February 1st, 2010
11:48 AM GMT
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.
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