Toyota Calls Management Shuffle a “Now-or-Never” Move

Toyota Motor Corp.’s latest management overhaul is “about surviving or dying” in a rapidly changing auto industry, says President Akio Toyoda.

Citing “unprecedented” competitive shifts, the company says its effort to diversify and streamline top management is a response to “a ‘now or never’ situation in which not a moment can be spared.”

The industry has entered an era where there are no “correct” answers, Toyoda observes. He says the company’s new round of senior appointments ignores seniority in favor of installing leaders—including some from outside the company—with high levels of expertise and the ability to “deliver quick judgment, quick decisions and quick action.”

The assignments build on restructuring that President Toyoda began last year. The new architecture shifted the company from a function-based to product-based structure. It has turned Toyota into seven more focused units with independent decision-making authority. It also created executive general manager positions to oversee specific technology areas.

This week’s management plan strengthens the carmaker’s relations with key group companies, such as Denso Corp., by appointing some of their top managers to key positions at Toyota. It also elevates the company’s first female chief engineer, Chika Kako, to executive vice president of Lexus International Inc.

The moves also appoint Gill Pratt, head of the Toyota Research Institute in Silicon Valley, to the newly created position of Fellow, a vice president-level title that honors the highest level of technical expertise within the company. Other such appointments are likely in the future.