Tense times in Toyota City

For 31 years, Genichi Miyagawa has been a soldier behind enemy lines: He sells Suzuki automobiles in the corporate heart of Toyota territory.

Owning a competing dealership here has never been easy. Back when Toyota was riding high, Miyagawa would stand in his deserted showroom gazing enviously across the road as buyers flocked to purchase this loyal city’s namesake brand from a rival dealer.

But now the once-mighty Toyota machine has sputtered. The automaker is embroiled in an embarrassing worldwide recall, its corporate image muddied with charges of slipshod workmanship and even a possible cover-up involving safety defects in its vehicles.

On Tuesday, a report on the carmaker’s slumping U.S. sales brought more bad news: Toyota in February sold 9% fewer cars in the U.S. than it did the same month a year ago; sales of the popular Camry plunged by nearly 20%.


Still, Miyagawa isn’t cashing in on his competitor’s misfortunes. He says he’d never stoop to running gotcha ads that taunt Toyota with jabs about alleged poor quality and safety.

The man who considers himself Mr. Suzuki isn’t gloating. He’s scared.

“I don’t just sell cars here, I live here,” said the balding 60-year-old. “These Toyota people are my neighbors. And we all know that if that company crumbles, this entire town will go tumbling down.”

Since Toyota officials first announced a widening series of recalls last month, this self-proclaimed car capital of Japan is reeling from a dose of civic depression.


When news of the unintended acceleration problems first broke, Toyota management here suggested that the troubles were due to driver error. Taxi driver Toshio Okamura said he believed that explanation.

“It was hard to imagine,” he said of the mechanical problems. “This is Toyota. These things don’t happen.”

Now Toyota has admitted problems with its cars. And a U.S. lawmaker has alleged that the company may have deliberately withheld evidence in lawsuits relating to vehicle safety.

“Even now that the real facts are surfacing, I can’t accept it,” said Okamura. “I think many people here are struggling to accept it.”

In Toyota City, located 150 miles south of Tokyo, old allegiances die hard. Once named Koromo, the community in 1959 changed its name to mirror that of its largest employer. A half-century later, 80% of laborers here work in the automotive industry.

The place has gasoline in its blood, thanks to the doting multinational car firm that pays generous wages and showers the community with perks such as a top-notch sports stadium, concert hall and art museum -- all carrying the Toyota brand name. Hearts here swelled with pride in 2008 when Toyota overtook troubled General Motors Corp. to become the world’s No. 1 automaker.

But like other company towns, this one’s fortunes rise and fall with those of its biggest industry. The recent worldwide economic crisis hit Toyota hard -- and Toyota City got walloped.

Unemployment skyrocketed. City officials last year saw a 96% drop in corporate tax receipts. The Aichi prefecture government, which relies on Toyota for one-fourth of its corporate tax revenue, suddenly faced a big hole in its budget.


Still, with the global economy on the mend, things were starting to look up in Toyota City. Then came news of the recalls, along with scores of accidents and motorist deaths alleged to be caused by sudden acceleration in Toyota vehicles.

Now reporters are descending on Toyota City, asking troubling questions about the company that has always held bragging rights over sales and quality. At supermarkets, cafes and bus stops here, the debate is over how fast Toyota can rebound from its public relations disaster.

At one restaurant that caters to Toyota workers and sales representatives of foreign companies doing business with the company, the mood was buoyant.

“We’re not worried,” said retiree Fumiyuki Yumemura, “even though the U.S. Congress is trying to capitalize on Toyota’s bad news. It’s just more Japan bashing.”

As the world’s most successful automaker, he said, Toyota must now expect such attacks. “Tiger Woods has shown us that being on top is a very hard job,” said Yumemura, a gray-haired man in his mid-60s. “Everyone tries hard to point out your mistakes. Chasing No. 1 is an easier life.”

Insurance saleswoman Junko Ida used a Japanese proverb to describe Toyota’s fate: The nail that stuck out is being hammered down. “But the nail will rise again,” she said.

There’s one place in town where few people dare to express any opinion at all about Toyota: At the automaker’s fortress-like headquarters, discussion of the recalls comes only in whispers.

“Toyota workers were the last to know about the recalls. The company didn’t say anything to us until after they made all their public statements. We learned about it in the press,” said Hiroshi Oba, a veteran assembly-line worker and union activist.


In past weeks, he said, the issue has come up only briefly in morning meetings. The company issued two fliers on the recalls and a union followed up with a more detailed release.

“When I bring it up, workers nod that something bad is going on, but nobody wants to discuss it. They’re too afraid,” Oba said.

Even his neighbors avoid the issue, he added.

“They’re petrified about what could happen with this recall,” he said. “People all across this city are worried about their jobs.”

At the Love Toyota dealership along the town’s auto sales strip, business was brisk on a recent Sunday. Customers test drove cars and filled out purchase paperwork just like always.

Yuki Tomitaka, 26, was helping his younger sister pick out a new car. “I still have confidence in Toyota,” he said. “The company admitted its problems. I think it will do better in the future.”

He said now was the perfect time to buy. “The salesmen are really watching out for you,” he said.

Inside the showroom, a manager said he had been instructed not to speak to the press and asked a reporter to leave the premises.

Just down the road at his Suzuki dealership, Miyagawa continues his lonely vigil, a seller forever in search of business.

An outlying community on the last stop of a subway line out of the nearby city of Nagoya, Toyota City is filled with residents who have always driven Toyotas. Miyagawa’s corporate bosses acknowledge that cruel reality and rarely nag about poor sales numbers.

Before news of the recalls, when Toyota business was brisk, recalls Miyagawa, Toyota salesmen had gotten arrogant. Dressed in pressed suits, they snubbed customers with dicey credit, dirt on their shoes or holes in their jeans.

Miyagawa never wears a suit, preferring a blue jumper that resembles something worn by a NASCAR pit crewman. If car buyers want to roll on the floor to check underneath his vehicles, he wants to be right there with them.

“How do you do that wearing a suit?” he asked.

One recent morning, a smiling Miyagawa assisted an elderly man who arrived to pick up his new truck. Business has remained stagnant, even with Toyota’s troubles.

But nowadays, when he looks across the street at the Toyota dealership, Mr. Suzuki feels not jealousy but pity.

“I think they’re having a hard time,” Miyagawa said. “They haven’t handled things well. They ignored their customers. That’s no way to do business.”