Toyota Prepares Management Purge

Edward Niedermeyer
by Edward Niedermeyer

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.

Edward Niedermeyer
Edward Niedermeyer

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  • Jet_silver Jet_silver on May 17, 2009
    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."
  • Unleashed Unleashed on May 17, 2009

    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.

  • Unleashed Unleashed on May 17, 2009
    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.
  • Njdave Njdave on May 18, 2009

    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.

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