Toyota Losing Sanity Over the Automotive Industry's Uncertain Future

Toyota Motor Corp. is shuffling its management team because it’s worried about the automotive industry’s uncertain future. The changes, announced this week in Tokyo, take effect at the start of the new year. Toyota wants to diversify its corporate leadership in order to handle the changing shape of car building and the growing role of “mobility.”

However, an argument can be made that the company might be browning its pants prematurely. While the current nature of the automotive industry appears to be evolving into something else, it won’t happen overnight. Still, company president Akio Toyoda talks of the shifting winds as if someone has placed a gun to his head.

“Over the next 100 years, there is no guarantee that automobile manufacturers will continue to play leading roles in mobility,” Toyoda explained. “A crucial battle has begun — not one about winning or losing, but one about surviving or dying.”

“We will pursue alliances with other companies and other industries,” he continued. “But, before that, it is essential that we concentrate the capabilities of the Toyota Group. Our coming structural change reflects our will that the Toyota Group will tackle this era of profound transformation. This change includes the appointment of people with high levels of expertise, regardless of time with the company or age and from the perspective of having the right people in the right places.”

According to a Toyota press release, those all-important changes include more people from outside the company, a female executive at Lexus, additional non-Japanese executives, and executives with backgrounds in technical positions. The business also intends to renew the roles of executive vice presidents and establish the new post of “fellow” — which is reserved for executives with a high level of expertise.

Presumably, the intent is to get management more involved in the daily goings-on.

Toyota also plans to restructure its business planning and operation divisions rather extensively, especially in regard to how it handles regional activities. The goal here is to become more sensitive to specific regions’ needs while simultaneously remaining fluid and flexible — which sounds like a pretty tall order. If done incorrectly, this could create an inefficient bureaucratic nightmare.

The list of title changes is extensive, and not filled with quite so many “outsiders” as one might imagine. But the sun is only just beginning to rise over Toyota’s “next 100 years,” so we’d imagine more managerial changes are forthcoming. At the top of the pack, vice-chairman of Denso Koji Kobayashi will become Toyota’s CFO and executive vice president — as will Toyota senior managing officers Shigeki Tomoyama and Moritaka Yoshida. Gill A. Pratt, CEO of Toyota’s Research Institute, will become the company’s first “fellow” in the advanced R&D and engineering division.

Additional changes to management are considerable and often include expanding employee duties or condensing them into a single role. They also often serve to strengthen corporate ties between various Toyota Group companies, like Denso or Toyota Tsusho. If you’re interested in a complete breakdown of the restructuring, it’s available at Toyota’s corporate website. All in, the list includes 56 promotions and 121 individually named transfers.

“This is an era in which the correct answers are unknown,” said Toyoda. “Knowing that the customer comes first, we need to have people who understand the workplace well enough to lead with quick judgment, quick decisions and quick action through genchi genbutsu (on-site learning and problem-solving) as they see fit in response to all kinds of situations. To create forms of mobility to which people can feel intimately connected, and to be able to provide the freedom and joy of mobility to all people, everyone working for Toyota will unite in spirit and continuously take up new challenges.”