Changes in Senior Management during Turbulent Times

The global automobile industry experienced turbulent change in 2009. In April, Chrysler Corporation of the United States filed for protection under Chapter 11 of the U.S. Federal Bankruptcy Code (similar to Japan's Civil Rehabilitation Act), followed by General Motors in June. The two companies received capital injections totaling approximately 100 billion U.S. dollars from the United States and Canadian governments and began the process of restructuring. Chrysler completed the legal procedures in June of that year to restart under the umbrella of Italy's Fiat, while General Motors completed the legal procedures in July, reemerging as a new company.

As the automobile industry was undergoing massive changes, Executive Vice President Toyoda was appointed president at a Board of Directors meeting following the June 23 general shareholders meeting, and a new management team was established. On the occasion of his appointment, President Toyoda issued a message entitled "To Toyota Employees" to all employees.

Under the new system, Executive Vice President Takeshi Uchiyamada remained in his position, and four senior managing officers were promoted to executive vice president, and in addition to their existing functions and field-specific responsibilities, they also took on new duties for individual regions around the world. The aim was to clarify the business and presence that Toyota seeks in each region with diversifying customer needs and to implement "region-centric" product development and product lineups.

On June 25, TMC held a press conference in Tokyo attended by President Toyoda and all executive vice presidents. At the press conference, President Toyoda announced a management policy that was generally the same as the message to employees and said, "Although the external environment played a significant role, as a management team that let the company fall into the red, we are ashamed. We have made our start under very tumultuous conditions, but we will make every effort to return the company to profitability as soon as possible."

Table 3-3 Summary of the speech given by President Akio Toyoda at his appointment (June 2009)

Founding philosophy
Toyota's founding philosophy was to contribute to the national economy by establishing an automobile industry. "Contribute" meant "enriching people's lives through car making" and "creating employment and enriching the local economy by paying taxes as a locally rooted company". In the beginning, Toyota fell into the red and could not fulfill even the basic duty of paying taxes. This was a great embarrassment since the company had to start over again from the bottom.
Crisis and growth
Toyota's 70-year history was filled with difficulties, including the postwar labor dispute, trade liberalization in the 1960s, and the trade dispute of the 1980s. However, Toyota managed to grow vigorously through each of these challenges, strengthening its cohesiveness as a group. Through the various crises it faced, Toyota built its corporate culture of "Customer First, Frontlines First", along with a good corporate structure for developing employees.
Determination toward recovery
As the 21st century rolled in, Toyota continued to expand at a rapid pace. Although expanding business size in order to satisfy customer needs was not wrong, taking on a task that was beyond Toyota's ability may have prevented Toyota from fully capitalizing on its inherent strength in terms of methodology and working mode. Toyota can definitely recover if we share the philosophy of "contributing to society through car making" anew and put into practice the ideas Toyota has valued, such as the Customer First concept.
Axle that does not shake
"Making ever-better cars" must for us be the axle that does not shake. Additionally, we must take to heart the knowledge that Toyota can only grow when we practice "Customer First, Dealers Second, and Makers Third."
Product line-up adjustment
Product development and product line-up must be driven by region. Local situations must be analyzed against Toyota's strength and abilities in order to identify the fields in which Toyota should forge ahead and those from which Toyota should retreat. We will proceed to right-size our product line-up itself.
Technical development
In addition to environmental technologies, which are the most important, we also need breakthroughs in technologies that will help people enjoy and get excited about riding and driving cars. Let's always try to reach one step higher so that we can provide cars that excite customers at prices they find affordable.
Lead players at Toyota
I would like you to take steps related to human resource development with a renewed sense of commitment. A company is not driven by its management but by each of its members. The employees who support the actual work are the lead players at Toyota. Only a company that can help all of its members develop into human resources possessing indispensable values will become a strong company.

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