Toyota totals its corporate social responsibility cred
By Phil Mattera, Dirt Diggers DigestIt would not surprise me if the people who do public relations forToyota are flipping through their old scrapbooks to cheer themselves upamid the worst crisis in the company's history.
They might be looking longingly at the 2003 Business Week cover story headlined: "Can Anything Stop Toyota: An Inside Look at How It's Reinventing the Auto Industry." Or the 2006 New York Times paean entitled "Toyota Shows Big Three How It's Done." Perhaps they are going back even further to the 1997 love letter from Fortune: "How Toyota Defies Gravity."
These days Toyota is instead experiencing the unbearable heavinessof being exposed as just another unscrupulous automaker that, whetherthrough incompetence or greed, puts many of its customers behind thewheel of a deathtrap.
New revelationsthat the company knew about the defective gas pedals for years beforetaking action are all the more scandalous because Toyota had alongstanding reputation not only for business prowess but also forsocial responsibility.
The company, of course, fostered this image. Its website proclaims:"Toyota has sought harmony between people, society, and the globalenvironment, as well as the sustainable development of society, throughmanufacturing. Since its foundation, Toyota has continuously worked tocontribute to the sustainable development of society through provisionof innovative and high-quality products and services that lead thetimes."
All big corporations make similar declarations, but Toyota managedto convince outside observers of its pure heart. Last year theEthisphere Institute included the automaker on its list of "the World's Most Ethical Companies." Toyota is ranked 14thon the "Global 100 Most Sustainable Corporations in the World." And itreceived the highest score among automakers in a 2006 CERES assessment of corporate governance changes adopted by large corporations to deal with climate change.
Toyota's environmental reputation is not completely unblemished. In 2007 the company incurred the wrathof green groups for its opposition to an effort to toughen fuel economystandards in the United States (a stance it modified in response to thepressure). In 2003 Toyota agreedto pay $34 million to settle U.S. Environmental Protection Agencycharges that it violated the Clean Air Act by selling 2.2 millionvehicles with defective smog-control computers.
Overall, however, Toyota was regarded as a much more environmentallyenlightened company than Detroit's Big Three. In fact, its successfulefforts to bring hybrids into the auto industry mainstream made itsomething of a corporate hero in green circles. Michael Brune, who wasrecently named the new executive director of the Sierra Club, brags that he and his wife have been driving a Prius since 2004.
Toyota's more laudable stances on sustainability issues did notprevent it from being completely retrograde when it came to respectingthe collective bargaining rights of its U.S. employees. It hassuccessfully kept unions out of its heavily-subsidized American plantsand has taken advantage of contingent workers to keep down costs in those operations.
Just as good environmental policies do not automatically lead togood labor practices, the current safety scandal shows that a companycan be green and totally irresponsible at the same time. DespiteToyota's claim about promoting "harmony between people, society, andthe global environment," it appears the company put its businessinterests ahead of the safety of its customers and others with whomthey share the road.
The automaker's safety scandal is another indication that voluntarycorporate social responsibility policies go only so far. It is onlythrough rigorous government regulation, backed by aggressiveenvironmental and other public interest activism, that majorcorporations can be kept honest.
