Today’s Business Thought Leaders segment with author and industry expert Bill Michels was incredible. Of the several noteworthy observations Michels provided, his revelation that the current Congressional hearings regarding the Toyota recall has the Japanese manufacturer actually giving testimony before a competitor raises a number of red flags.
The moment that the U.S. Government became a majority owner of General Motors through its $30 billion “investment,” hearings such as the one involving Toyota are no longer arms length. In short, if a conflict arose in a judicial hearing where the judge and the defendant had a similar-type relationship to the one between the U.S. Government and Toyota, the judge would have to step down in the interests of justice.
Besides raising the question as to whether Toyota can receive a fair hearing from a government which owns a majority stake in one of the company’s competitors, several questions of even greater significance center on whether the government forfeited its right to convene such a hearing and, if they have, what legislative body could legitimately assume the mantle of representing the public interest in a forum that would be above reproach?
Looking down the road, and again referencing the judicial system, if Toyota feels that they did not receive a fair hearing, should they not be afforded the same rights as an accused who would have a solid basis for having a judgment overturned based on a similar conflict of interest.
The fact is that over the years Toyota has had an overall impeccable reputation for quality, that is now being scrutinized by a competitor. While there are certainly issues that have to be addressed by the company internally, ones in which Bill touched on during the course of the show including the emergence and effective utilization of advanced analysis tools, however unintended one cannot help but wonder if the U.S. Government has fallen down on its own platform of fair dealings and objective decision-making.
As always, I welcome your feedback and direct you to the On-Demand Player below to access my interview with Bill Michels in its entirety at your convenience.
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Procurement Insights 
John
March 20, 2010
Your arguement makes strong points. The weaknesses are:
1) It ignores the issue of the influence of Campaign donations. GM can’t afford to donate to political candidates like Toyota can.
2) Toyota has large manufacturing plants in Southern States dominated by Republican candidates who expressed strong desires to let GM be liquidated. Elections are local, candidates cannot afford to ignore or penalize powerful local interest groups.
3) The Government only owns GM not Ford or Chrysler. You have yet to show that the Government has increased scrutiny over these companies as well.
procureinsights
March 20, 2010
Excellent points in terms of broadening the perspective.
You have also illustrated the significance of the appearance of possible impropriety in that if the government did not have an ownership stake in GM, then the questions surrounding the Congressional Hearings would be a non-starter.