More tomorrow on the ongoing problems swirling around Toyota. It was certainly a bruising encounter for Tokyo chief Akio Toyoda who appeared before US lawmakers to answer questions about how much the company knew about the safety problems with the carmaker’s vehicles in the United States.

While Toyoda toiled in Washington, Prime Minister Yukio Hatoyama’s government is struggling to find its feet here in Tokyo. With an eye on upper house elections later this year the Democratic Party of Japan appears to be putting aside a co-ordinated policy vision and focusing on securing an outright majority.

But with a painfully slow recovery, aging population and public debt nearing 200 percent, how much longer can the country wait for clear, decisive leadership? The party is meanwhile suffering in the polls. A new poll in the Asahi shows the prime minister’s approval rating has fallen below 40 percent for the first time since he took office.

As sanction-like measures go, denying funding for children’s education doesn’t exactly have the most positive ring to it.

But this is effectively what has been proposed by Hiroshi Nakai, the minister in charge of the issue of Japanese nationals abducted by North Korea. The media here reported at the weekend that Nakai had asked the education minister to exclude ‘cho-sen gakko’ from the government’s scheme to make high school education free at public schools and to provide financial assistance to families with children attending private schools and international schools. The cho-sen schools have close links with a pro-North Korean group of long-term Korean residents in Japan.

It’s understandable that Nakai wants to be seen to be taking action to stimulate progress between Pyongyang and Tokyo over the abductions, but surely this measure, if adopted, would generate more bad publicity than progress. It wouldn’t harm the existing lot of families with kids at these schools, since they would not become entitled to the new assistance--they’re not having money they are currently entitled to taken away. So it would be difficult to imagine the General Association of Korean Residents in Japan pleading for a change of policy over the abduction issue in Pyongyang as a result. Meanwhile, denying educational funds for these kids would help foment resentment against the government here among the affected families while reflecting badly on Japan internationally.

Now, if the government is to argue that the curriculum at these schools is not suitable and therefore it cannot justify giving money to assist the children attending them, then that’s a different matter.

That’s pretty much what happened yesterday, when Chief Cabinet Secretary Hirofumi Hirano suggested the content of the curriculum at cho-sen schools be carefully examined for ‘suitability’. With the remarks coming so soon after Nakai’s request, was this a case of the government’s chief spokesman trying to put a better spin on the topic? This certainly sounds more reasonable than denying funded education to kids who have never even set foot in the country against which such a measure has been taken.

All the same, should the measure eventually be adopted using the curriculum argument, you can bet that Nakai will be telling his audience a different story.

Toyota’s announcement on Tuesday of the recall of its Prius, Lexus HS250h and Sai cars came not a minute too soon.

Toyota has been giving the impression of a lumbering giant ignoring the severity of its problems by reacting slowly to persistent consumer complaints, an image symbolized by the tardiness with which the company’s president officially appeared before the media.

But Toyota chief Akio Toyoda finally seems to be embracing the sharp public relations learning curve that has been thrust his way over recent weeks. His press conference in Tokyo on Tuesday was more positively received by Japanese media than last Friday’s in which he gave the impression to some writers of trying to make a swift exit before answering key questions.

Instead, on Tuesday he scored points for taking more time to answer questions clearly and in unveiling details of the recall, which relates to 220,000 cars in Japan and ultimately as many as 400,000 cars worldwide.

Toyoda also wrote a piece for The Washington Post on Tuesday in which he assured readers that Toyota was committed to building ‘the highest-quality, safest and most reliable automobiles in the world.’

Making sure he went beyond platitudes to redouble the company’s commitment to its core values, Toyoda spelled out in clear, concise English measures the company will introduce to improve its safety record, such as inviting an advisory panel of experts from outside the company to look at Toyota’s operations.

This piece, and the recall will have gone some way to helping dispel the image of a leader gazing at his navel, but a planned trip to the United States could prove the critical moment for calming the storm should he meet US Transport Secretary Ray LaHood and a congressional committee looking into the recalls.

As the week has progressed, reports in Japan have emerged of an exaggerated U.S. response to the safety issues, fuelled by a desire to see troubled US automakers take advantage of the negative publicity surrounding Toyota.

But if anything, Toyota is more a victim of its own success in having such a seemingly impeccable safety record and in reaching the pinnacle of the world auto market. Being No. 1 and apparently flawless makes you the biggest and perhaps easiest target in the market.

While that provides cover for rivals GM and Honda, who are also engaged in large-scale recalls, it will come as little comfort to Toyota.

The merger romance between Japan’s top beer maker Kirin and its would-be partner Suntory ended Monday, not exactly in tears, but with some recriminations.

While on one level the two companies seemed perfect for each other in terms of combining their relative expertise, their different business visions ultimately put paid to talk of an alliance of corporate bliss.
With the domestic market for beer and related drinks apparently satiated, both companies were looking to join hands to facilitate expansion in overseas markets amid realignment within the food and beverage sector that recently saw US giant Kraft takeover Britain’s Cadbury.

While Suntory is a distant third in the Japanese beer market with a 12 percent share compared with Kirin’s 38 percent, Suntory has almost double Kirin’s 10-11 percent share of the domestic soft drinks sector. A merger would therefore have drawn on each company’s strengths while helping to lower costs in crucial markets such as China.

Talks toward that end were confirmed in July 2009. However, as those negotiations progressed the two companies came to realize that they were far less compatible than they originally thought. The crucial difference being that Kirin Holdings is a relatively Westernized operation listed on the Tokyo Stock Exchange while Suntory is still very much a paternalistic family-owned business.

While both companies sought to create a new listed company, they valued themselves differently. Relative to sales or operating profits, Suntory is about two-thirds the size of Kirin, but the Kirin-Suntory merger ratio proposed by Kirin was 1:0.5. For its part Suntory was expecting a ratio of equal terms: a huge gap in perceptions. But there was more to it than that.

The key point for Kirin seemed to be to limit the stake of the Suntory founding families to less than the critical one-third ownership of the new company, so that they could not veto major decisions. Suntory, meanwhile, was expecting to have a least one-third of the new entity precisely so it could.

When Kirin President Kazuyasu Kato explained on Monday why Kirin had called off the talks, he spoke of the need for corporate transparency and for separating management and shareholders, the implication being that Suntory, as essentially a family-owned business, had issues with these aspects of becoming a listed company.

This apparent scapegoating was too much for Suntory President Nobutada Saji, who claimed at a press conference hastily organized the same day that ‘a listed company is unable to understand the positive aspects of the kind of privately-owned company we have in mind.’

Certainly, a listed company pressed by dividend-hungry shareholders would find it very difficult to pursue Suntory’s principle of dividing profits three ways, with respective thirds directed to customer service and cultural activities for the community. Nor would they be impressed by famous examples of Suntory’s proud determination to succeed in the long run such as the 45 years it took to make its beer operations profitable and the 20 years it spent researching the making of blue roses.

Nevertheless, before their verbal tit-for-tat on Monday, the two company presidents, who were contemporaries at Keio University, must presumably have agreed on most other aspects of their envisaged merger. Otherwise the length of time they spent overlooking the significance of their different corporate visions is difficult to understand.

Both companies will now have to come up with a Plan B for their future growth. And the need for action was underlined today with the announcement of a year-on-year 13 percent fall in domestic beer shipments in January--the lowest level recorded since data became available in 1992.

Akio Toyoda, president of the world’s biggest carmaker, Toyota, finally appeared in public Friday to officially apologize for the accelerator-related problems that have led to the recall of 8 million cars and complaints surrounding the brakes of its Prius hybrid.

His failure to appear before the media before Friday’s hastily arranged press conference in Nagoya had strengthened the impression of a company leadership intent on downplaying the worst public relations crisis in the automaker’s history.

But after the sluggishness of the company’s recall of cars over persistent gripes over its accelerator pedal jamming, Toyoda missed the opportunity to show a heightened awareness of the need for quick action through a recall of the Prius within days of reports of brake problems.

A recall now looks imminent, but Toyoda’s cautious approach in not announcing it on Friday won’t have helped his company’s cause.