U.S. grilling to test Toyota chief's mettle

TOKYO (Reuters) - Two days after his appointment as president of Toyota Motor Corp (7203.T) last June, Akio Toyoda delivered his vision for steering the company founded by his grandfather: make better cars to contribute to society.

Just eight months later, Toyoda is preparing to defend himself in front of U.S. lawmakers convinced that the world's biggest automaker was working to much less lofty ideals.

Allegations that Toyota not only failed on its much vaunted quality front but that it deliberately avoided recalling millions of defective cars to save money have shaken confidence in the once-admired carmaker.

Toyoda's initial absence from the public eye as the crisis unfolded last month exacerbated the damage already done to Toyota's image, raising questions over whether the 53-year-old was fit to play flag-bearer for Japan's largest company.

Toyoda will on Wednesday become the highest-profile Japanese executive to testify before a U.S. congressional hearing, where he will be asked to explain Toyota's safety missteps that led to more than 8 million vehicles worldwide for problems with sudden, uncontrolled acceleration and faulty brakes.

Though groomed for years to take the reins at Toyota, Akio Toyoda's appointment was controversial in its timing, coming at the height of the financial crisis.

Most observers had thought his rise to the top was a few years away, and doubts persisted over whether the baby-faced scion, nicknamed "Toyota's Prince" by Japanese media, had enough experience to lead a group-wide staff of more than 300,000.

That was in spite of a public backing by company elders such as former presidents Hiroshi Okuda and Fujio Cho, who said that overcoming the once-in-a-lifetime financial crisis required a founding family member as a binding force.

Such comments highlight the respect and exalted position the Toyoda clan holds at Toyota, despite holding a stake of only around 2 percent in Toyota, currently worth around $125 billion.

BOLD STEPS

The latest of six Toyodas to run the company since it was established in 1937, Akio outlined bold, specific steps to reverse what he described as a stretched expansion that had weakened Toyota's traditional strengths.

Toyota would reduce the number of models sold worldwide and concentrate on core environmental technologies among other steps aimed at going "back to the basics", the racing enthusiast said in that first June speech as president.

Many believe Toyoda was a key force behind the automaker's controversial decision to lower the price on the newest Prius last year to compete head-on with rival Honda Motor's (7267.T) Insight hybrid.

But as Toyota became engulfed in an escalating safety crisis last month, Toyoda didn't appear to be getting the message that his presence was needed.

"It seems to me that there was nobody there to forcefully tell the president that he needs to be out there taking the lead (on the recall issue)," said Yasuhiro Matsumoto, senior analyst at Tokyo-based Shinsei Securities.

"Maybe there was some hesitation because he is a Toyoda."

His father, Shoichiro, who led the company for a decade from 1982, was mindful of that danger.

Aware of the respect he commanded, the elder Toyoda deliberately shied away from making decisions, stepping in only at the last minute on the rare occasions when he believed the issue was too big to ignore, one insider said.

"He never let on what he was thinking," the person said, requesting anonymity. "He knew his words carried weight so he rubber-stamped every decision that came his way, even if he didn't agree.

"Akio Toyoda would do well to learn from his father's style. There seems to be arrested decision-making at Toyota now," the person said.

LEARNING FROM MISTAKES

Despite criticisms over his handling of the crisis, Toyoda's role as president is highly unlikely to come under threat thanks to his name and the support of his predecessors.

Toyoda himself says he is already learning from his mistakes.

"I am aware of the criticism about my not appearing before the public much earlier," he told reporters, repeating himself at the three news conferences he held over a two-week period.

"My being here now is a result of the kaizen (improvement). I hope I can be judged by my actions from here onwards."

(Editing by Lincoln Feast)