TRDFantasy

http://www.reuters.com/article/2011/...sSector&rpc=43

This will be Toyota's biggest management reorganization in 8 years.

Very good move IMHO . Less management means Toyota can react faster to market changes, as well as be faster in responding to competition. It makes for a leaner and swifter company .

JessePS

60 is still to much, just make it like a ruling monarchy. 1 person to rule them all.

TRDFantasy

60 would be all the managing officers, not board members. The board members make the big decisions, and the board members will be trimmed from 27 to 10-15.

LexFather

That is a big change...I wonder who the board is?

IS-SV

Sounds like good business decision, I like what they are doing.

xioix

If they do what other companies do and keep all the older guys and not the new guys with new ideas, its not a good idea

TRDFantasy

Well as the article states, the board is currently comprised of chairman, two vice-chairmen, a president, six vice-presidents, 15 managing directors and two directors.

In terms of known names, currently the board includes Akio Toyoda, Fujio Cho, Katsuaki Watanabe, Kazuo Okamoto, Takeshi Uchiyamada, and Tadashi Yamashina among others.

Some of the "younger guys" that became part of Toyota's board in the 90s are the ones that led the company to it's quality troubles. Having younger members does not automatically mean new or good ideas. New ideas are not necessarily good ideas either. Toyota's success as a company is based on simple, fundamental principles which are timeless, and principles that Toyota strayed from under the influence of a few "younger" guys starting in the late 90s.

I don't think age will play much into it. I think they will get rid of some board members that are bean counters or accountant/analyst based, in other words bureaucratic members that slow down decision-making and care more about numbers than product.

As we can see from some of the names above, there are two former Toyota presidents on the board that helped contribute to Toyota's troubles over the past few years, presidents who cared more about volume than quality. I wouldn't be surprised if they are cut from the board.

Sulu

I am not aware of the rules of corporations in Japan, but here in North America, members of Boards of Directors have 2 general responsibilities:

1. Represent the interests of the shareholders. They are supposed to be elected by the shareholders, although in some corporations, "rubber-stamping" may be more appropriate.

2. Look out for the long-term viability of the corporation. Appoint the most senior executive manager (CEO / President / General Manager or whatever title the most senior manager has) and perhaps appoint the members of the executive who report to the CEO / President. It is the responsibility of the executive managers to manage the day-to-day operations of the corporation. These senior managers may or may not also be members of the board of directors.

I am assuming that the 2nd responsibility above is similar for boards of directors anywhere. Members of Boards typically are older, with much business (or political) experience, but not necessarily experience in the business of the corporation they oversee. So board members of auto manufacturers like Toyota or GM may not all have experience working at Toyota or GM. The immediate past CEO of GM, Ed Whitacre, had no experience with an automaker, but had a career in telecommunications before joining GM as its Chairman of the Board and CEO. Ford's current CEO, Alan Mulally, did not have experience with an automaker either prior to his current appointment, but had a career at Boeing, the airplane manufacturer.

Business (or political) experience seems to be favoured, not "young people with new ideas". New ideas has its place in the (junior) management of the corporation, not the board of directors.

TRDFantasy

^^

Good post. As I also mentioned, new ideas are not necessarily "good" ideas.

GS69

Toyota Tries to Avoid Becoming GM w/ a GM-Like Reorganization

Safety is 1st, then environmental quality. The board will be cut from 27 members to 11 (it had 54 members 8 years ago). Emerging markets will be a larger piece of its business, and all this will contribute to Toyota’s goal of raising consolidated operating return on sales to 5%.

Scion Akio Toyoda outlined this plan, this “Global Vision” in Tokyo. It’s a kind of reorganization, an effort to avoid being caught in the kind of trap that did General Motors in and allowed Toyota to pass it in global sales some 3 years ago.

Toyota doesn’t expect to let Volkswagen AG pass it to become the world’s largest automaker – thus the concentration on emerging markets. The Japanese automaker sold 60% of its output in industrialized nations last year. It expects to have a 50/50 mix of sales to industrialized nations and emerging markets by 2015. Bloomberg reports that Toyoda said the company could sell 9 million vehicles per year by ’15.

Toyoda’s most important promise, though, is that his company “will build a global framework in which 1) the global headquarters will provide overall direction and furnish support for initiatives undertaken by the regional operations and 2) regional operations – the company’s customer interface – will decide on their own how best to serve their customers.”

It’s the strength of number 2 that will determine how well Toyota can recover from its quality and safety perception problems. If Toyota’s North American operations had been in charge of responding to unintended acceleration claims and the other problems that plagued the company here last year, the damage would have been less severe. Instead, Toyota Motor Corporation continued to call the shots from Tokyo, and it handled the crisis in a way consistent with its home market, where corporations have more power in relationship to the government, press and consumers than it has here.

The company’s operations here are called Toyota Motor Sales U.S.A., which means “sales and marketing.” That doesn’t entail its production, or any of the other functions that Toyota claims makes it as much an American operation as a Japanese one.

Most of Toyoda’s presentation centered on promises of continuous improvement and of contributing to communities while trying to exceed customer expectations. Its Global Vision even has a tagline: “Rewarded with a smile by exceeding your expectations.”

To wit: “Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way.”

Touchy-feely platitudes aside, Toyota says it will launch “about 10 more” hybrid models by 2015, while continuing to develop a full range of plug-in hybrids, pure electric vehicles and fuel cell powertrains, while continuing to improve conventional gasoline engine fuel economy. It will “position Lexus as a truly global premium brand” by offering a growing range of Lexus models in emerging markets, while expanding the Lexus sales network in established markets.

In North America and Europe, Toyota will “maximize productivity at existing plants and otherwise make the most of existing resources.” In other words, we’re not likely to get any new North American Toyota factories for a while, and may even lose some production.

Toyoda’s wish to revive passion in the company his grandfather built is addressed under “product appeal.” To “create great cars,” Toyota will “greatly improve the design and feel of Toyota models and make way for the leading role of localization in vehicle production.” Toyota will “offer genuinely exciting models that meet the needs of each market.”

Because Toyota 1st needs to restore confidence in a model lineup whose key attributes have been safety, reliability, efficiency and environmental responsibility, I’d suspect bland, competent sedans and hybrids will take precedence over the sports cars that Toyoda so much wants to build. The lineup won’t look much different than Toyota’s Geneva show stand: one FT-86 off to the side, overwhelmed by a fleet of Prii.