NEWSMAKER-Silence from the top as Toyota recall crisis deepens

For more on Toyota's safety recall, click [ID:nN27231388]

By Chris Gallagher

TOKYO Jan 29 (Reuters) - Akio Toyoda took the helm of Toyota Motor Corp (7203.T) last year pledging to steer the company out of its worst downturn in history and bring greater transparency to its sprawling corporate culture.

Now Toyoda, the grandson of the company's founder, is having to cope with a deepening recall crisis that threatens to do irreversible damage to its brand and once stellar reputation for quality.

So why -- some question -- has Toyoda not yet come out and addressed the problem head on?

"To be honest, I don't hear much of a message from the current Toyota management so far," Tatsuya Mizuno, founder of credit ratings firm Mizuno Credit Advisory told financial television service Reuters Insider.

"The top management should show a strong message to customers and also to people who work for the company. I think it is the most important matter, when a company has a crisis, the top management's attitude is very important."

Toyota is reeling from a recall of as many as 8 million vehicles -- its biggest ever -- tarnishing its reputation for safety that had helped it to topple General Motors [GM.UL] as the world's biggest automaker. [ID:nN27231388]

The last time Toyoda commented publicly on matter was in October, when he expressed regret for the deaths of four people in a crash linked to the accelerator pedal and floor mat defects last year.

While company representatives have been vocal in the United States, where the problems first erupted and where sales and production has been halted, the silence from the vast headquarters in Toyota City, near Nagoya, has been deafening.

"Toyota headquarters are studying some form of comment or action to address this," a Toyota spokeswoman said, when asked whether company executives would address the press about the issue.

GRASPING FOR SALVATION

Since his promotion, Toyoda has outlined broad steps aimed at returning the company to profit, and launched the Lexus LFA sports car -- which he personally races -- saying it was important to put the "fun" spirit back into cars.

"I believe it is necessary to go back to the basics -- of placing the customer first and going to the source of all issues -- while at the same time taking bold action to overcome the difficulties we face," Toyoda, told a news conference after he was named president last January.

However, Toyoda, whose grandfather founded the company in 1937 and whose his father ran it for a decade back in the '80s, has yet to announce any new plans to improve quality control.

Toyoda, who holds a master's degree from Babson College in the United States, has tried to instill a sense a crisis in his company since assuming the top post in June.

He warned last year that Toyota was in the fourth phase -- "grasping for salvation" -- of a five-phase road to demise for companies outlined by business scholar Jim Collins.

Toyoda inherited a company that had expanded too rapidly during the boom years without developing the management capabilities to cope effectively when conditions soured, some say.

Toyota has never pretended Toyoda's rapid rise to the top was unrelated to his family name, which was altered to the more auspicious Toyota for the company. The family has been described by top executives as a flag-bear and binding force for the company, and special.

But not all agree.

"For me he is a symbol of a tendency in Japan of moving back rather than forward," said Stefan Lippert, a professor at Temple University in Japan.

"It will be very hard for many Japanese makers, especially for Toyota, to overcome this dilemma and retain the traditional strengths while becoming a globally integrated company at the same time." (Additional reporting by Kei Okamura, Nathan Layne and Chang-Ran Kim; Editing by Lincoln Feast)