February 1st, 2010
11:48 AM GMT
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Tokyo, Japan - It’s been a rough start to 2010 for some of Japan’s top executives.

Toyota Motor Corp’s management has been in damage control mode, out to protect its now-tarnished brand. The global recall for its sticking accelerator pedals has meant hundreds of millions in lost revenue but more importantly, battered the automaker’s reputation for reliability and quality.

But Toyota is just the latest Japanese corporate icon to lose its way.

A few weeks ago, Japan Airlines executives were feeling similarly uncomfortable, though for a different reason. Japan Airlines filed for bankruptcy, one of Japan’s largest ever corporate failures. The airline collapsed under a mountain of debt, accumulated by ballooning pensions and unprofitable flights.

They’re two very different companies struggling with two very different problems. But analysts agree what they do share is getting too big, too quick, and losing focus of the basics.

Tokyo based financial advisor Timothy Kirkwood says it’s a path that Japanese companies have taken as they’ve expanded globally. In Toyota’s case, it was so focused on cost cutting while becoming the world’s #1 automaker that it lost focus, like making sure the accelerator wouldn’t stick.

“There has been some outward looking management that’s enjoyed the global consumer spending boom in the good times. But they were overexposed to the downside. That’s what’s causing the problems in Japan right now,” said Kirkwood.

But he follows that up with the strong belief that if there will be a company that can recover from being overexposed, it’s Toyota, a well-run company with years of a proven brand.

It will only happen, though, as long as Toyota’s boardroom takes a hard look at itself and gets back to basics.



soundoff (5 Responses)
  1. Jim Wilson

    This is especially bad news for Obama’s plan to grow jobs by doubling US exports. Even before the Japan Airlines – Toyota revelations our analysis showed flat Japanese demand for 300 types of US exports through 2014 The list is in the preview version of Export Outlook Japan posted at: http://www.scribd.com/doc/25497447/Export-Outlook-Japan

    February 1, 2010 at 3:51 pm |
  2. LANCE

    JAPAN INC. HAS LOTS OF CASH TO AFFORD ALL THESE RECALLS, NO BETTER COUNTRY FOR THIS MESS TO HAPPEN TOO. JAPAN. CHINA, OIL RICH MIDDLE EAST COUNTRIES COULD END THIS GLOBAL RECESSION IF THE WORLD CAN PULL THE CASH FROM THESE HORDERS.

    February 6, 2010 at 10:03 pm |
  3. Guesty McGuestingson

    @ Lance. Srsly? The corporate mentality (on a global level) has led to this. That's it and that's all. Let the next Act begin.

    February 9, 2010 at 12:04 am |
  4. James

    Couldn't happen to a better bunch of crooks.

    February 11, 2010 at 7:18 pm |
  5. mary

    @Lance: ...I actually have a solution to your problem. Your western way of extravagant spending, affordable goods, general lifestyle, is supported by tech giants like japan and relatively cheap labor pool like china. If you want to...get rid of the so called hoarders and stay within the principles of free market which you so endorse, you would protest and strike less and let the government lower the wages to make western goods more competitive on the market. You can't have the cake and eat it too, either sacrifice your lifestyle or deal with it that the chinese are not hoarders, they're just willing to get less money for their work because of fierce domestic competition.

    February 12, 2010 at 10:27 am |

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