Toyota is boosting investments in personnel as a way of giving back to the people working at its suppliers and dealerships. What drove this decision?
On November 6, Toyota Motor Corporation announced its financial results for the second quarter of the year to March 2025.
One key point in these results was increased investment in human resources and growth areas for the second half of the year, pushing the initial figure of 700 billion yen up to 830 billion.
While personnel investment is a regular topic at the annual labor-management discussions, this year’s talks reached beyond company lines to ensure that funding was allocated to labor costs, training, and improving conditions for those working at dealerships and suppliers.
The latest results certainly didn’t show an increase in earnings. In such circumstances, holding off on additional investments would have been a reasonable response. And yet, as Executive Vice President and Chief Financial Officer Yoichi Miyazaki stated emphatically, Toyota has “no reservations about increasing investment in human resources.”
To explain the mindset behind this decision, we share several exchanges between reporters and Toyota’s leaders at the financial results briefing.
Responding to real needs
Amid difficult results (operating income down 4% year-on-year), what was the purpose of increasing investment in human resources at this particular time?
Masahiro Yamamoto, Chief Officer, Accounting Group
We certainly do not regard these as difficult results. Even with 370,000 colleagues (employees) unable to make cars, we continued to make concerted efforts, discussing the problems faced by the genba and possible improvements.
Each day, we worked to take another step forward, and the result was a first-half operating income of 2,464.2 billion yen.
Though I don’t know if this is the right way to frame it, the past two years are the only times we have achieved results above 2 trillion yen.
I believe this has been underpinned by the efforts of our stakeholders and 370,000 employees.
Instead of management waiting for information to reach us in the boardroom, we went out to the genba and listened to people’s concerns. Only then do we hear the feedback that enables us to make concrete investments in human resources.
This spurred us to tackle problems with swift decisions and actions.
As momentum built, this has required additional investment on top of the initial figure. With efforts underway, we hope that the positive impact of human resources investments will be acknowledged.
These extend beyond merely Toyota to our subsidiaries and overseas suppliers. Please understand the increase as an identification of these needs.
Vice President Miyazaki
At the risk of sounding arrogant, our approach to management is not about merely producing the numbers for this fiscal period.
We are focused on advancing Japan’s auto industry in the medium to long term, including its many stakeholders and 5.5 million workers. We had no reservations about increasing investment in human resources.