Akio Toyoda, third-generation of the founding Toyota family, yesterday announced big management changes at Toyota intended to speed up decision-making processes and continue to rebuild the company’s image.
At a press conference outlining his “Global Vision”, Toyoda (pictured) said the company will cut its board from 27 members to just 11 by June, and eliminate one layer of management. He also outlined Toyota’s more conservative, long-term profit strategy in an effort to avoid losses such as those suffered in the most recent financial crisis.
Toyoda said the group would aim for an operating profit margin of 5%, well below pre crisis levels. “From now we aim to build a strong base for generating profits…so that even under tough conditions we can book an operating margin of 5% and an operating profit of about 1 trillion yen,” he told reporters yesterday.
“This means that even if we are hit with a major economic downturn again and sales fall about 20%, we will still be able to post profits. This is the bottom line of our sustainable growth plan.”
One of the casualties in the management shake up is Katsuaki Watanabe, who served as Toyota president before Toyoda took over in June 2009. Despite having overseen a period of immense growth for Toyota, Watanabe is often criticised for overstretching the Japan-based car manufacturer – particularly by Toyoda.
Fifty four-year-old Toyoda took the top job in June 2009 during an extremely difficult period for the automobile industry. He is the first of the founding family to lead the company for 14 years, but has had an extremely tough two years as the difficult financial climate was compounded by a recall crisis that damaged Toyota’s reputation for quality and reliability.
Toyoda has personally attempted to rebuild the company’s reputation, introducing chief quality officers and attempting to internationalise the company.
The Toyoda family collectively owns 2% of the business founded by Sakichi Toyoda in 1937.