The American who’s out to transform Toyota

TOKYO — From his glass-walled office high above central Tokyo, James Kuffner keeps a running computer file of "crazy ideas" for whenever a moment of genius strikes.

Toyota's newest board member and resident robotics wizard gets lots of bolts from the blue.

One of his latest: a high-rise rooftop landing pad for flying cars that can pop up and open like a parasol, saving a lot of space compared with traditional heliports with their big painted "H."

"When the vehicle wanted to land, you could land on it. And when it's not being used, it could actually fold up and store away, maybe even underground," Kuffner said with an inventor's twinkle in his eye. "That's one idea I thought was good. Some people said that's crazy. But it's trying to think about the future of mobility and see what kinds of ideas we can bring to bear."

Just in case, Kuffner made sure to apply for a patent.

Even more visionary is Kuffner's big idea for transforming Toyota Motor Corp. from a traditional automaker into a software giant that churns out autos as fast and flexibly as today's tech companies make smartphones. If he can engineer that, Toyota could jump to the forefront of a truly new era.

Kuffner has been tapped to make that revolution happen, and he says huge changes are in store for Toyota. In the coming decade, a new vehicle "operating system" will be deployed in Toyota cars and sold to other automakers. Software will become a growth business for the company. And perhaps most crucially, breakthroughs in digitalization could slash vehicle development time in half, bringing Toyota's product rollout cadence more in line with that of Silicon Valley.

The key, Kuffner said, is embracing the truth that in today's auto industry, software is king.

"The reality is that every car company is a software company already. It's just that they either haven't recognized it, or they're not good at it," said Kuffner, who will head a trio of new Toyota subsidiaries charged with creating the advanced toolbox for making tomorrow's cars. "To have successful mobility products in the future, we need excellent hardware and excellent software."

Toyota President Akio Toyoda is so sold on the vision that he appointed Kuffner — an alumnus of Google's car project — to be the newest director at Toyota. Shareholders approved the goateed computer guru in June, making the Portland, Ore., native only the second non-Japanese person on the current board, after British external director Philip Craven.

In an interview, Kuffner, 49, talked about his blueprint for a new software-centered company. His meteoric rise into Toyota management illustrates how the automaker is suiting up for battle in an industry under siege by the advent of electrification, autonomous driving and connectivity.

Kuffner's career arc is a rare one at hidebound Toyota, perhaps the most Japanese of Japanese blue chips.

Those rising through the top ranks traditionally are Japanese nationals steeped in Toyota's idiosyncratic corporate culture and proud manufacturing heritage.

But Kuffner joined the company only in 2016 — and not in its mainstay automotive business but to help set up an autonomous driving unit in California called Toyota Research Institute, or TRI.

In 2018, he was tapped to be CEO of another new spinoff, this time in Japan — the $2.8 billion Toyota Research Institute – Advanced Development, or TRI-AD. His mission there was to create autonomous driving cars, a task so big he once described it as "the moonshot of my generation."

In Japan, Kuffner also is Toyota's chief digital officer and an executive adviser to the automaker's Advanced R&D and Engineering Co. He brings bona fide computer genius to a carmaker better known for bending metal. Under Kuffner's belt are some 50 patents and 150 technical papers. He is the co-inventor of an algorithm for planning robot motion called the Rapidly-exploring Random Tree and is credited with coining the term "cloud robotics."

Kuffner is now in charge of three Toyota subsidiaries that will start operations in January, and TRI-AD will be subsumed into them. Their job is to create the toolbox for tomorrow's smart cars. That covers everything from the guts of autonomous vehicles, connected vehicles and new mobility gadgets to newfangled onboard operating systems, city-of-tomorrow infrastructures and high-definition digital mapping.

Toyota plans to pursue this new reality through the three new companies: Woven Core Inc. will focus on automated driving. Woven Alpha Inc. will pioneer new businesses in connectivity, software and mapping. And both will be overseen by an umbrella company called Woven Planet Holdings.

As a sign of how important Toyoda thinks this new direction is for the company's future, the scion of the founding family said he is "investing a significant amount of my own money" into the Woven project.

Toyoda's son, Daisuke, is a senior vice president at TRI-AD.

"I want Woven Planet to be a true, new model for Toyota Motor Corp.," the company president said while announcing the creation of the Woven companies in late July.

"Because Toyota was successful in the past, we tend to think, why do we need to change? But will existing business models ensure success in the future? That is uncertain," Toyoda said. "Even if something's been successful in the past, let's discontinue that and move on to new activities."

The fact that Kuffner is just 49 is significant because it means he likely will be around long enough to shepherd a business transition that could continue for many years beyond the tenure of 64-year-old Toyoda, said Christopher Richter, an auto analyst at CLSA Capital Partners Japan in Tokyo.

"Toyota is one of the manufacturers that gets it, that the world is changing in a big way," Richter said of the deep dive into software. As sheet metal, motors and other components become commodities, automakers will have to find profits in software and digital endeavors, such as on-the-go connectivity, Richter said. Companies such as Tesla, he noted, have an early lead.

"This is the field where companies are going to differentiate themselves," Richter said. "And they're not going to have a chance of winning if they don't at least try."

And many other manufacturers aren't trying, he said. "Toyota is better positioned than most, but there's no guarantee."

Woven envisions a slew of products. The one with the greatest potential may be Arene, an open automotive operating system that will allow for "programmable cars."

Kuffner says this system will be as groundbreaking as Microsoft Windows and Apple iOS were for personal computers and smartphones, ushering in a new era for automobiles.

Arene's advantage is that it will allow a vehicle's software to be developed in parallel with its hardware, slashing overall development time.

"I think half the time is achievable," Kuffner said.

The old way of developing a vehicle involves choosing the hardware first, integrating all the software running each component and then testing the system. Under Arene, engineers will create an overarching software architecture that runs everything in the vehicle, then choose the hardware.

That allows engineers to separate software and hardware development and do both in parallel, saving time and making it easier to update vehicles with the latest technology. Rollout also is faster because software can be developed and tested the same day, thanks to cloud computing.

"It is not so uncommon to have a brand-new car where the software looks 5 years old," Kuffner said. "What Arene provides is forward and backward compatibility. I can develop a software feature today that will run on future vehicles and future hardware. And current hardware of today will be able to run future software and future features."

The inspiration for Arene came when he was at Google working on the tech company's autonomous driving program, Kuffner said. The test cars were Prius hybrids, and Kuffner found reprogramming the car's software systems laborious.

"I was thinking, there must be an easier way to develop and deploy new software on a Toyota car," he said.

Thanks to Kuffner, Toyota now has a shot at a better way.

His team has deployed Arene in a fleet of test vehicles over the past year and has provided it to partner companies for evaluation.

Kuffner didn't say specifically when Arene will be commercialized but said two years is a reasonable timeline in the high-tech field. Success, he added, hinges on quality and reliability because safety is paramount in the auto industry, with zero tolerance for software glitches.

Arene is being developed by Woven Alpha, which Kuffner predicted will expand rapidly and eventually sell its software toolbox to other companies.

"Alpha is meant to be the engine for hypergrowth in our company," he said. "We are having these new initiatives under Woven Alpha which I expect to be much more high-growth areas that have huge impact and disruptive potential.

"We have a vision that goes beyond Toyota."

About 560 people work at TRI-AD. Kuffner targets an overall staffing level in the "five digits" by 2025.

To attract international talent, TRI-AD tries to channel a funky Silicon Valley vibe. Its Tokyo office has an open layout, well-stocked pantries, panoramic views of the capital city and a fleet of scooters for employees to zip around the premises.

Kuffner's office is the first thing visitors see when they enter. The boss is not sequestered beyond view, as is typically done in Japan. English is the official working language, another rarity in Japan. But while Tokyo is a clean, safe and efficient city, it is not always a comfortable fit for non-Japanese people, so luring the world's best to the neon-lit metropolis isn't always easy. Kuffner may find it easier to settle in thanks to his Japanese wife.

Kuffner, a self-professed Star Wars and Star Trek fan, came to Japan as a graduate student in 1995 because he was fascinated with robots, especially walking, humanoid ones.

Back then, he said, Japan was home to about three of every four robots on Earth. The country was the place to be for anyone serious about robotics.

"I was totally blown away by what Japan was producing," he recalled.

Even though Kuffner has been entrusted to engineer Toyota's bold, new digital future, Toyoda makes sure to keep him anchored in the company's carmaking roots. In the summer, Toyoda the car-guy boss wowed the new board member by buckling him into the passenger seat of a new GR Yaris hot-hatch for some stomach-churning hot laps and drifting action.

To Kuffner, whose job is developing self- driving cars, riding shotgun was a real eye-opener. It convinced him that hands-on driving will never completely vanish, just as people still like riding horses.

"We talked a lot about the connection between the driver and the car," Kuffner said of his time with Toyoda. "Fifty years from now, it will not be necessary for anyone to know how to drive. But if you like it, you have a choice, and you can enjoy it. So I see a world where it won't go away. I think there's something amazing and exhilarating about driving. Being fortunate enough to actually experience and learn from the master driver is one of the great privileges of my job."