On Monday, I wrote that this week's congressional hearings on Toyota's safety problems would be different from the usual public shamings we've come to expect from similar corporate hearings. I argued that given the vast amounts of documents Congress had subpoenaed, they were likely to yield some serious revelations into how Toyota operates. Of course, I was wrong. No new details (nothing of worth, at least) emerged. The documents I wrote about on Monday weren't received by committee staffers in time to be introduced into testimony. And the only shaming that took place was what the House Oversight Committee did to itself with its grandstanding, rambling performance.
The front page of The Wall Street Journal called Wednesday's questioning of Toyota's Japanese CEO Akio Toyoda Capitol Hill Kabuki. For the record, Kabuki is a highly stylized, ritualistic form of Japanese dance theater with elaborate makeup and costumes. The word is derived from the Japanese word for bizarre. That seems about right.
After watching some 14 hours of the hearings on C-Span over the last two days, here's what we've learned: Toyota still denies it has an electronics problem, Ray LaHood may be the most entertaining Transportation secretary ever, and attempting to publicly question foreign executives through a translator over the course of three hours is a complete waste of time. In fact, so little of worth emerged from the hearings that the most interesting thing to happen regarding Toyota over the last two days happened 500 miles from Capitol Hill, when the FBI raided three of Toyota’s suppliers outside Detroit on Wednesday.
LaHood's testimony was the best part. A 14-year member of the House before becoming Transportation secretary last year, he is familiar with the pomposity that often dominates these sorts of hearings. And for the most part, he outdueled his former colleagues with a balance of antagonism toward them, and toward Toyota. Asked whether the National Highway Traffic Safety Administration (NHTSA) was being overly tough on Toyota because the government owns 60 percent of GM, LaHood rightly responded, "Baloney." If anything, NHTSA has been too cozy with Toyota recently. One of the more searing revelations of late is that two former NHTSA regulators who went to work for Toyota played an integral role in fending off earlier acceleration probes. There was also little substantive questioning about the “black box” data recorders that Toyota installs in its cars or why it has kept its data so secret.
The much derided “No Show” Akio Toyoda outfoxed his questioners, who too often resorted to rambling, multipart inquiries rather than asking succinct questions. Asked repeatedly about specific cases of sudden acceleration that happened in a particular committee member's district, Toyoda simply responded that he was not aware of that particular incident and therefore couldn't comment on it. Toyoda knew the world was watching. He delivered a prepared statement in which he said, in English, that he was "deeply sorry," and then sat back as committee members fumbled over themselves to pin him down. On what they never seemed quite sure.
It was obvious which committee members have Toyota plants in their district, and which ones do not. California Rep. Diane Watson, whose district is just north of Toyota Motor Sales headquarters in Torrance, beamed and greeted Toyoda by speaking Japanese, while the most blistering questions of the hearings came from Ohio Rep. Marcy Kaptur, whose district is in the heart of the rust belt and home to Ford and GM plants.
Particularly ridiculous was how committee members went out of their way to thank Toyoda for showing up, and to say how impressed they were by his appearance. Which, yes, was voluntary. He was not legally obligated to be there. But this is a man whose company has sold more than 20 million cars in the U.S. in the last decade, some of which now have a serious defect that has led to the deaths of at least 34 people. Granted, the heads of Wall Street have had no choice but to show up when they've been called to similar hearings, and yes their mistakes cost the U.S. economy trillions in lost wealth. But members of Congress never bent over backward thanking them for their presence before tearing into them. For all the damage synthetic collateralized debt obligations have done, no one has ever been killed by one.
Next Tuesday, March 2, it will be the Senate Commerce Committee's turn to take its shots at Toyota in a general hearing about the carmaker's safety problems. Senate hearings tend to be more disciplined than their House counterparts. But don't forget: committee chairman Sen. John Rockefeller is from West Virginia, home to Toyota's billion-dollar engine-making plant, which employs more than 1,000 people. Don't be surprised if the questions are softballs.