TOKYO -- After four tumultuous years of natural disasters, recalls and record losses, President Akio Toyoda is restructuring Toyota Motor Corp. to empower regional CEOs to anticipate problems and respond quickly.
The new structure is less insular and more international. Toyoda essentially has signed off control of half the globe to non-Japanese executives.
In the sweeping management shake-up, Toyoda has named non-Japanese CEOs to lead operations in North America, South America, Europe and Africa. Said Chairman Fujio Cho: "We have taken a step forward to be truly global."
Take Jim Lentz, a managing officer in charge of Toyota Motor North America and Toyota Motor Sales U.S.A., who was named to the new post of North America CEO. Lentz will run solo, with no Japanese shadow executive east of Tokyo.
And Kazuo Ohara, Lexus' global executive vice president, will be transferred to California to head Toyota Motor Sales U.S.A., reporting to Lentz. That shuffle upends the historical setup of an American executive heading Toyota Motor Sales under a Japanese boss who resides in North America.
Toyoda is putting his personal stamp on the company founded by his grandfather. After shareholders approve the changes, only three of the automaker's 16 board members will predate his becoming president four years ago. Cho is among those leaving the board, but he will take the title of honorary chairman.
The changes also reflect lessons learned in those four years.
"From what we saw before and during the global financial crisis, Toyota was hamstrung by insularity and slow decision making," says Clive Wiggins, team leader for Asian autos at Macquarie Capital Securities in Tokyo. "This is another step in the road of Toyoda trying to address those issues."
Other components of the massive management overhaul:
- Swapping into Ohara's old role will be American Mark Templin, who was Lexus International's global marketing chief. Now he will be the first non-Japanese executive to lead a Toyota division at the company's global headquarters in Toyota City.
His job leading Lexus' global marketing and product planning will remain the same but he will be promoted to managing officer at the parent company, just two steps down from the board, and become executive vice president of global Lexus. Templin oversees product planning, sales, marketing and business planning, while still reporting to his old boss, Kiyotaka Ise, who retains control of Lexus r&d. Another Japanese executive is in charge of Lexus design.
- For the first time, Toyota will have outside directors. One of the three outsiders will be Mark Hogan, a former General Motors vice president. He will be the first non-Japanese on the board since 2007, and only the second one ever.
- Operations will be divided into four business units, covering mature markets such as the United States and Japan, emerging markets, components and Lexus.
- Toyoda will assume direct control over all things Lexus at the new stand-alone Lexus International unit. While the company's other business units have an executive vice president in charge who reports to Toyoda, the president cut out the middleman for Lexus.
"For daily operations, we plan to implement a more agile and autonomous business unit type of structure that will enable the executive vice presidents in charge to accelerate decision-making," Toyoda said.
The moves represent a stark change from three years ago, when Lentz testified to Congress that Toyota's U.S. sales arm had to await permission from Toyota's board in Japan before taking action in response to allegations of unintended acceleration in its vehicles.
Since then Toyota has ramped up local decision-making authority involving safety and recalls, and streamlined the reporting process to Japan.