mounting US complaints seemed to fall on deaf ears in Tokyo.

On Wednesday, Toyoda conceded that he understood the problem. "Up to now, any decisions on conducting recalls have been made ... in Japan," he said. "What we lacked was the customer perspective."

He then went on to outline how authority for recalls will be pushed out to Toyota's regions around the world, making them more autonomous and less reliant on Tokyo. Toyota, the leading image of Japan Inc., will lose some of its Japan-ness.

Wednesday was a rude welcome to this new world. But in the end, Toyota should become a better, less insular corporation because of it.

Controversy over safety recalls is pushing Toyota to run more like a multinational and less like a Japanese corporation. Is that a good thing? Les us know on Twitter @CSMecon or Facebook.

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