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Japan Braces For More Recalls From Toyota
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Japan Braces For More Recalls From Toyota

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Japan Braces For More Recalls From Toyota

Japan Braces For More Recalls From Toyota
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The Japanese press report Toyota is considering even more recalls. This time the recalls would involve 2010 Prius and the Lexus and Sai hybrids — they all share the same brake glitch. The recalls could be announced as early as Tuesday. For decades, Toyota has been one of the main drivers of the Japanese economy but its reputation has been sullied.

RENEE MONTAGNE, host:

Its MORNING EDITION from NPR News. Good morning. Im Renee Montagne.

STEVE INSKEEP, host:

And Im Steve Inskeep.

Toyota is preparing for what may be another week of recalls. This is the week the giant automaker is expected to answer complaints about braking systems on popular cars.

MONTAGNE: The New York Times and the Reuters news service say the company is planning to recall hundreds of thousands of hybrid cars. The recall could include the 2010 Prius.

INSKEEP: Theres also a Lexus hybrid.

MONTAGNE: And a third hybrid, recently marketed in Japan.

INSKEEP: Toyota has already recalled 8 million cars for other defects. And this morning, well report on the fallout for what may have been Japans proudest company.

NPRs Louisa Lim reports.

LOUISA LIM: The shift is changing, and assembly line workers stream out of the Prius factory in Toyota City. This city has only just recovered from what it calls Toyota shock: the automakers first loss in over 50 years, buffeting tax revenues and affecting the whole economy. Now, its bracing for even worse. The psychological shock of these recalls is huge. In Japan, Toyota is a national icon, a symbol of Japanese technological ability and hard work. And the fact that its halo car, the Prius, has flaws, is devastating. Suichi Masamoto(ph) says the mood on the Prius assembly line is bleak.

Mr. SUICHI MASAMOTO: (Through translator) Of course, everyones worried. The temporary workers are worried that their term might not be extended. This is Japans top-selling car. So if the factory stops, it would have a massive impact.

LIM: Im standing in front of City Hall in Toyota City. And whats really interesting is that here in the City Hall car park, theres actually a brand-new plug-in charging station thats been built. And plugged-in and charging right now is this pale-blue Toyota Prius. On the back, it has this sticker right here, which says: Hybrid City. Thats a sign of just how important Toyotas hybrids are to this part of the world.

Mr. TATSUYA MIZUNO (President, Mizuno Credit Advisory): Prius and hybrid cars are the last hope for Toyota, and Toyota has dominant market share in the global market. And now, the global sector is shifting to new type of vehicles, such as hybrid and electric cars. Japanese auto companies were our hope.

LIM: Tatsuya Mizuno, the founder of Mizuno Credit Advisory in Tokyo, says Toyotas hybrid woes have much larger implications.

Mr. TATSUYA MIZUNO (Founder, Mizuno Credit Advisory): The problem at Toyota is affecting negatively on the reputation of Japanese auto company as a whole. If Toyota has serious problem in the new types - cars such as hybrid, it damages the reputation of Japanese technology, I think.

LIM: Thats why Toyotas response is being watched so carefully, to see if the companys damage control can stop the crisis from claiming collateral victims. Hondas expressed fears it could be caught in the slipstream. In any case, its already conducting its own recall of some 600,000 cars due to a faulty window switch. Any decline in confidence could have economic implications, according to Waseda Universitys Kenneth Grossberg.

Professor KENNETH GROSSBERG (Waseda University): People may begin to question the quality, whereas there was no question about Japanese quality. And this may - may - affect the price premium that Japanese products can command, because the assumption is that theyre better than the Chinese equivalent, or whatever.

LIM: These massive recalls at Toyota and Honda, combined with the bankruptcy of Japan Airlines, reflect, to some extent, the humbling of Japan Inc. Some analysts blame the insularity and arrogance of successful Japanese companies. Kenneth Grossberg says its too early to tell what the fallout will be. He describes one possible reaction as the Chicken Little mindset.

Prof. GROSSBERG: The sky is falling. Yet again, were losing our position in the world. All our companies are falling apart. Our youth do not do what they're supposed to do. They're not studying. They're not working. They're not - you know, the usual litany of complaints that come after a decade and a half of mostly bad news in Japan.

LIM: Everyone is bracing themselves now for more bad news to come. Toyotas handling of the crisis so far has been criticized here, with the press turning on CEO Akio Toyoda for an apology which was seen as insincere. Most are desperately hoping that Toyota is learning from its mistakes. For the company and Japan itself, the stakes could hardly be higher.

Louisa Lim, NPR News, Tokyo.

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