Toyota announced its vision for the Group's future direction: "Inventing our path forward, together." As the person responsible for guiding the Group, here is the message delivered by Chairman Akio Toyoda, along with questions from the press.
Being responsible for the Group
As the person responsible for Toyota, what specific initiatives will you tackle in the immediate future?
Chairman Toyoda
I can’t offer any specific initiatives, but I want to start by acting. Today, in front of company heads and genba leaders, I called for “inventing our path forward, together.”
And I also asked them each to consider the fact that I restored Toyota’s authority as a company back to the genba, to the products.
My next action will be to attend this year’s shareholder meetings for all 17 companies. I told them that I wanted to see and study their companies through the eyes of a shareholder.
When I chaired Toyota’s meeting, some shareholders commented that they could not attend all Group company meetings because the schedules clashed.
Now, they are all held on different dates. I want to take the opportunity to attend the annual meetings and see the Toyota Group from the perspective of its shareholders and stakeholders.
Since we have a few months until the shareholders’ meetings, I hope to discuss what we thought about and did in the interim.
Many people look to Toyota and the automotive sector, the leaders of Japanese industry, to do the right thing. In pursuing transformation, how do you view the responsibility of the management teams leading Daihatsu and Toyota Industries Corporation? To prevent recurrence, does Toyota plan to revise its ordering from the companies where irregularities occurred?
Chairman Toyoda
I consider Toyota to have been a failed company at one point, 14 years ago. Over those 14 years, I worked to transform the company in many ways.
The companies that committed these irregularities did something they should not have done. In response, I believe we have to be prepared to rebuild the companies.
Rebuilding means leveraging the strengths of each company. The work they have done up to now—the work they devoted their lives to—will not be wasted.
As the person responsible, what I need to do is find ways of making these changes such that the people in these positions will be glad to be a part of our companies.
I am sure each company will announce how the changes will take place at the appropriate time. I hope you will continue to follow their progress. And since I have made clear that I am responsible, I will also be available for discussion.
What’s important is that any changes leave the people in these jobs glad to be part of the company. And that our resources are allocated in a way that allows us to plant seeds that we can cultivate and reap in the future. I think these are the two key points.
You spoke of being responsible for the Group as opposed to heading a company. On the other hand, regarding the misconduct at Daihatsu, decisions taken during your presidency placed many senior managers from Toyota within the wholly-owned subsidiary. How do you regard Toyota’s responsibility, and your own responsibility, in failing to detect the misconduct at Daihatsu Motor?
Chairman Toyoda
Why weren’t we able to detect it? Personally, the 14 years of my presidency, just as now, were far from uneventful.
To begin with, I took over the company in the red. From there, it was a series of crises, including the financial crisis, recall issues, the Great East Japan Earthquake, and flooding in Thailand. In all honesty, I was stretched to the limit.
Frankly, it took everything I had just to get Toyota back on its feet. It’s not so much that I wasn’t looking; I honestly couldn’t.
Becoming chairman last year (2023) was a major turning point. I figured that the chairman is not quite as pressed for time as the president.
My 14 years as president began by figuring out the essence of Toyota and creating a vision for the company.
Now, I want to set forth a vision for the Toyota Group and fulfill my role as the person responsible.
Then there is the reality that these are separate companies. Understanding the histories and relationships between the companies is about more than just capital ties.
I will lead the Toyota Group’s revitalization to ensure that all stakeholders—from the employees who work there to our business partners and customers—are eager to see the company grow further.
I hope you will take a long-term perspective and give us your encouragement.
The Group’s future
Toyota cherishes the TPS concept, but how do you plan to balance efficiency and quality?
Chairman Toyoda
The purpose of the Toyota Production System is not efficiency. It is to create a culture that drives improvement.
Problems inevitably occur at any company—you can take as many different steps (countermeasures) as you like, yet they will always happen.
Within the Toyota Production System is the concept of “managing abnormalities.” Controlling every normal aspect is extremely difficult. Instead, you clearly identify what is abnormal and what must not be allowed to happen. Then, you begin by correcting the areas that exceed these limits.
Then, by continuing the Toyota Production System cycle of kaizen (improvement), you move towards a better corporation.
Yet despite that, when you take on new challenges, problems will arise. The key is to find and eliminate them early, one by one, to avoid them becoming big problems such as these. I think we need to regain that kind of mentality.
That is why we first need a vision as our starting point. From here, I want to attend shareholder meetings, hear from many different people, and search for abnormalities based on our vision.
However, I have only been granted the same terms as everybody else: two eyes, two ears, and 24 hours a day, 365 days a year. What I alone can achieve is very limited.
Fortunately it is also true that, compared to my early days as Toyota’s president over a decade ago, I now have more colleagues who tell me the truth.
Working with the partners and networks I cultivated over those 14 years, I want to restore that kind of culture. I hope you will continue to follow us closely with a long-term view.
Following successive irregularities at Hino, Daihatsu, and Toyota Industries Corporation, many people suspect there may be other misconduct within the Group. Every report notes that people were unable to speak up even if they noticed the irregularities. It would be appreciated if you asked anyone who is currently aware of misconduct to come forward immediately. Also, in presenting your vision and taking responsibility for the Group, what goals do you have in mind?
Chairman Toyoda
As far as I know, there are no other irregularities.
If I had been responsible, I think what would have changed is the timing of announcements.
In the case of Hino, for instance, the public announcement came more than a year after I learned about the situation. Daihatsu took about six months, and Toyota Industries around ten months.
Had I understood the events from the outset, I would have announced them before the timeframes I just mentioned. Because I’m the one accountable.
When I attended the (U.S. Congressional) public hearings 14 years ago, I did so as Toyota’s president. But at Toyota Motor, there was a three-month gap before information reached the president’s ears.
Even as the head of the company, there was a limit to the information I could gather about what happened in the genba, and a gap of about three months.
Since then, however, at Toyota, “top-down” has meant top management coming down. In my actions and results, people have seen that information is something you go and obtain for yourself.
I, therefore, think that putting my name forward as the person responsible for the Toyota Group will help build a long-term commitment and a sense of reassurance that people can speak out about these things.
This morning, in front of all the company heads, I also received candid questions from our genba leaders. These were wide-ranging questions from diverse people, and I believe the climate that enables such conversations is something that I created over my 14 years. At the very least, we have employees who sense such a climate.
While I can’t solve everything, I have shown everyone who they can turn to when in doubt, or unsure whether they are doing the right thing.
I believe moving forward in this way, step by step, is important.
There are no end goals. As with the Toyota Production System, this is about continuous improvement, something we will keep doing.
If I were to offer one, it would be creating more people within the management who have the same sensors and sensibilities as myself.
After giving advice, guidance, and encouragement to nurture these sensors, my own personal goal would be to have the outside world acknowledge the Toyota Group’s wealth of human resources.
You say there are no end goals, but in what timeframe and form will we see the results of you taking responsibility? Are we correct to understand this as a strengthening grip on the Group? Will taking responsibility potentially strengthen the Toyota Group’s unity, including a revision of capital ties?
Chairman Toyoda
I couldn’t say how many years. I was president for 14 years before passing the baton to President Sato.
Serving as president, I realized there was no one at Toyota Motor who would tell me, “It’s time to call it quits.” I, therefore, felt I should decide on the timing myself, and in my 14th year, I resolved to hand over the presidency.
In essence, I felt that I had established Toyota Motor’s foundations as a carmaker and given it the strength to transform into a mobility company.
Moving forward, as we transform into a mobility company, we will have younger leaders supported by more diverse people.
Again, in the case of the Toyota Group, taking responsibility does not mean I’m taking up a position as a chairman or president.
However, I want to remain committed to restoring authority to the genba and our products.
I also want to tighten the Group’s grip in terms of the genba and products.
Although I’ve moved from president to chairman at Toyota Motor, my business card still reads “master driver,” and I also retain my roles as a decision maker and sensor in making ever-better cars.
As to whether I will be a master driver for Daihatsu, Hino, and Toyota Industries, I will not.
Aside from the difficulty of obtaining a forklift license or a special large vehicle license at this point, I would not be able to judge how cars made by Daihatsu should drive.
For that reason, this morning, I asked each company to start by establishing their own master drivers.
I hope you will understand that my grip starts with the selection of personnel.
I believe the job of a master driver is not only to determine how a car feels but also to serve as the final filter. I also think they should serve as the final filter for Daihatsu and Toyota Industries, where the problems occurred, and I would like to hear your thoughts.
Chairman Toyoda
Currently, the roles I have been assigned at Toyota are those of chairman and master driver.
In taking responsibility for the Group companies, I want to bring my role as master driver, not as Toyota’s chairman, to the forefront and exercise my grip through the products and genba capabilities.
I want the companies to select people who are not simply in charge of creating each brand’s flavor but can also communicate the role and mission of vehicles beyond the product concept, including the kind of cars they want to make and what these cars will accomplish.
I want to start by personally getting in a car with the people chosen by each company, to understand what kind of sensors they possess and what kind of dialogue they are capable of.
What’s more, I’m sure each company will select people based on their specs. This may not make for good dialogue, but I will respect each company’s will in their personnel choices.
On a different note, for this morning’s meeting, I asked for company leaders to be invited. From Toyota Motor, attendees even included the head coaches of sports teams and recreational study groups.
Unfortunately, Toyota Group companies chose by titles—by titles and by roles. I think we differ on this point.
I want to strengthen my grip not with titles but through the role of master driver. This is my way of doing it.
Though my methods may differ, I am certain that this path will lead to a product-centered corporate culture that values people. I hope you will appreciate this.
Towards a fresh start
Following questions from the press, Chairman Toyoda once again shared his thoughts as the person responsible for the Toyota Group.
Chairman Toyoda
Thank you very much for gathering here today on such short notice.
Since today was about presenting my vision, I did not go into the irregularities that occurred within the Toyota Group or the individual circumstances of the three companies, but I hope I have given you a slightly better understanding of my personal perspective and way of thinking.
In taking responsibility for a Group that did things it should not have done, I would like to once again apologize for the concern we have caused.
From today, however, I will be working as the person responsible for the Group, and ask for your continued encouragement.