Toyota senior executive acknowledges worries about U.S. political backlash

By From ca.news.finance.yahoo| Mar 16 2007
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A senior Toyota executive acknowledged worries Wednesday about a possible U.S. political backlash to his company's booming success that is in stark contrast to the woes facing American rivals.

In recent months, U.S. legislators from manufacturing states have charged that the Japanese government has kept the yen artificially low, giving Japanese automakers an advantage, and that just under half of the vehicles that Toyota sells in the U.S. are imported.

While American consumer attitudes are generally accepting of Toyota and other Japanese manufacturers as they have expanded production in the U.S., fears of a backlash are emerging as Toyota is on pace to overtake General Motors Corp. as the world's No. 1 vehicle maker.

We are certainly concerned," said Toyota senior adviser Hiroshi Okuda, credited with successfully leading the Japanese automaker to global growth during his tenure as president and then chairman from 1995 to 2006.

Okuda said Toyota needs to "significantly" increase the number of foreigners in its 25-member board, now at zero, and boost foreign ownership of the company from about 20 per cent today, to win greater acceptance as a global company. He did not give specific targets.

Okuda denied Toyota was making the No. 1 spot a goal, and said it was merely trying to satisfy customers.

"We have just being doing our job naturally, and the numbers merely came about as a result," he said at an award ceremony at the American Chamber of Commerce.

The organization chose Okuda as the 2006 "Person of the Year" for contributing to U.S.-Japan relations, creating thousands of jobs in the U.S. and investing aggressively in the U.S.

Toyota has been boosting market share in the U.S. to more than 15 per cent, riding on the success of its cars such as best-sellers Camry, widely seen as reliable and fuel-efficient. But GM, Ford Motor Co. and the Chrysler unit of DaimlerChrysler AG, are faltering.

"We have never said Toyota wants to be No. 1, and we do not give such orders to our employees," Okuda told the gathering at a Tokyo hotel, which was open to the media.

Toyota's global vehicle production topped nine million in 2006, at 9.018 million vehicles, marking the fifth year straight of growth. GM produced 9.18 million vehicles worldwide in 2006 - about 162,000 vehicles more than its Japanese rival.

Toyota has long beaten GM in profitability. In contrast to Toyota's robust earnings, GM has sunk into the red on massive restructuring costs, losing US$3 billion through the first nine months of last year after losing $10.6 billion in 2005.

Meanwhile, criticism of Toyota is growing.

Senator Debbie Stabenow, a Democrat representing Michigan, home to many "Big Three" autoworkers, has accused Tokyo of manipulating the yen.

"It creates big differences in what they can sell their automobiles for," she said recently. "Most of their vehicles are still coming from Japan."
In a letter last month to Treasury Secretary Henry Paulson, four House Democrats said the weakened yen had allowed Japanese automakers to increase their exports to the United States by more than 30 per cent in 2006.

Representative Sander Levin, a Michigan Democrat who leads the trade panel of the House ways and means committee, plans to hold hearings on the undervalued yen and said he was considering legislation to address the inequities.

Last month, Toyota picked Mississippi for a new auto-assembly plant, its eighth in North America, and that's likely to give the automaker more clout on Capitol Hill. But U.S. legislators who criticize Toyota say 46 per cent of the company's U.S. sales in 2006 came from vehicles imported from Japan, a number that Toyota acknowledges needs improvement.

Earlier this week, Jim Press, Toyota's North American president, said in Detroit that Toyota won't change its business plan despite worries about a possible political backlash.

Toyota, which also makes the Lexus luxury line, surpassed DaimlerChrysler AG as the No. 3 auto seller in the U.S. for the first time in 2006, according to data from automakers. Ford Motor Co. remains No. 2 in the U.S.


 

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