Toyota Not Bold Enough?

This morning’s Automotive News [sub] carries a highly critical report on Toyota’s reaction to the worldwide automotive meltdown. The bottom line: the Japanese automaker is too damn slow and overly cautious. “Toyota Motor Corp. is famed for its advance planning, obsessive attention to ‘what if’ scenarios and continuous improvement,” Hans Greimel writes. “Yet with the market collapsing, the world’s top automaker is stunned to a near standstill by an astonishing plunge from record profits to record losses in 12 short months.” That’s quite a statement, especially as it seems to be based on a single analyst’s analysis. Greimel trots out JPMorgan’s Takaki Nakanishi, who complains that there’s “nothing remotely innovative” in ToMoCo’s recent plans to cut $5.11 billion in fixed costs by the end of the year. What, no feng shui?

“The company has not made any attempt to address the core strategic elements of production structure realignment or its product, regional and platform profile,” Nakanishi said.

By comparison, Nissan is dumping 12 new models that had been planned for the next five years. It also plans more production abroad to counter the effects of the soaring yen.

So Toyota’s decision not to cut its investment in new models—or at least publicly announce it—is a weakness? You could see it as a sign of strength. You know, if you were so inclined. Nor does the following assertion strike me as the truth about Toyota.

“Exports are an unaffordable luxury now,” said Christopher Richter, an analyst at CLSA Asia-Pacific Markets. Toyota should close plants at home and move volume overseas, he said.

“The time to fix it is now when you have all of your factories in the world operating under capacity,” Richter said. Toyota could boost profits by slashing its ratio of imported cars in America to 9 percent, from a current level of 45 percent, with minimal investment, he estimated.

Apparently, Toyota is . . . waiting.

[Incoming President] Akio Toyoda has pledged to be “as bold as possible in pushing ahead with reforms.”

The problem is that he’s not president yet. And current President Katsuaki Watanabe is unlikely to announce major overhauls before the changeover, for a couple of reasons.

First, the current boss doesn’t want to saddle the next one with any policies that may backfire. Second, he doesn’t want to steal Toyoda’s thunder as leader of the company’s comeback.

So Toyota’s current boss is playing CYA, and the company lets personal politics interfere with its survival. No sense of urgency? Toyota as the new GM? Anyway, Greimel is no stranger to CYA, as his backpedalling conclusion demonstrates.

As cautious as Toyota’s approach is, there are signs that change is afoot.

In late February, the company said it is bringing back Yoshi Inaba, 62, the former U.S. sales chief who left the automaker to run an airport. He will join Toyoda’s administration in June and oversee North American projects. The company hasn’t given details.

A few days later, Toyoda pushed aside three executive vice presidents who had led the company through its rapid expansion—including Kinoshita, who will retire in June.