By on May 15, 2009

Putting the “continuous” in “continuous improvement,” Toyota plans on replacing 40 percent of its senior managers and half the board members while reorganizing its North American business according to the Financial Times. Akio Toyoda takes over as president of his grandfather’s company next month and clearly wants to set a new tone at the top. “Some people are calling this a revolution or even a coup d’état,” says Koji Endo, a Credit Suisse analyst. “The size of the [financial] loss is huge. Somebody has to take responsibility for that.” Toyoda reportedly wants to bring back former senior executive Yoshimi Inaba, to revive its US operations. That effort could include unifying Toyota’s California-based US sales operation and Kentucky-based manufacturing unit under a single management structure, possibly based in New York. Under outgoing president Katsuaki Watanabe’s leadership, Toyota lost nearly $5 billion last fiscal year despite commencing an $8.22 billion cost-cutting campaign. Toyota lost $7.87 billion last quarter, beating out even GM for the title of biggest loser.

Get the latest TTAC e-Newsletter!

62 Comments on “Toyota Prepares Management Purge...”


  • avatar
    jolo

    Shakeup in management? This is why we buy their vehicles. Accepting responsibility for the direction the company is going. What a concept.

  • avatar
    Juniper

    Off with their heads. Management by fear. Create an environment full of CYA. Toyota is done, its just a matter of time.
    I think the new guy just made his first mistake.
    I also read Toyota is talking to some cancelled Chrysler dealers to sign them up.

  • avatar
    Steve_S

    Bring back the Supra or something actually fast and fun with RWD or AWD and you may one day get some of my money. Or keep making appliances and I’ll continue to shop elsewhere.

  • avatar
    superbadd75

    Taking responsibility is one thing, lopping off heads when EVERY company is bleeding money doesn’t seem right. I hardly see how this is going to help Toyota sell more cars when nobody is shopping for them, and nobody will lend money to the people that are.

  • avatar
    Runfromcheney

    To be fair, Watanabe announced his intentions to step down last year, long before Toyota started posting losses, and bringing in Toyoda has been known for a while. I have seen this coming for around a year.

  • avatar
    DweezilSFV

    Isn’t this what everyone has been begging GM to do for the past 20 years? Why so cynical when Toyota actually does it?

  • avatar
    quasimondo

    Because it is definitely not following the spirit of The Toyota Way.

  • avatar
    tced2

    Nissan didn’t have a great time moving their California management to Tennessee (where there is a lot of manufacturing for them). I hope Toyota has a better time.

    No amount of management will ‘fix” the problem of car sales volume dropping by like a half. If sales are going to remain low, management will have to reduce capacity (and correspondingly costs).

  • avatar
    JMII

    Agree with Dweezil, Toyota is doing something about this problem unlike the Detroit fools who would have just given themselves a raise and took the private jet to the islands for a round of golf.

    Remember back when Toyota made the MR2, the Supra, and a turbo AWD Celica? I read somewhere that at present Toyota’s quickest vehicle is the V6 Rav4… so they need to get back to work ASAP.

  • avatar
    quasimondo

    Toyota doesn’t need more sports cars, they need more Corollas.

  • avatar
    Dynamic88

    Off with their heads. Management by fear. Create an environment full of CYA. Toyota is done, its just a matter of time.

    It does seem to violate the teachings of Deming – at least as I understand them.

  • avatar
    Jeff Puthuff

    Toyota’s uncharacteristic actions (wholesale firing of mgrs/execs) scare me. They seem to be preparing for a long period of stagnation or contraction. Look at the real US unemployment number, not the “official” number (~15% unemployment); California is laying off govt. workers (that never happens!) and still faces a $21 billion shortfall; Spain’s unemployment at record high; etc. Need more? Cryptogon.com.

    Yes, if not a Toyota Death Watch, the patient is seriously ill and needs close monitoring. Now, I must go and write a California Death Watch.

  • avatar
    AG

    “Toyota lost $7.87 billion last quarter, beating out even GM for the title of biggest loser.”

    I guess this means the UAW really isn’t to blame for Detroit’s problems, what with Toyota demonstrating that even a non-unionized company can lose lots of money when their cars aren’t selling.

    Have any of the transplants ever had to lay people off at their US factories yet? There’s nothing like a nice big round of layoffs to get people interested in unionizing.

    That being said, this could also be another step in the increasingly apparent GM-ification of Toyota. The excessive overlap in their trucks and suvs, the ever-increasing size of their cars, and they don’t even have that much better reliability anymore.

  • avatar
    Billy Bobb 2

    You drop that kind of coin in a Japanese firm, someone WILL fall on a sword. Guaranteed.

  • avatar
    Kyle Schellenberg

    Bubbles break, then you start again. Anyone remember $108/share Yahoo!? Suddenly the world wakes up a realizes that the internet isn’t all that and a bag of chips and ‘thar she blows!

    What we’ve just come out of is a period where people bought cars (houses, TVs, jacuzzis) with funny money, but now the funny money has stopped working. Do 12 million families really need a new car every year? No of course not, but if they can they will.

    Now that they can’t, people are waking up to the reality that driving a new car is not a necessity of life. Repossessed car drivers will take the bus if that’s all they can afford.

    Has materialism met its match? Will people warm to this concept of “living within our means”? These are the questions that must be striking terror into the minds of every vehicular CEO out there.

    Maybe the price of cars goes up significantly in the next few years and it becomes a symbol of the have/have-not’s in society. If the car companies can’t survive as is, then they’re going to have to do something drastic. Firing a bunch of suits may not be enough.

  • avatar
    quasimondo

    Have any of the transplants ever had to lay people off at their US factories yet? There’s nothing like a nice big round of layoffs to get people interested in unionizing.

    No, they don’t do that; they just have them do busywork like clean local parks or volunteer at homeless shelters or take classroom instruction while still collecting a paycheck. Apparently this is a better alternative than the Jobs Bank, but it does leave me wondering why doing something so mind-numbingly easy as putting a car together would require additional classroom training?

  • avatar
    TonyJZX

    i have a suspicion that even if they fire everyone and make a series of cars everyone likes from grandmas to ‘Fast and Furious 2jz no shit Supra’ fans the reality is no one has a job or credit to actually buy them

    demand has practically halved and any car company geared to 2007 economic conditions will continue to lose until they ‘market adjust’ themselves.

    I think Toyota have gone the opposite of GM.

    GM/Chrysler and Ford are a perfect storm of bad bad management and a dire economy.

    I think Toyota are going all ‘hari kari’ and emo and slashing their wrists when their management are not completely to blame. What could they have done differently?

    They had no crystal ball in 2007 to adjust their design or wind back production or company size in anticipation of 2008.

    Sounds a bit chicken little to me. The clear thing to me is that the giants are all stumbling while the ‘Davids’ of the industry are the ones who are lean and can ‘dodge and weave’and adapt to conditions (ie. the smaller companies who seem to be able to flourish right now). Where’s your “Toyota method” now?

    Saying that Toyota’s lineup sucks massively and I wouldn’t be seen dead in a Toyota.

  • avatar
    Bridge2far

    Toyota seems to be in full-panic mode. Their product is stale, boring and losing a lot of appeal to the buying public. They have made many un Toyota like mistakes lately.Of course most here will tout Toyo as wonderful and GM evil. But, that’s life.

  • avatar
    lw

    Very smart move by Toyota….

    The GM and Chrysler welfare is sucking them dry. They would be just fine if GM and Chrysler had been liquidated.

    Now a smaller market is being spread across the strong and the weak, which makes the strong weaker every day.

  • avatar
    1rxfan

    How does this violate the Toyota Way?

    It says “replace,” not “fire.”

    No one’s head is getting chopped off. They are probably going to be reassigned within Toyota or asked to retire (if of that age).

    The fear is that NO ONE will have any jobs unless drastic measures such as this is taken.

  • avatar
    quasimondo

    They had no crystal ball in 2007 to adjust their design or wind back production or company size in anticipation of 2008.

    Their much ballyhooed long-term strategic planning was supposed to account for this, wasn’t it?

    How does this violate the Toyota Way?

    It says “replace,” not “fire.”

    In corporate newspeak, replace = fire.

    The GM and Chrysler welfare is sucking them dry. They would be just fine if GM and Chrysler had been liquidated.

    Now a smaller market is being spread across the strong and the weak, which makes the strong weaker every day.

    Can you please explain how a hobbled GM and Chrysler hurts Toyota? I am genuinely curious about this. The Big T should be ‘eating their lunch’ and poised for global domination of the car market. Aside from an unexpectedly stronger Yen against a steadily declining dollar, I don’t see how this turns strong Toyota into a weak Toyota.

  • avatar
    toxicroach

    Well, is this bad?

    Many comments here point out that Toyota has been getting fat and lazy, offering boring, decontented vehicles and coasting on their reputation on quality. And they are losing money for the first time since the 40s.

    Sounds like time for a big purge to me, before the company gets hopelessly stuck on its course to be the Asian GM.

    And maybe its just me, but sometimes a bit of fear is good; makes people realize what is at stake. A bit of preventative catastrophe can be good for the health of an organization. I mean, the Constitution is based on the idea that every 4 years people get the chance to vote on a change of regime.

  • avatar
    cpu

    Jim Press has been co-president of Chrysler since Fall ’07. Before that he was President of Toyota USA. during his tenure Toyota products got fat, round, ugly and less reliable (Scion XB please see). Toyoda is purging the Pressites.

    Deming never said that no one would ever lose their jobs. The Toyota Production System does not promise Execs lifetime employment. TPS DOES say that production workers will not lose their jobs as a result of productivity improvement.

    cpu

  • avatar
    Matt51

    Toyota is not too big to fail. Their management is going to take necessary corrective action to save the company. The Japanese gov’t must have given them the message they are on their own. Yes, they have GM disease.

  • avatar
    don1967

    Interesting. On the one hand this proactive management shakeup would seem to disprove the “Toyota-as-new-GM” theory, but on the other hand it reeks of short-term reactionism.

    The answer might come in their next new-model introduction. Twenty bucks says we get another midsized CUV, only this time sporting a Scion badge and bearing a suspicious resemblance to the Pontiac Aztec.

  • avatar
    ttacfan

    I wonder how many of those auto execs can join new GM or Chrysler without worrying about the salary cap ;-)

  • avatar

    I’ve heard a rumor that Toyota is courting GM and Chrysler dealers that are on the chopping block. Did Toyota not learn the lesson here, or is it just me?

    Semi-OT, but those dealer cuts may not be enough…

  • avatar
    King Bojack

    They’ve overextended themselves into a precarious position. What can they really do but can a few SUVs? Slashing old management for tons of new(er) management sounds like the back room equivalent of canning the Cavalier in favor of the Cobalt because it’s “broken beyond repair” which can just be a typically Japanese knee jerk reaction but may have some horrid results. We shall have to wait and see. Still hoping they make another MR2 so we could get a decent rear engined car w/o the cost and lack of amenities as an Elise or the absurd cost of other rear engined cars (or mid engined whatever).

  • avatar
    JEM

    I’m not going to second-guess Toyota.

    I consider most of what they’re building somewhere between tedious and comical, there’s not a product in their current line save the Land Cruiser I’d ever consider buying, the Lexus line is full of models (GS, ES) that I physically cannot fit into (I’m 6’1″ and have that problem with NO other maker’s product), and despite my complete and volubly stated disapproval with almost anything and everything Toyota they’ve made money hand over fist. So I’m a pretty awful judge of their appeal.

    That said, the GM ‘what, me worry?’ example is a very clear object lesson in what NOT to do.

  • avatar
    tparkit

    Koji Endo, a Credit Suisse analyst: “The size of the [financial] loss is huge. Somebody has to take responsibility for that.”

    In view of the scope of the change in management, I suspect the reason is not to have people take responsibility for losses, but rather to set a new direction. I’m all for people who screw up to be the ones who experience the consequences of their own choices. But this is likely not the motive here.

    Setting a new direction requires having the commitment of the team, and when these people are either unwilling or incapable of making the changes happen in an acceptable timeframe, they need to be replaced ASAP – or else the train won’t be able to leave the station.

    “Incapable” can signify a variety of problems. The executives may be so loyal to the leaders who brought them along in their careers that they are no longer capable of taking the initiative. They got to where they are by being good supporters, and in turn they set up groups of lockstep loyalists around themselves. Such people have a 100% vested interest in the status quo, and are genetically incapable of rocking their own boat. If you want/need change, you have to sweep them out the door en masse in order to fracture their relationship systems. In view of the size of the losses, Toyota is forced to clean house.

    “Incapable” can also refer to being wedded to production or product concepts that are no longer tenable. In my experience, the people who create a mess are the ones least-capable of fixing it. New blood is needed. This runs directly counter to the modern mantra that the employees always know the business best, and we empower them by turning to them for solutions. The real purpose of this dodge is to let leadership off the hook; tough decisions about replacing dysfunctional employees are avoided by means of a feelgood philosophy that tells us we are being strong by recognizing people’s true strengths. Corporate HR departments excel at generating a river of this touchy-feely crap.

    Kudos to Toyota, if these changes mean they are looking reality in the face and reacting accordingly.

  • avatar
    rtx

    quasimondo :
    May 15th, 2009 at 5:50 pm

    Have any of the transplants ever had to lay people off at their US factories yet? There’s nothing like a nice big round of layoffs to get people interested in unionizing.

    No, they don’t do that; they just have them do busywork like clean local parks or volunteer at homeless shelters or take classroom instruction while still collecting a paycheck. Apparently this is a better alternative than the Jobs Bank, but it does leave me wondering why doing something so mind-numbingly easy as putting a car together would require additional classroom training?

    It’s true that thus far Toyota hasn’t laid off a single full time team member (I think they actually did a lay-off at one time years ago and it didn’t work out for them)
    About 20-30% of Toyota’s workers are temporary or probationary and their contracts are renewed every 3 months. When conditions permit large groups of the contract workers are offered full time employment and job security with new temps hired to replace them.
    In a normal market cycle this system works extremely well. The contract workers understand that they will have above average pay during their 3 month term but also understand that Toyota can choose not to renew at the end of it. No false promises. Just a high paying job that could end at the end of any 3 month term.
    These are not “normal” times and there has been a huge shakeup in upper management at Toyota.
    It remains to be seen if the new regime has the same committment to its full time team members or if the shareholders will win out and have costs cut by layoffs.

  • avatar

    I, for one, can’t wait until Toyota takes over the world. Everything will become so horribly styled (but 100% reliable). It’ll be awesome.

  • avatar
    wytshus

    “…Such people have a 100% vested interest in the status quo, and are genetically incapable of rocking their own boat. If you want/need change, you have to sweep them out the door en masse in order to fracture their relationship systems.”

    This should be engraved on the front of the RenCen.

    +2 internets, sir…..

  • avatar
    commando1

    One bad year and the heads roll at Toyota.
    Thirty bad years at GM a/o Chrysler and it’s the same old, same old….

  • avatar
    Matt51

    No, Toyota had more than one bad year. Not in terms of profit, but in terms of screw-ups. Tundra, Scion, …

  • avatar
    gmbuoy

    I think the real screw up was building two pickup plants and having to bring out their version of the jobs bank 18 months later. Production figures show Toyota has built 1/5 of the Tundrs’s they did a year ago. Glad they wrote the book of truck.

    Didn’t Toyota recall more cars than it sold in the U.S. in 2007 or was it 6 ?

    Toyota is already been talking about tapping MITI loans in the last 2 months and the artificially low yen has been a gov’t subsidy to them for 30 years.

    All the manufacturer’s are suffering from the Made-In-New-York-City-World-Credit-Implosion.

  • avatar
    Loser

    Toyota’s quality is not as good as it used to be and people are starting to notice. As a long time Toyota owner, first one being an indestructible ’85 pickup, I have seen their outstanding quality go down hill. Our ’03 4Runner has been the worst new vehicle we have owned. I have talked with other Toyota owners that feel the same. In some ways Toyota is repeating GM’s history.

  • avatar
    Steven Lang

    It’s time for Toyota to release, “Gung Ho 2”

  • avatar
    John Horner

    Makes me glad I sold my shares of Toyota stock on 5/11. This kind of wholesale bloodletting at a company which in fact was performing very well until the global recession hit is not a good sign.

    At its best, Japanese business practices rely on teamwork and consensus. Blowing up the entire management structure and putting things into the hands of untested people is a sign of desperation, not teamwork.

    Yes, GM needed to do something like this for decades. The differences is that GM was a chronic under-performing organization.

    Now Toyota has to deal with the challenge from Hyundai, the rebirth of Ford, the march of VW and the growth of China while at the same time everyone is looking over their shoulders. It isn’t easy staying #1.

  • avatar
    Canucknucklehead

    I worked in Japan for many years and I have a pretty good inside view of how Japanese companies work. They do not tolerate failure. If somebody has failed he will be flailed. Toyota will not actually fire these peoples, the will be “window workers,” or “office decorations,” meaning they will be cast out of the group, which is the ultimate punishment in Japan. They will be sent to a “research” centre in some remote crap hole miles from anywhere and separated from their families. If they accept their penance and prove they can serve the company, they will be brought back. If they don’t, they will have their desk set next to the window so they can enjoy the view.

    Japan is a wickedly competitive society. Failure is not an option. Look at Honda: even in these times they make money. They did not lose sight of what they do best and they are benefiting from it in the bad times. There is an old Japanese saying that goes something like, “It is easy to make money in the good times but better to make it in the bad times.”

    Toyota will adapt and it will do so quickly. The Japanese are masters at adaptation. They adapted to the Yen going from 360 to 80 the dollar in two years, they adapted to import quotas and Toyota will adapt to these problems. They will go back to their roots, high quality, affordable transportation. I note that on the Canadian TV spots they are really flogging the Yaris, Corolla, Matrix and the RAV4. This is their bread and butter and I don’t think we are going to see gargantuan Toyota pick ups for much longer. BTW, all those responsible for the Tundra have already been axed.

    Toyota will come back. Anyone who doubts it can only think back to the 1970s when main street laughed at Toyotas and swore they would never sell cars here.

  • avatar
    ConejoZing

    Toyota is vulnerable because they are so successful.

    America is in a harsh financial situation. How do you sell a car to a financial zombie? Someone with no real money who is living off of credit? Can they sell to a market that is like an underwater tomb world of debt and zombie loan money?

    If Toyota can figure out how to sell a car to a zombie, then they will be successful even in an American recession.

    Really, Toyota, like everyone else, is trying to survive in this miserable undead economy.

  • avatar
    quasimondo

    Toyota will adapt and it will do so quickly. The Japanese are masters at adaptation. They adapted to the Yen going from 360 to 80 the dollar in two years, they adapted to import quotas and Toyota will adapt to these problems. They will go back to their roots, high quality, affordable transportation. I note that on the Canadian TV spots they are really flogging the Yaris, Corolla, Matrix and the RAV4. This is their bread and butter and I don’t think we are going to see gargantuan Toyota pick ups for much longer. BTW, all those responsible for the Tundra have already been axed.

    To be honest, they should’ve adapted to this already, and judging on how they were in the right place at the right time with the Prius (and whether or not you believe this was a lucky break for them), they should’ve anticipated this. This wholesale purging is unbecoming of them.

    One of the principles of Toyota’s management system is the sacrifice of short-term goals for long-term ones. Big picture thinking, if you will. Such sacrifice shields management from the pressures of having to perform from financial quarter to financial quarter.

    If you look at the big picture for Toyota, this is the first time they’ve suffered an annual operating loss in fifty years. Considering this long track record, does one bad year (or more depending on how long this recession lasts) warrant the wholesale purging of the upper management structure that helped make Toyota the industrial juggernaut it is today?

    At best, what they’re doing is a dangerous knee-jerk reaction to short-term conditions that are beyond their ability to control. At worst, they’re admitting that their long-term planning strategy has failed despite the success they’ve achieved thus far.

  • avatar
    Canucknucklehead

    ConejoZing, not all economies are “dead.” We may be Bolsheviks here in Cancukistan but our economy is doing pretty well all things considered. Sure, we are commies, but we are very conservative commies. Not a single bank or any other financial institution here in Canuckistan has gone bust. In fact, the Big 5 are all still turning profits. The USA makes up about 25% of the world market, vs 50% twenty years ago. Toyota will push its products into markets where lending and levels of consumer confidence are higher. This is reflected in the ads there are running here in Soviet Canckistan. Honda is doing the same.

    In my experience there is a tendency for our southern neighbours to assume that everybody and everything is the same as in the USA. This is certainly not the case. For example, our leftie pinko governments here in Commieland ran budget surpluses for years. It took a “conservative” government to get us back to borrow and spend. Fortunately, I don’t think our “fiscally prudent” borrow and spend “conservatives” will not last much longer.

  • avatar
    lw

    Quasimondo:

    “At worst, they’re admitting that their long-term planning strategy has failed despite the success they’ve achieved thus far.”

    Thank god all these companies can just whip out the Excel spreadsheets that they used during the last depression.

    Let’s see.. Change the GDP variable in cell C13 to be -10, adjust the number of people that can afford a new car by -30% in cell A16.. Oh and don’t forget cell G14 (# of billions of $ that the US government will give to GM) and cell G17 (# of billions of $ given to Chrysler).

    Hit the recalc button and whala the business plan is updated. Then on your way up 10 floors to present this to the board of directors you get a text message covering the new bailout/law/arm twisting done by the the US Government.

  • avatar
    Canucknucklehead

    Considering this long track record, does one bad year (or more depending on how long this recession lasts) warrant the wholesale purging of the upper management structure that helped make Toyota the industrial juggernaut it is today?

    This is the way that the Japanese do things. Failure is not rewarded by big fat bonus payments. Blame comes from the top down. As I stated before, these people will still be kept in the company. They will do their penance and be given a chance to succeed.

  • avatar
    quasimondo

    lw,

    What is it that has made Toyota so successful? Quality vehicles which require little or no upkeep beyond basic maintenance. Quality vehicles that present themselves as a quality investment because they depreciate less than their competition.

    How does a government bailout of GM and Chrysler affect what made them successful? Has this bailout suddenly made them competitive and their vehicles attractive compared to Toyota? Are buyers flocking to GM and Chrysler dealerships because the government gave them an extension on life? Do you honestly believe that absent these government bailouts Toyota would not be in the economic doldrums they find themselves in?

    The bailouts are beyond their control. The change in GDP is beyond their control. The amount of eligible buyers is beyond their control. And Toyota’s upper management should not be held responsible for this because these failures (if you even want to call it that) are not of their own making, unless somebody can explain to me how they are.

    Should these outside forces continue to rock Toyota, should we expect more instances of musical chairs from them in the future?

  • avatar
    Pch101

    This kind of wholesale bloodletting at a company which in fact was performing very well until the global recession hit is not a good sign.

    It depends. I can think of good and bad reasons for it.

    You’ve done a nice job of outlining what would be bad reasons. If this is a purge to create a climate of cronyism and fear or to punish capable managers for being in the wrong place at the wrong time during the Mother of All Recessions, then you are correct, it would be a bad sign.

    But there may be other motivations. Whether or not the old management is to blame, the team may not be equipped to address the current losses and/or lead the company to the logical next step.

    This is a dynamic time for this industry. During periods like this, dramatic change and consolidation are to be expected. Toyota now needs to address the demands not just of a challenging economy, but of being Number One.

    Being the top dog is a powerful yet vulnerable place to be, all at the same time, and the type of people who might have been ideal during the growth stage when the company was climbing the ranks may be the wrong people to have during a time of market shrinkage and consolidation while the company leads the pack.

    If it’s a matter of punishment and shame, then yes, it would be ridiculous scapegoating that is impacting the business in ways that it shouldn’t and that should scare the hell out of shareholders. But if it’s a matter of getting people into the job who can better cope with the new world, then it would be a wise decision. My guess — and it’s a pure guess — is that it’s a bit of both. My hope is that it’s more the latter. Overall, this is one company that I wouldn’t bet against.

  • avatar
    1rxfan

    I guess no one else understands that Japanese companies operates differently than American companies. Replace = move to another department/section or quit/retire in Japanese companies.

    What’s crazy to me is that Americans keep trying to fit the business models of both Europeans and Japanese into their own.

    IT IS NOT THE SAME.

    Not even close.

    Even though they operate in the same city, play the same game with exactly the same rules, do you really think the Lakers and Clippers operate with the same principles in mind?

  • avatar
    Pch101

    IT IS NOT THE SAME.

    That isn’t the issue. The fundamental issue isn’t whether it is culturally acceptable in Japan to do this, but whether the business decision will be effective in addressing the issues that the company faces in a global market.

    All cultures, whether national or corporate, have their advantages and their blind spots. If this move results in the removal of the best people from places in which they should be staying, then it really doesn’t matter whether it is a matter of Japanese being uber-Japanese or not. Detroit made plenty of dumb moves that were in line with American business culture, but that didn’t make those mistakes smart or profitable.

  • avatar
    Morea

    I wonder if this means the end of Toyota’s Formula 1 and NASCAR efforts?

  • avatar
    John Horner

    “Toyota will come back. Anyone who doubts it can only think back to the 1970s when main street laughed at Toyotas and swore they would never sell cars here.”

    Toyota faces a much more competitive global landscape today than they did in the 1970s.

  • avatar
    lw

    quasi:

    Wether something is in/out of Toyota’s control isn’t relevant.

    My point is that NO business plan included any of the radical changes that have happened in the last 12 months. A company that doesn’t take make significant changes to their business plan is probably going to fail.

    If GM and Chrysler had liquidated in Q4 2008, Toyota would be making more money than they are now.. So would Ford and every other car company with a US presence.

    Did Toyota include GM/Chrysler’s liquidation in their business plan? Maybe the Tundra was all set to grab massive market share when Chevy, GMC and Dodge were gone…

    Only the shadow knows!

  • avatar

    California is laying off govt. workers (that never happens!) and still faces a $21 billion shortfall;

    Only those state employees not represented by AFSCME or SEIU.

    When Gov. Arnold tried to cut the pay of some unionized public employees, the Obama administration, with SEIU officials in on the conference call, threatened to not disburse any of the stimulus package in CA if the cuts were not restored.

    It’s possible to that public employees are the single most powerful lobbying group in the country.

  • avatar

    The Japanese are masters at adaptation.

    How’d that kamikaze thing work out?

    It took two years to train a Japanese naval aviator and once trained they remained in theater. The US, on the other hand, used a much more rapid training course and then rotated experienced combat pilots back stateside after six months in theater to train new pilots in the latest tactics. In the Midway battle the Japanese lost about 400 aviators when their carriers were sunk, a crushing blow to their airpower.

    If the Japanese were true masters of adaptation, they’d figure out a way to use those “window men” productively.

    It’s possible that Honda succeeds because it a non-traditional company by Japanese standards. People know about the kereitsu arrangements of Japanese companies. That’s a modern variation on earlier Japanese syndicates based on (wealthy) family connections. Soichiro Honda was the son of a blacksmith and mere mechanic/engineer, not the scion of a wealthy family like the Toyodas, and he had no connections to the “right” families. When Honda started to make cars, they were bucking the powerful MITI, which saw them as a motorcycle company. Honda started exporting in quantity long before many of the other Japanese industrials.

    Like another somewhat non-Japanese Japanese company, Sony, Japan is not Honda’s biggest market so perhaps they have a less insular, less distinctively Japanese corporate culture.

  • avatar

    I mean, the Constitution is based on the idea that every 4 years people get the chance to vote on a change of regime.

    I’m not sure that’s the correct use of the word “regime”. The system of government remains the same.

  • avatar
    ZoomZoom

    I mean, the Constitution is based on the idea that every 4 years people get the chance to vote on a change of regime.

    The term “Regime” in US Government should NEVER be thought of as “only” the Executive branch.

    We have three branches of government, one of which is divided into two. To “actually” have “regime change,” we cannot ever focus only on one branch. Doing so will always result in something less than regime change.

    Never forget this!

  • avatar
    Dynamic88

    Toyota is said to be planning the “replacement” (whether that means firing or transfer to Siberia) of 40% of it’s senior managers.

    Cultural issues aside, it doesn’t seem to me that 40% of the senior execs are not competent to take Toyota in a new direction, in light of new economic conditions. I mean, these guys have been running what was, until recently, the most successful car company in the world.

    Do they need platoon management? One set of “players” when the team is winning and another “Contraction team” for when things get bad?

    Or were they just overstaffed?

    It also begs the question of who is competent to determine who’s competent? How does senior management know? Was it the other 60% who made the determination? How can they be sure it wasn’t them?

    This will not play well in NA. It will foster a sense, among American execs, of fear and breed a culuture of CYA, just as Juniper said in post #2.

  • avatar
    97escort

    Toyota is doing the right thing. People are people in any culture. It is human nature to not admit that you have been wrong and have failed. Toyota was on a roll and got carried away as evidenced by the Tundra.

    The people responsible for the success are probably shell shocked by the sudden change of fortune for which they are partly responsible. It is not good to have them in top positions since they will tend to defend past actions of expansion. Retrenchment, hunkering down and going into survival mode is what is required. A new group of managers will not have the psychological baggage of the past and will be able to more clearly see what needs to be done.

    GM and Chrysler acted too slowly to oust top managers who were psychologically living in past triumphs, unable to adjust to the new situation and they both now face bankruptcy. Toyota is acting quickly and correctly.

  • avatar
    jet_silver

    Ronnie Schreiber:

    It’s possible that Honda succeeds because it a non-traditional company by Japanese standards.

    The mother of my college girlfriend came to the US after WWII and retained a lot of these Japanese standards. She was all atwitter when Isuzu started importing under its own brand in 1981. According to her, Isuzu was the oldest car manufacturer in Japan and therefore their cars were best. She thought Honda was much, much too wild and would never prosper, and every time a rusty Accord (remember, this was 1980-81) went by she’d elbow me and say “Look, again the cheap Honda.”

  • avatar
    unleashed

    Bravo Toyota!

    The N.A. auto market has drastically changed.
    The government’s bailout “strategy” virtually guarantees a prolonged recession.
    Toyota does exactly what’s necessary in this environment.

  • avatar
    unleashed

    Makes me glad I sold my shares of Toyota stock on 5/11. This kind of wholesale bloodletting at a company which in fact was performing very well until the global recession hit is not a good sign.

    The global recession is exactly the reason for the purge.
    Glad to see that they’re not staying the course, the way GM did.
    The stock is likely to rise on such the news, not to go down.

  • avatar
    njdave

    It sounds to me like Toyota is preparing to be properly staffed with management for a much smaller company with a much smaller market share for a while. Exactly the right thing to do in this market. All car companines will be competing in a shrinking market for some time to come. Toyota, like the others, had a management structure for a much larger market. They are correcting that. The other companies should do the same.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • slavuta: @el scotto I am glad that you know some abbreviations. I can give you even more – CIA, NSA, FBI, DIA,...
  • el scotto: Ponders the Venn diagrams of Ensure/Prevagen/Depends users and white guys driving V-8s should always be in...
  • el scotto: B&B, there are no V-8 RWD Bonnevilles, Coupe Devilles, or Crown Victorias. They are as dead as the...
  • mcs: @el scotto: Here’s an old article about how they operate: https://www.nytimes.com/201...
  • el scotto: @ EBFlex I had an extended cab XLT 4wd Ranger with the 4.0 V-6. Ford would’ve priced a 3.7 Ranger to...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber