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Spring cleaning is coming early at Toyota, particularly among executives who may have felt a little too comfortable at the top. CEO Akio Toyoda is overhauling almost every division and reshuffling job responsibilities in the biggest corporate shakeup since the company’s unintended-acceleration debacle.
Toyota is preparing for “profound transformation” as automated driving, ride sharing, electrification, and a focus on software upset the traditional ways in which it builds and sells cars. Realizing it could become a complacent, bloated conglomerate like pre-bankruptcy General Motors, CEO Toyoda (pictured above on a Lexus yacht) is greasing the cogs in his giant corporation and throwing some out entirely.
“Surrounded by changes of unprecedented speed and scale, [Toyota] is aware it faces a ‘now or never’ situation in which not a moment can be spared,” Toyoda said in a lengthy statement. In total worldwide, 56 executives will be promoted to new roles, 121 will be transferred to other divisions, and 17 will be dismissed as of January 1. Among those leaving are Mark Templin, the U.S. vice president and general manager for Lexus who has championed the F-brand performance cars, and Tokuo Fukuichi, formerly Toyota’s chief designer and Lexus president, who just months ago was promoted to the luxury brand’s top marketing role. While the company announced in March that it would reduce its board of directors from 11 to nine and usher out other executives, Toyota moved its deadline up three months, from April to January.
CEO Toyoda, despite leading the world’s largest automaker (a title traded with Renault-Nissan and Volkswagen) to record sales, said the industry’s future is about “surviving or dying” rather than outright dominance. Toyoda’s changes, he said, are intended to make the company leaner and quicker to respond to new ideas and to place more people in charge who are proven experts rather than those with seniority.
Toyoda said he also wants to promote more non-Japanese executives. The Japanese corporate culture—as evidenced during Toyota’s 2009 sticky throttle/floor-mat issue and Takata’s ongoing airbag crisis—has been difficult for foreigners, and Americans in particular, to crack.
But the rules of respecting elders and never questioning senior management have already begun to wear thin. In 2011, toward the end of massive global recalls, the company allowed its regional offices to make more higher-level decisions. After more reorganizations in 2013 and 2016, CEO Toyoda is promising more autonomy and localized decision making. The automaker will scrap seven divisions, lowering the total to 242. A new Toyota Production System division will assist other departments with the company’s revered quality and productivity standards, including those that have nothing to do with manufacturing. Toyoda also stressed “quick judgment, quick decisions, and quick action” to foster on-the-job learning.
Change at Toyota is already evident in the showrooms, where we’ve recently seen a Camry that doesn’t bore us to death, an upcoming sports car with BMW, the death of Scion, and a totally reinvigorated Lexus. But even the company that practically invented the hybrid market and sells the most popular family sedan in America can’t afford to rest on its name.