Toyota Prepares Management Purge
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.
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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.
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.