Toyota elevates founder’s grandson
Toyota Motor Corp. tapped Akio Toyoda, grandson of the Japanese automaker’s founder, as president Tuesday, paying homage to its roots at a time when the company faces its first operating loss in 70 years.
The U.S.-educated Toyoda, 52, is the first founding family member to take the helm at Japan’s top automaker in 14 years. He promised a reaffirmation of the firm’s core principles, such as valuing ideas from the ranks -- a management approach called kaizen that has made Toyota’s production methods famous in industry circles around the world.
“Having been born a Toyoda did not happen by choice,” he said. “But I want to do my best as Akio Toyoda for what I believe in.”
Analysts say Toyoda faces enormous challenges. Just hours before his appointment, Toyota announced that global sales fell last year for the first time in 10 years, dropping 4% to 9 million vehicles.
Highlighting the dire outlook, Toyota, which has been racing to overtake General Motors Corp. as the world’s No. 1 automaker, expects to sink into its first operating loss in 70 years, amounting to 150 billion yen, or about $1.7 billion, for the fiscal year ending March 31.
“I am simply determined to do my utmost in being handed this big role of steering Toyota as it faces what has been said to be its worst crisis in a century,” Toyoda said at a Tokyo news conference.
A new, younger leadership and the charisma of a Toyoda may be what the ailing automaker needs to bring its ranks together and send a message of change, analysts said.
“Toyota is raising the flag,” said Yasuaki Iwamoto, auto analyst at Okasan Securities Co. in Tokyo. “It sends a strong message that moves toward change will be sped up. And that’s an important message.”
The appointment does not mean that Toyoda alone holds the reins, Iwamoto added, because the company tends to be managed by a team, which will include President Katsuaki Watanabe, who becomes vice chairman with Toyoda’s rise.
Employees say the Toyoda family name holds special meaning, although the Toyodas own only a tiny portion of the automaker’s stock. The founder’s family name is spelled with a “d,” but the company name was changed to read Toyota, which was considered luckier according to Japanese superstition, the carmaker says.
Fujio Cho, a former president who has overseen Toyota’s growth in North America and is staying on as chairman, said Toyoda had the true Toyota spirit in feeling a bond with customers.
“A company needs to be more than just a strong company. It needs to be a good company,” Cho said, appearing at Toyoda’s side in Toyota’s Tokyo office. “He is not another ‘salaryman’ like me.”
The friendly and unpretentious Toyoda -- grandson of Kiichiro Toyoda, who founded Toyota seven decades ago -- has been called Toyota’s prince by the Japanese media. He joined the board in 2000, becoming one of its youngest executives.
Toyoda, who holds a master’s degree in business administration from Babson College in Massachusetts, has overseen Toyota’s Chinese operations, Japanese sales and Internet business.
Previously, he served as vice president at New United Motor Manufacturing Inc., a Fremont, Calif., joint venture of Toyota and General Motors, giving him key experience in the U.S.
