TOKYO, Dec. 22, 2023—The ‘Made in Japan’ inscription on Japanese consumer industrial products meant their quality, for competitive pricing, is unmatched among comparable products manufactured by makers of other leading countries. They sold like hot cake – Seiko watches, SONY portable radios, Brother portable word processors, Honda motorcycles, Nikon cameras, semiconductors, Toyota cars… – to global consumers with whetting appetite for anything Japan.
That was during Japan’s short-lived go-go era that began petering out come the 21st century. What remains as Japan’s key consumer industrial export products now are automobiles and little else. And cars that may be seen as Japan’s last bastion of manufacturing might is on a steady slippery slope, as underscored by Toyota Motor Corp. key subsidiary Daihatsu Motor Co.’s cheating of government safety and quality certification tests (like those of U.S. NHTSA) that surfaced during the week of Dec. 17, 2023.
What the 34-year-long coverup incident, which Toyota has a majority control, means, analysts tell The Prospect, is 1) Toyota’s lax oversight of Daihatsu’s management over its manufacturing structure, 2) Daihatsu management’s ability to continue its intrinsic business acumen to outsmart Toyota management, 3) excessive government (Ministry of Land, Infrastructure and Transport) standards and certification levels beyond what Daihatsu (and other Japanese automakers) could clear.
Akio Toyoda, chairman and de facto head of Toyota, was quoted by the BestCar’ magazine website Dec. 22, 2023 as saying, Daihatsu ‘needs to revamp it with the resolve to become a separate company (probably from Toyota).’ He went on to say that Daihatsu failed to solve problems outright (and ended up covering up).
Oh, ya?! What Toyoda said doesn’t make sense. Toyota owns Daihatsu’s shares – fully, 100 percent. It has been sending Toyota officials to Daihatsu for years and decades, with effective management control of Daihatsu by those Toyota executives sent to the Osaka-based company. Something, or many things, are wrong about what Akio reportedly said.
The Prospect’s analysis, however, is that the incident has underscored a rapid decline of Japan’s capacity at implementing just about everything, including auto manufacturing.
This year’s annual OECD data show that Japan’s productivity is close to the bottom of the rung among the 33 member economies. Japan notched 2 ranks down and now positions far lower than South Korea – even though the Japanese people believe in their prejudiced, historical myth that Korea is far inferior to the Japanese in most persuasions of human activities.
How it happened this way? The Japanese people’s arrogance, for one, of course, that they excel at manufacturing over Americans and Europeans (probably excluding Germans) like making Seiko mechanical watches and SONY transistor radios.
Since productivity comes along quality in symbiotic form, low productivity means low quality. That’s what hit Daihatsu – and probably other automakers, including Toyota.
In Japan, productivity data is gathered by the government, which gauges labor input and other data collected from the private sector. So, during Japan’s go-go era of the 1980s and early 1990s, the Japanese overworked, workers died ‘karoshi’ work to death, and in knee-jerk reactions, come the 2020s, the government slapped all types of tight work-related regulations telling companies and workers to ‘moderate’ work conditions.
Demoralized that they are restrained from completing projects they want to finish because of Labor Standard Law restrictions, workers left office work half-done, resumed it next day but with lukewarm passion and delivered it to their boss by cheating that it was complete. That’s what happened at Daihatsu and probably is happening at many other Japanese workplaces.
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