TOKYO - The naming of Fujio Cho as Toyota Motor Corp.'s next president signals the reassertion of control by the founding Toyoda family over Japan's largest automaker.
Ironically, it also elevates a man who may promote more non-Japanese to positions of authority.
Cho planned and then led the launch and first several years of Toyota's successful manufacturing complex in Georgetown, Ky. He was there from 1988 to 1994.
'He is really symbolic of a whole cadre of Japanese employees' who have gone from Toyota City and 'achieved a broader perspective,' said John Shook, co-director of the Japan Technology Management Program at the University of Michigan.
Shook, who joined Toyota in 1983 in Toyota City, later worked with Cho in supplier development in Kentucky.
Analysts do not expect policy to change when Executive Vice President Cho, 62, takes over from current Toyota President Hiroshi Okuda, 66, after the shareholders' meeting in late June. That means Toyota will continue its aggressive expansion abroad as well as its push toward vehicles that are more environmentally friendly.
KINDER, GENTLER REFORMS?
Cho's genial style might lead to a kinder, gentler approach on some of the reforms that Okuda has promoted since he became president in September 1995. They include paying greater attention to shareholder concerns and promoting managers based on merit rather than seniority.
Okuda's programs have upset some members of the founding Toyoda family, who felt that his promotion of stock options for executives, for example, was undermining their authority.
Eiji Toyoda, 85, now honorary chairman, and others also apparently felt that Okuda, the first president from outside the Toyoda family since 1965, should have been more deferential to the family while dipping often and deeply into the company coffers to finance new plants from India to Indiana.
'Okuda tried to turn the corner too quickly. Cho is necessary to strike a balance between Okuda's go-go reforms and the family,' said Takaki Nakanishi, auto analyst at Merrill Lynch Japan.
Okuda will become chairman, and current Chairman Shoichiro Toyoda, 74, will be honorary chairman. Eiji Toyoda will become 'supreme adviser' to the company. Vice Chairman Iwao Isomura, 66, retains his post.
Typically in Japanese companies, the president functions as chief executive, while the post of chairman is more ceremonial. Shoichiro Toyoda said that at Toyota, Okuda will effectively be Toyota's CEO and Cho will be COO.
Although Shoichiro Toyoda will give up voting rights on the company's board, he dismissed concerns about a diminution of the Toyoda family's influence. Cho is a close confidant of the Toyoda family. Moreover, younger Toyoda family members are waiting in the wings for nomination to the board, although not necessarily this year.
Shuhei Toyoda, 51, who formerly worked at Toyota's Burnaston plant in the United Kingdom and now serves in the engineering ranks, is considered too young for a top management position. So is Akio Toyoda, 42, currently stationed at New United Motor Manufacturing Inc., the Toyota-General Motors joint venture plant in Fremont, Calif.
Okuda and Cho are believed to be on good working terms, though not close personal terms.
Okuda has a finance background; Cho rose on the manufacturing side. Cho spent 18 years refining the Toyota Production System under the tutelage of the system's legendary architect, Taiichi Ohno. Cho currently heads Toyota's corporate planning, information technology and telecommunications business and also heads industrial vehicles and equipment.
The blunt-speaking Okuda likes to make decisions quickly. Cho is a more affable manager who prefers to guide rather than command subordinates.
As Toyota continues its current rapid expansion of manufacturing capacity in North America, Europe and elsewhere, Cho's comfort with foreigners could move Toyota farther down the path toward greater localization.
At a time when some Japanese carmakers were not sensitive to minority concerns, Cho put in place a hiring program in Kentucky that sought to recruit African-Americans for 13 percent of the work force, well above the statewide average of 7 percent of the population.
'Toyota is still struggling with localization, as are all the Japanese carmakers,' said Shook. 'The Japanese have different thoughts on that. Some think it's OK for the Japanese to still run the show; some think they should. Some think it's regrettable, but they have no choice.
'Cho was, for someone that senior, very positive and very sincere in his belief that Americans should be running management.'