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TOKYO -- Toyota Motor Corp. stated flatly that it has no plans to involve
itself in alliance negotiations among GM, Nissan and Renault. The Japanese auto
maker also offered an elaborate apology for a worrisome series of recalls that
has tarnished its reputation for quality.
General Motors Corp. is negotiating with rivals Renault SA and Nissan Motor
Co. about a possible three-way alliance, which could include an exchange of
equity. Toyota, with well over $30 billion in cash reserves and with existing
cooperation arrangements with GM, is the one global auto maker that could derail
any such plan. It could do this if it tendered its own bid for some sort of
tie-up with GM, which one auto-industry executive said would be an "effective
veto" over any deal among GM, Renault and Nissan.
Nothing of the sort will happen, said Toyota President Katsuaki Watanabe,
speaking at the company's midyear business update in Tokyo. He stated strongly
that his company has no interest in either blocking or joining the alliance
talks. "We are not thinking about anything like that," Mr. Watanabe said.
Mr. Watanabe also said Toyota values highly its existing areas of cooperation
with GM, including a jointly operated auto plant in Fremont, California, called
New United Motor Manufacturing Inc., or Nummi. "We'd like to keep these
arrangements as they are," Mr. Watanabe said, adding that Toyota is open to more
areas of cooperation with rival car makers. He provided little reason to suspect
Toyota was considering something specific and new with GM.
The media and the financial industry have been speculating about a possible
role for Toyota in any deal with GM and other rivals, in large part because of
Toyota's growing role as an industry leader.
Toyota has yet to surpass GM as the world's largest car maker by volume, but
it has secured a leadership position by other measures. It is more profitable,
and increasing sales and market share faster, than any other major car maker.
Toyota said it is sticking to its initial global production plan for this year,
targeting output of 9.06 million vehicles. It also is maintaining its
global-sales target of 8.85 million vehicles.
Such a leadership role can be a burden. For months, critics have worried that
Toyota is sacrificing some of its vaunted quality in a rush to bring new
products to market and grow further. In recent months, Toyota has recalled
hundreds of thousands of vehicles. One case involved a model sold in Japan known
as the Hilux Surf, which allegedly had steering problems. Police say the faulty
steering system may have lead to a head-on collision that injured five people.
The police alleged negligence, but Toyota has denied wrongdoing.
Japan's Ministry of Land, Infrastructure and Transport is examining Toyota's
handling of recent recalls, and ministry officials are hinting that some sort of
public reprimand for Toyota may be in order. Any such official reprimand would
be largely symbolic, an official familiar with the matter said, and probably
wouldn't carry any fines or penalties.
For Toyota, however, quality and safety are the cornerstones of its entire
global operations, and despite denials of breaking any rules, Toyota went out of
its way to show contrition for the recalls at its news conference in Tokyo. At
the same time, Toyota boasted of no new products or expansion plans, as has
become common at its recent media events. The company gave no press materials to
the media.
Toyota's senior management team even shunned the open-collar, short-sleeved
shirts the company has adopted for summer to help cope with Japan's sticky
weather, instead appearing in dark suits.
The message behind the funereal atmosphere was clear: "I take this seriously
and see it as a crisis," Mr. Watanabe said. He then bowed deeply in front of the
cameras, adding, "I want to apologize deeply for the troubles we have
caused."