Dark sides of Toyota’s drive to be No. 1

Dark sides of Toyota’s drive to be No. 1

BY DAVID MCNEILL

SPECIAL TO THE JAPAN TIMES

JUN 9, 2013

Like most corporate giants, Toyota isn’t all squeaky clean. Yet in their book “Toyota no Shotai” (“The True Colors of Toyota”) published in Japanese in 2006, Hajime Yokota and Makoto Sataka catalog the Japanese media’s timidity when it comes to covering the nation’s top advertiser.

In May 2004, an accident resulting in death occurred in Toyota’s Tsutsumi factory in the city of Toyota, Aichi Prefecture. Yet, as the book details, the mainstream media ignored the event for months, along with allegations made by the victim’s father that it was the result of Toyota’s emphasis on efficiency.

The book also references how, after a Toyota employee murdered his wife and child in 1992, editors in the mainstream media mostly ignored his connections to Toyota — instead referring to him as “a resident of the city of Toyota.”This was quite simply because, the authors say, the media wanted to avoid stigmatizing the carmaker.

In 2008, the Pittsburg, Pennsylvania-based National Labor Committee, a nonprofit, nongovernmental human-rights group (renamed as the Institute for Global Labour and Human Rights in 2011), slammed working conditions at the company’s Prius factory in the city of Toyota, alleging that it relied heavily on sweatshop labor from China and Vietnam.

In a 65-page report titled “The Toyota You Don’t Know,” the committee said workers are “stripped of their passports and often forced to work — including at subcontract plants supplying Toyota — 16 hours a day, seven days a week, while being paid less than half the legal minimum wage.”

The report said a third of Toyota’s assembly-line workers in Japan were temporary staff. As well as their low pay, many had few rights and were forced to live in company dormitories. Any who complained were deported, said the authors.

Toyota said it would look into the allegations.

In 2006, workers at Toyota said they were ignored after warning company management that its drive to become the world’s No.1 carmaker had dangerously compromised product safety. Failure to act could endanger the company’s survival, said one of the workers, Tadao Wakatsuki.

“People were overworked; some were committing suicide,” he told the Los Angeles Times. “Of course, Toyota did nothing, but looking back we see how important this was. We just told them what we saw.”

Toyota declined to comment on the allegations.

In 2005, Bluewater Network, a California-based nonprofit environmental organization, attacked the environmental provenance of the Prius. The group said that although the car’s fuel-efficiency levels are high, and thus eco-friendly, less noticed is the amount of energy that is involved in manufacturing its two engines and its aluminum body.

In 2005, Darius Mehri, an R&D engineer who worked in the engine department for a Toyota subsidiary in Japan for more than three years in the late 1990s, published a book that praised Toyota’s remarkable production innovations — but lamented its human costs.

In “Notes from Toyota-land: An American Engineer in Japan,” Mehri said the system involved a “punishing amount of work for its employees and parts suppliers.” Deadlines were unyielding, 16-hour working days for months on end were not uncommon. The practice of “service” (unpaid) overtime was rife.

“Under conditions of unrelenting overwork, it is simply too hard for engineers to produce products without design flaws and too easy for managers to hide those flaws. The author said overwork was a key reason for the growing quality problems at Toyota and other Japanese firms.

In 2006, the Toyo Keizai business magazine also warned that Toyota’s relentless expansion had created a surge of design and manufacturing flaws and was behind a rising number of recalls. The warning came before the U.S. recall scandal erupted in 2009.

Toyo Keizai said everyone from shop-floor workers to managers were being stretched to the limit by the demands to expand. It said the growing use of temporary workers to cut costs had driven standards down and stored up quality and safety problems. The article quoted managers who said they wanted to slow down the expansion of new factories but didn’t know how to do so.

Meanwhile, some victims of accidents involving Toyota cars have been angered by their treatment at the hands of the company.

Ron Eves, a Canadian who lost his son Chris in what he calls a “mysterious” single-vehicle 2007 crash in Washington State, found some of his son’s hair and scalp tissue near the gas pedal of his U.S.-built Toyota Tundra, indicating he was reaching down to release the pedal at the time of impact.

Eves pressed Toyota to disclose the contents of the car’s electronic data recorder, which might reveal the cause of the accident. However, the company refused. After a legal struggle, Toyota released data that was “flawed and incomplete,” Eves told a Canadian parliamentary hearing.

Commenting on this, Eves said, with remarkable restraint: “Even with this incorrect or flawed readout, Toyota refused to examine the situation further.”

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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