Why Toyota Could Soon Be Nation's No. 1 'Scapegoat'

Japanese Giant Braces for U.S. Backlash as It Closes in on GM's Market Lead

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DETROIT (AdAge.com) -- Toyota has never forgotten the backlash from union workers' anti-import rallies in the early 1980s, and is worried about a rerun in light of its stunning success amid Detroit's difficulties.
Toyota fears a backlash may be triggered by its eclipse of General Motors as the world's largest automaker within the next year. | ALSO: Comment on this issue in the 'Your Opinion' box below.
Toyota fears a backlash may be triggered by its eclipse of General Motors as the world's largest automaker within the next year. | ALSO: Comment on this issue in the 'Your Opinion' box below. Credit: Massimiliano Lamagna

No. 1 automaker
The Japanese automaker, which directly employs some 40,000 people in the U.S., has seen a starker spotlight shined on its U.S. business in the past year as it edges closer to overtaking General Motors Corp. as the No. 1 automaker globally, which could happen by the end of the year.

"The danger of a backlash is just around the corner," said John Bulcroft, president of consultant Advisory Group and former auto marketing chief of Audi and Porsche. "Toyota understands the risks and is doing everything possible to manage them." Indeed, the Detroit Free Press recently obtained an internal report by Seiichi Sudo, president of North American Toyota Engineering and Manufacturing, that outlined potential societal and governmental hazards from, among other things, the carmaker's use of foreign-made parts and its relative lack of minority suppliers here. "Toyota will be a scapegoat ... and we need to position ourselves to respond to corporate image attacks," Mr. Sudo said in the report.

New corporate post
It appears Toyota is preparing for just that. The car company in January created the new corporate post of group VP-strategic research, planning and corporate communications at Toyota Motor North America in New York, and tapped Steve Sturm, 55, a seasoned marketer at Toyota, to fill the post. "My job is to manage and work on the image of the company, to promote the image and the relationship of our company to society," he told Advertising Age.

Moving Mr. Sturm into the new position "shows the importance Toyota places on its image in the marketplace and being proactive," said Wes Brown, an analyst with consultant Iceology, who predicts ads from the automaker will further push its U.S. employment and the billions of dollars it invests here.

"From a consumer perspective, Toyota has very little to worry about," Mr. Brown said. But there are pro-Detroit pockets in the U.S. and government officials in Washington who "could make some noise" that is anti-Toyota, he said.

Laura Ries, president of consultant Ries & Ries and co-author of "The Fall of Advertising and the Rise of PR," doesn't foresee a repeat of the Toyota bashing of 20 years ago. "We live in such a global society, and people are choosing global brands," she said. Her advice to Toyota: Use public relations, not advertising, to publicize how many of its vehicles are built here by Americans.

Shifting advertising focus
The automaker is airing a national TV spot from Dentsu America, New York, focusing on its new Texas plant, where it is making the newest generation of the Toyota Tundra full-size pickup. Corporate advertising has also shifted to focus on Toyota's American plants and workers instead of its environmental friendliness.

"They want to be a part of the culture and are taking tremendous pains to do that," said Jim Sanfilippo, exec VP of auto consultant AMCI. "They leave no stone unturned."

A Toyota spokesman said the planning document unearthed by the Free Press "looks at various business challenges for Toyota in the next five years," and called the confidential report's release "unfortunate." Toyota "will continue to look closely at all areas of our business to find ways to improve," the spokesman said. "This is part of our culture."

Toyota has "a very carefully orchestrated campaign" to mold its image as a good corporate citizen and American employer, Mr. Bulcroft said. "They don't gloat about their success."
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