Friday, 26 February 2010

The US does not rule the world !

If you have followed the Toyota story, the latest twist of Toyota’s Chairman, Akio Toyoda being called to “depose” before the United States Congressional Committee, shows that the US politicians just don’t get it. “Surely if Congress can be here, so can you," Congressman Darrell Issa of California said in an electronic letter to Toyoda. Separately, he said he would "fully support" subpoenaing Toyoda, which means compelling him to appear. Behave like this and then wonder why the US is disliked so much elsewhere !!

To his credit, Toyoda-san chose to appear in person. He was subject to typical bullying and rudeness by pompous Congressmen, who were of course making political capital. Toyoda-san handled it with much grace and typical Japanese politeness. Grace and politeness are alien concepts to US Congressmen.

While Toyota is facing huge recalls and much business trouble, the key is that they have done nothing breaking the law. The “outrage” by the US Congress is all about when management knew about the defects, when it recalled etc etc. There is nothing to suggest any criminal act. While the faults itself have been in relatively few instances, the size of the recall and action is massive. If the same standards of immediacy of response were to be made applicable to US Congressmen on health care, every one of them must cool his or her heels in jail.

There is one small point to be made. Akio Toyoda is a Japanese national. He is based in Japan. He may be the Chairman of Toyota, but he does not run the US operation. Since when has the United States Congress the right to demand presence of every foreign national for “investigation” and “deposition”. If he has committed a crime on US soil, sure subject him to due process of law. If not, it might be good to reflect on the fact that the jurisdiction of the US Congress is only on US nationals and the rest of the world should bluntly tell it where its place is.

Its very rich coming from a body that preaches sovereignty to others. Would they take kindly to Bill Gates being called before the EU parliament and insulted for the anti trust violations, the Chairman of Johnson & Johnson being summoned by the Fijian parliament over the Tylenol recall, the Chairman of Boeing being grilled by every country’s parliament whenever there is an aircrash. Just imagine a US Chairman being summoned by China’s Communist party politburo whenever its Chinese subsidiary did something which angered the hosts.

There is an unbelievable amount of good and great in the US. It is a great nation with much to admire. Sadly, there is not much to admire in their lawmakers. Their sheer insensitivity, rudeness and misbehaviour may be fine in Washington, but that is strictly where it should be restricted to. Global corporations are subject to the laws and practices of each country they operate in. Equally the laws of a country stop at its borders and on its nationals. The United States Congress has no business bullying Toyoda san. The right response from Toyoda san , although he wouldn’t dream of doing it, would have been to tell the windbags to stuff it !

Toyoda san did this to manage the image of the company in the US. But he has set a dangerous precedent on a matter of principle.

15 comments:

  1. Absolutely agree to you on this sire. It was a true gesture on the part of Toyoda-san to depose before the US Congress by taking responsibility. I rephrase and quote from a comment on an article which I saw on "The Economist". [I am pretty much sure that Toyota will shine back, their quality now would be better than what it was in their heyday. Buy Toyota and you'll never again be disappointed]

    And there are some eggheads who ask why Toyoda-san does not speak English well.

    Hypocrites, it seems the Americans are and it is also a cultural clash.

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  2. Very well said Ramesh! Somehow, my sixth sense told me that this was coming from you. Probably, you echoed my sentiments.

    Very strange proceedings on this whole episode. Business sense might have compelled Toyoda san to do so. But this is not nice at all on part of Congressmen from the states.

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  3. Perfectly true and even I was wondering why Toyoda would subject himself to this. The only reason I can think of is the fact that if he had refused, the Government along with a hyper active but non thinking media would have made a villain of Toyota and for one of the largest buyers of cars, the financial interest of the Company would have been more important than legal posturing.

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  4. It is a lot to do with the culture and society in US. Even an average American thinks, its their birth right to judge someone who is at fault, without looking at their own shortcomings.

    Probably, the circumstances and the business sensibility may have led Mr. Toyoda to take it all lying down; but I am sure, someone in a slightly different circumstance would give it back to them. Its not long before that happens!

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  5. @RamMmm - Yes I believe Toyota will come out with a stupendous quality in the future, but the problem is , once consumer perceptions are dented, its very difficult to recover.
    I too saw the comment on his English and such a remark is unworthy of even contempt - wen have to look for somethign worse than even contempt.

    @Vishal - US Congressmen lead the world in insensitivity. No wonder their stock among the American public is so poor and as for the rest of the world, the self important pompous figures are even beneath ridicule.

    @Deepa - Well, every country believes its the centre of the world, which is fine. But then behaving like this with one of the titans of the world who is reaching out beyond what he is required to do is just crass bullying.

    @Niraj - Yes, he did this for the company's image in the US, although privately he must have been hurling some choice Japanese curses at these bullies. If they were really interested in getting the information they believe they were entitled to, they could have done it politely and carefully and achieved their objective. Instead they were doing political posturing and just plainly insulting him.

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  6. hmm...somehow i think wat tht senator did was rite..from an all positive angle if u c..he IS responsible to esnure his vaakalargal who voted for him to power are ensured of a gud quality product..more so wen the person who delivers is a foreigner..aana i am more than sure that wudnt be the whole n sole reason behind this gimmick and had GM done the same not a single soul wud've bothered to blink..erknavay setha paamba en adikanumnu vitrupanga. Anyways..its a pity tht wat cud've been genuine act from a supposedly duty oriented person could also be seen this way...for the odds of him doing are really odd!!

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  7. Ramesh I see a similarity in this post and the one on google. Government should only be monitoring the business and not running it. Great post, especially the fact that other corporates may not have been meted this treatment owing to their country or origin. i'm sure Toyota will rise and with style.

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  8. to look @ it a lil differently, what have the congressman won - the whole world looking down at them, and what has toyado san lost - the whole world lauding him.

    it is this humility which has moved the country in shambles at the turn of the century into one of the superpowers in the world

    My take is that toyada san is the winner in the episode.

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  9. @gils - That's the beauty of this blog - we have diverse views and as zeno observed in one of the earlier posts, the comments are better than the post. I see your point of view. If it had been GM instead of Toyota, exactly the same thing would have happened. I have a poor opinion of the current crop of US congressmen and they certainly are not qualified to talk on vehicle safety or corporate action on it - that's the job of professional bodies and they should no doubt examine the Toyota situation. They have crossed the line on international law and foreign relations in this case and they should be put in their place.

    @Sabareesan - Its more than governments not interfering with business. The behaviour of the US Congress to a respectable foreign national is deplorable. Just imagine the uproar there would have been if the Google Chairman was summoned to Beijing and insulted by the politburo.

    2Sandhya - Yes, of course, the US Congress is viewed with largely contempt in their own country. But that doesn't absolve them of the behaviour to a respected foreign national.

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  10. Ramesh-san, I normally look for your posts to make my mornings.. But I think there is one angle that has been missed. Look how integral a part of American life Toyota has become, that a bunch of low-lifes in Congress take it upon themselves to practice protecting voters on the Chairman of the company. A huge back-handed compliment to Toyota and to Toyoda-san.

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  11. @Dada - Completely so. It was a back handed compliment, but I still can't fathom the depths of insensitivity that US politicians can descend to.

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  12. Well,the politicians all over the world(mostly) are the same and rarely they deserve high opinion!

    I have felt,The US Justice Department indeed had made the life of Bill Gates miserable enough. I remember reading somewhere Bill was not treated so kindly by the chinese premier when he visited china first.

    I hope you referring to the 2010 tylenol recall but not the 1982 recall!

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  13. @Zeno - Politicians are a much maligned lot. They often deserve to be criticised, but occasionally to be praised as well ! In this case, criticism is my choice !! The antitrust case against Microsoft was a judicial process. They were accused of breaking the law; there was due process of enquiry and defence and then they came to a decision. that's fine. If Gates had been summoned to the US Congress and harangued (as seems to be increasingly the trend), then it would be, in my opinion, unjust. If Gates were summoned to the EU say (where a similar antitrust case was filed which actually went against Microsoft), I would say, that's a clear no no.

    The Tylenol recall is the current one. Didn't even know there was one in 1982 !!

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  14. 1982 tylenol recall is a classic case of Corporate Social responsibility :)
    a small intro here
    http://www.csmonitor.com/Money/new-economy/2010/0115/With-Tylenol-recall-2010-a-corporate-icon-stumbles

    I am not sure whether gates was summoned to congress! Either overdrive or harddrive [ am not sure which book it is] does covers the battle of Microsoft vs Govt.

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  15. @Zeno - Thanks very much for the link to that superb article. I hadn't known about the 1982 situation. Not surprising how J&J reacted - in those days quarterly results were not the only aim in life - CEOs could take decisions like that. Do that today and you are likely to be sacked for missing this quarters's earnings !

    On Microsoft - they have had a long and running battle with the Anti Trust Commission - that is indeed correct as that body is charged with enforcing anti trust law. Not sure if Congress intervened, although in those days the Congress was a very reasonable body. Today it represents a highly partisan pack of wolves !

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