"Trust is key."
released on May 2006
Founder of Toyota Motor Corporation
Respect for People has always been important to Toyota, and nowhere is this more evident than in the relationship among Toyota associates. Toyota presidents, chairmen and managers alike are quick to acknowledge it is the hard work of these associates which has enabled the company to become what it is today.
There has been only one exception to this rule throughout Toyota's entire history. In June 1950, during a postwar period of great hardship in Japan, the company was forced to choose between corporate restructuring and risking complete collapse. Then-President Kiichiro Toyoda battled for months for the sake of his employees, but ever-worsening conditions showed the company to be unsustainable without significant change. Recognizing that if the company disappeared, so too would the livelihood of all Toyota employees, Kiichiro realized that lay-offs could not be avoided. With sorrow in his heart, he explained the circumstances to his workers, which led to 1,600 voluntary retirements. Management then vowed this would be the first and last time such an event would come to pass at Toyota, and, in a gesture of respect to former employees, Kiichiro resigned from his position as president of the company.
This act marked a new beginning: with neither money nor facilities to its name, the company concentrated on nurturing its one remaining asset — its people. Toyota was able to recover by relying upon the invaluable resource of associates' knowledge and skills, with the lessons it had learned providing firm foundations for future growth.
Honorary Advisor Eiji Toyoda recalls: "From then on, we started building a framework of mutual trust between labor and management. The process was like building a wall, block by block." Toyota management realized that strengthening the company was necessary to safeguard the welfare of its employees and recognized that trust is essential to foster and support that strength. Toyota associates in all areas of operation must continue to work together "like a strong chain," in the words of President Watanabe, to nurture this culture of cooperation, which helps Toyota benefit people and society.
Today, Kiichiro's promise lives on, and Toyota is still putting its people first. The Toyota Way pillar of Respect for People continues to provide the framework for the company's growth. In the words of Eiji Toyoda, "Trust is key."
Reluctant restructuring: final negotiations to end the labor dispute and get the company back on its feet
Representatives of the labor union settle the dispute. Toyota's commitment to growth is a commitment to its associates that the events of 1950 will never be repeated.