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Looking For Answers In Japan's Toyota City

Toyota's modern steel and glass headquarters in Toyota City, a city of more than 400,000 that is twinned with Detroit.
Louisa Lim
Toyota's modern steel and glass headquarters in Toyota City, a city of more than 400,000 that is twinned with Detroit.

In Japan, reports say Toyota is getting ready to announce yet another recall, this time of the latest Prius hybrids due to braking problems. U.S. dealers were told they'd be given more details of a Prius repair plan early this week, but it's not yet clear if it will be a formal recall or a voluntary repair scheme.

Toyota has already apologized for the recall of more than 8 million cars over faulty gas pedals and floor mats. But how did things go so badly wrong for the world's top automaker?

One place to look for answers is the ground zero of Toyota's meltdown, a modern glass and steel building. This is Toyota's headquarters, which stands almost opposite its first car factory, forming an axis of near mythical importance in Toyota City. This quiet city of 420,000 in Japan's central Aichi prefecture is twinned with Detroit, and was renamed from Koromo in 1959 in honor of its biggest employer.


The Toyota Way

Old-timers at Toyota say one reason for the company's current difficulties can be found within the Toyota Way, a philosophy that underpins and unites the entire company. It's almost like a religion for employees, and one of its central tenets is maximizing efficiency by minimizing waste.

But many believe that the efficiency drive was taken too far, sacrificing the quality and safety, which were once Toyota's watchwords.

Nowadays, Hisayoshi Atsumi drives a taxi around Toyota City — a Toyota, of course. Before that, he worked for Toyota for 29 years.

"I think what caused the current problems is that Toyota cut costs excessively," he says. "They squeezed and squeezed, and even when there was nothing left to squeeze, they squeezed some more. That makes the workers' jobs hard."


Not only are their jobs hard, but Toyota regulates its employees' lives to an extraordinary degree. There's even a Toyota-approved way of turning corners when walking around the company.

Tadao Wakatsuki, who's put in 45 years of service at the auto factory, demonstrates the Toyota way of turning a corner. At the intersection of two corridors, he stops and looks left to see if anybody's coming. Then he checks right, then looks forward. Only when he's ascertained a clear path does he make a crisp 90-degree turn. And he says everyone who works at the auto giant must do 90-degree turns on Toyota property. That's part of the Toyota way, along with dozens of other rules, some of which he describes:

"If you walk around with your hands in your pockets, you'll be told to take them out. If you drive to work, you file a report describing the route you take and the risks. If you drive to your hometown, you report exactly where you're going to stop for a break. I would say there's no freedom at Toyota. It's totalitarian."

Toyota's Fatal Flaw?

Four years ago, Wakatsuki started his own union — the All Toyota Labor Union. Worried that standards were slipping too far, he wrote to management outlining his fears. Today as he recites his list of concerns, he sounds prescient.

"The same cheap parts are used in too many different models; design and planning is outsourced and it's done by computers; the trial and error period for new cars is too short; there's not enough data; and there's a shortage of experienced workers."

He believes Toyota's fatal flaw was its global ambition; it overreached its capabilities and cut too many corners to snag the No. 1 spot. The troubles were known by its workers, he says, but the emphasis on conformity meant few spoke out.

But one Toyota man did speak out. Last October, he publicly accused the company of being guilty of hubris born of success, undisciplined pursuit of more, and the denial of risk. That man was none other than Toyota's president, Akio Toyoda, who was outlining the stages in a book by Jim Collins called How the Mighty Fall. Toyota is grasping for salvation, he said, or else it faces irrelevance or death.

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