Behind Toyota, always, stand the Toyodas
Family dynasty and its code changed automaking
James B. Treece is industry editor of Automotive News. He was the newspaper's Tokyo-based Asia editor from 1995 to 2007.
The auto industry has produced many celebrated dynasties: Ford, Michelin, Peugeot, Porsche/Piech. And Toyoda. At their best, the great automotive families provide continuity and stability. At their worst, they can destroy companies with their feuds and next-generation incompetence.
The Toyodas long have represented the best of the best — an exemplar of family control in any industry.
While largely shunning the spotlight, family members led the company through its years of astounding growth. The Toyoda family has displayed a deep commitment to the business and to manufacturing and have maintained strong personal ties to the United States.
THE FOREFATHER: SAKICHI TOYODA
It all began with Sakichi Toyoda, who was born in 1867. Hailed in Japanese school textbooks as Japan's Thomas Edison, he was an inventor who poured out ideas his entire life.
His crowning achievement was an automatic loom. It stopped automatically if a thread broke, thus ensuring that the machine didn't continue to weave faulty cloth.
How fitting that Toyota Motor Corp.'s origins trace back to a machine that, in effect, stopped the line rather than continue to make a defective product.
From looms, the Toyoda clan moved into other machinery, textiles and a host of other industries. The emphasis was always on making things.
Sakichi's son, Kiichiro Toyoda, steered the family into the budding automotive business. Sakichi's nephew, Eiji Toyoda, and Kiichiro's son, Shoichiro Toyoda, led Toyota Motor during its expansion era.
Members of a third branch of the family never have held senior positions at the automaker, serving instead as heads of a number of Toyota Group companies that make auto parts. Maybe that is why Toyota Motor has never treated suppliers as cavalierly as some carmakers do.
In 1967, Eiji became president of Toyota Motor Co., the manufacturing arm. Earlier, when Toyota Motor was preparing to expand from trucks by entering the car market, he had spent several months in the United States, studying Ford Motor Co.'s methods. It was the start of a long tradition of Toyoda family members with personal ties to the United States.
Shoichiro took over as president of Toyota Motor Sales Co. in 1981. The next year the manufacturing and sales arms merged. He became president of the newly formed Toyota Motor Corp. Eiji was chairman.
Shoichiro oversaw the launch of the Georgetown, Ky., plant in 1987. He sent Fujio Cho, who always enjoyed close ties to the family, to be Georgetown's first manager.
Eiji is enshrined in the Automotive Hall of Fame in Dearborn, Mich. On Oct. 16, Shoichiro was inducted as well.
Today, the next generation of Toyoda scions stands ready to take over. Shuhei Toyoda, 60, Eiji's son, is the president of interior supplier Toyota Boshoku Corp. He moved to the parts maker after a career at Toyota Motor. At one point he led Toyota in Europe and seemed a candidate for the carmaker's top job.
Akio Toyoda, Shoichiro's son, graduated from Babson College in Massachusetts. The school's mission is to educate scions of family-owned companies so they can take over the business. Edsel Ford II is another alumnus.
Akio later worked at New United Motor Manufacturing Inc., Toyota's joint venture with General Motors in Fremont, Calif. He also headed Toyota's China business, all manufacturing across Asia and its purchasing operations. Today, Akio, 51, is in charge of Japan sales and is widely considered a likely future president of Toyota.
If Akio becomes president, it would not be a return to power for the Toyoda family. They never really left. True, the last three presidents of Toyota Motor Corp., including incumbent Katsuaki Watanabe, came from outside the family. And it also is true that the family's official control of the carmaker is weak. No member of the family owns more than 4 percent.
But influence? That's another matter. When Toyodas speak, the company listens.
As several tales in this special issue show, many of the most critical choices that Toyota Motor faced were decided by someone named Toyoda: setting up NUMMI, launching Lexus. The list goes on.
Even today, Shoichiro, 82, shows up sometimes at new-vehicle launches. He stands quietly in the background. He's not there to upstage the current management. He just wants to see for himself how things are going. It's the Toyota tradition of genchi genbutsu — go and see for yourself.
And Eiji, 94, is known to send e-mails to company managers from a laptop attached to his walker at the hospital where the aging patriarch lives.
Why would anyone listen to a nonagenarian with no official title at the company? Because he has earned their respect.
Respect for the family is deeply ingrained at the carmaker. Current President Watanabe makes that clear. He devoted a good part of his latest press conference on the company's business plan to the Toyoda Precepts (see list above). The language may seem antiquated, he said, but these dictums, laid down by Sakichi Toyoda, are enduring guidelines that are as relevant to Toyota's success today as they ever were.
Cars come and go. But at Toyota, the influence of the family continues, and the company is the better for it.
You can reach James B. Treece at firstname.lastname@example.org.