A top Toyota executive wrote that the automaker colored the truth during the furor over sudden acceleration problems to make the companyâs story seem more palatable to the public, according to a document obtained by The Huffington Post. In an email sent in 2010, Toyota’s quality chief urged company officials to cease taking liberties with the truth, asserting that they were putting Toyota’s credibility at risk.
“I feel that there have been certain statements made, while not entirely untruthful per se, that avoided direct confrontation of the truth,” wrote Shinichi Sasaki, an executive vice president of Toyota Motor Corp., in an email to 11 other top executives. These statements were made, he wrote, “because they would appeal to the public.”
Two years years after Toyota came under scrutiny for the way it handled the recall of millions of cars for problems related to unintended acceleration, the email underscores the degree to which company executives struggled to paint a favorable picture for the public and for Congress.
The email was written in Japanese and The Huffington Post commissioned two English translations. Both translations convey the same information — that Sasaki believed that Toyota officials were coloring the truth to sway public opinion.
The Huffington Post asked Sasaki to elaborate on his statements but he did not respond. Instead, Toyota issued a statement through its media department, saying that the email was taken out of context. The company characterized the email as a poor translation and said that Sasaki was expressing a concern that media organizations were depicting a “potentially misleading picture of the 2010-2011 recalls.”
“That’s because the ‘facts’ being presented by the media, as well as statements attributed to Toyota executives, were being inaccurately or incompletely reported in a manner that did not always portray the real situation as fully or accurately as Mr. Sasaki believed was appropriate,” wrote Toyota spokesman Brian Lyons in an email to The Huffington Post.
The Sasaki email, he stressed, is not news. Toyota declined to provide its own translation of the email.
Sasaki’s email and other internal communications documenting Toyota’s responses and reactions to the unfolding crisises in 2009 and 2010 are likely to play significant roles in lawsuits against the company that will come to trial starting early next year.
Toyota is facing nearly 200 lawsuits over claims that its vehicles accelerated out of control, killing or injuring passengers as well allegations from Toyota car owners that their vehicle’s value was damaged by the recalls. All of the pretrial work in these cases is taking place in a California federal court. The judge there has granted Toyota’s request for confidentiality, so the related documents are not public.
The Securities and Exchange Commission and a grand jury in the Southern District of New York opened investigations into Toyota’s unintended acceleration problems in February 2010.
The Huffington Post was shown the Sasaki email by someone familiar with some of the court and SEC proceedings, who shared the document on condition of anonymity.
The Toyota spokesman said the company is confident its position will be vindicated when the first trial begins because attorneys will be able to put internal communications into context. “As subsequent emails from and to Mr. Sasaki clearly show, his colleagues understood and agreed with his concerns that misreported statements could take on a life of their own and seriously harm the companyâs reputation,” Lyons said.
The company declined to provide the rest of the email chain.
“We must of course accept what we have done wrong, learn from our mistakes, and take action immediately to correct those mistakes,” wrote Sasaki, who is based in Japan. “However, what is also important is to make sure that untruthful statements — no matter how big or how small — are not made one after another, as this will lead to a major state of concern.”
The company’s public reaction to the crisis was “endangering the company’s survival,” Sasaki said.
And Sasaki was not the first to raise the alarm about internal communications problems. A month earlier, Irving Miller, then the company’s vice president of environment and public affairs, warned the automaker that it was taking too long to issue the recall on sticking pedals that were causing sudden acceleration, according to a story by the Associated Press. “We are not protecting our customers by keeping this quiet,” wrote Miller, who was nearing retirement. “The time to hide on this one is over. We need to come clean.”
Five days later, Toyota issued the pedal recall, which affected 2.3 million vehicles.
Miller’s email was written about widely when it came out a few months later as part of a government investigation into Toyota’s gas pedals, and caused a stir on Capitol Hill. Toyota said it would not comment on internal emails.
Sasaki, 65 and a Toyota employee since 1970, sent his email the night before company CEO Akio Toyoda was set to testify before the Congressional Committee on Oversight and Government Reform on Feb. 24, 2010. The prior six months had been some of the toughest times in Toyota’s history. The recall, Toyotaâs slow reaction to the problems and public fears over sudden acceleration were stripping the company of its reputation for providing safe, reliable cars.
Toyoda told Congress that the automaker had prioritized expansion instead of keeping its eye on safety and quality. “I regret that this has resulted in the safety issues described in the recalls we face today,” he said. “And I am deeply sorry for any accidents that Toyota drivers have experienced.”
He promised the company would take steps — like improving communications between North American operations and headquarters in Japan — to help avoid future recall delays.
Sasaki also testified before Congress, on March 2, 2010. He declared that Toyota was redoubling its quality control efforts and was giving North American employees a greater voice in deciding when to issue a recall. “And we are communicating more openly and more transparently with U.S. safety regulators and consumers,” he said, according to his prepared statement.
The problems with some Toyota vehicles started shortly after an Aug. 28, 2009, accident in Southern California that left four people dead. A harrowing 911 phone call from a passenger in a Toyota-made Lexus that was speeding out of control went public, hitting TV news, radio shows and YouTube. The driver, Mark Saylor, a 19-year veteran of the California Highway Patrol, said he was trying to control the car while his brother-in-law called for help.
In the moments before the car crashed, the passenger on the phone told everyone inside to pray. Saylor, his wife, his daughter and his brother-in-law all died.
The floor mat was found fused to the gas pedal, melted in place from the heat of the burning car.
Weeks later, Toyota acknowledged that there were issues with floor mats pushing down on gas pedals, leaving drivers unable to stop.
Through a series of missteps and under the intense spotlight of public scrutiny over the next several months, Toyota’s image deteriorated. It was forced to recall about 8 million cars for the floor mat issue.
And then, after insisting there were no other issues causing sudden acceleration, the company acknowledged in January 2010 another problem causing sudden acceleration: sticky gas pedals.
Toyota completely shut down sales of its popular Camry and seven other models for several weeks.
Citing Toyota’s slow response to sudden acceleration, in April 2010 National Highway Traffic Safety Administration levied a $16 million fine against the carmaker, the largest penalty ever given to an automaker. The agency said Toyota knew about the floor mat problem for four months before bringing the issue to light.
“By failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk,” said Department of Transportation Secretary Ray LaHood at the time. “We are continuing to investigate whether the company has lived up to all its disclosure obligations.”
By December 2010, the agency tacked on another $32 million in fines, this time as a penalty for Toyotaâs slow response to the sticky pedal issue and to a separate recall involving Prius brakes.
Toyota mishandled its reaction to the crisis, said Barbara Paynter, a crisis communications expert in Cleveland.
“Our mantra in crisis communications is ‘Tell the truth, tell it first and tell it all,’” she said. The fact that there were delays between when problems popped up and when Toyota eventually issued recalls eroded customer trust, she said, and it will take a long time to get back.
“Toyota was a brand that had so much trust and loyalty with its customers,” she said. “They violated that trust by not getting out in front of it … And itâs going to take a very long time to get it back.”
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“Kill Hollywood,” is the latest battle cry from Silicon Valley. If you are Paul Graham, that’s not a bad way to motivate young would-be founders to create new startups.
But what if you are Apple, trading spots with Exxon on any given day for the most valuable company in the world, with nearly $100 billion of cash in the bank, looking for the next industry to overturn to keep fueling your growth? There aren’t that many new markets out there that can make a difference to Apple at this point. Hollywood is one of them. If you are Apple, however, you don’t want to kill Hollywood. You want to buy it.
Apple wants to bring Hollywood into people’s homes in an entirely new way. Hence all the chatter lately of a real Apple TV in the works. However, before TVs can become more than a hobby for Apple, there is a major roadblock it must get past. The reluctance of Hollywood to license its best movies and TV shows at the price Apple wants to pay.
In that light, all the cash Apple has been hoarding and building up for years now becomes more intriguing. Its staggering piles of money now total $97.6 billion, to be precise. What are they going to do with all that cash?
One thing they could do is buy their way into Hollywood. Think about it for a second. Today, Apple could literally buy Time Warner ($38 billion market cap), Viacom ($29 billion), and Dreamworks ($1.6 billion) combined, and still have $30 billion left over. If it waits a few more quarters it could snap up News Corp ($49 billion) as well. Only Disney, which is worth $70 billion, would take a while longer to save up for.
But it is very unlikely Apple would just snap up all the major media companies. It would be a post-acquisition mess, not to mention the antitrust issues it would raise. No, all Apple needs to do is take a few billion dollars of that cash and start licensing the rights to stream first-run TV shows and movies. It could easily compete with cable. It needs to compete with cable if it truly wants to build a TV replacement.
As I’ve written before:
. . . does anyone really doubt that eventually the Internet will triumph here to smash the rigid program guide that cable and satellite companies shove down our throats? Most of us only watch a few dozen channels regularly, yet we pay for 500. If we could subscribe on a per channel or per show basis, many of us would. It’s just so obvious that the better experience starts with letting people watch what they want, when they want, on whatever device they want—whether that’s their TV, laptop, iPad, or mobile phone.
Imagine any show or movie on demand on your TV, way beyond what is available in iTunes now. There is no program guide, no schedule. Everything is there, organized according to your taste or what’s popular that day. Just as Apple provides a store for hundreds of thousands of apps—some free, some paid, some subscription—it could do the same thing with videos. TV shows and movies would be treated like apps. Some would be free. Some you could pay to download or rent to watch, like you can today. But there would also be subscription options.
You would subscribe to a show, and be able to assemble your own programming slate by picking and choosing the shows you want to pay for. Not sure about a show? Watch the first episode for free or pay to watch it once. If you get hooked, then get the subscription.
And if Apple charges only a fraction of what you pay for cable today, with much more flexibility to pick and choose the shows you want to subscribe to, well then, whatever it costs Apple to get to that point will be money well spent.
