Toyota Plans to Cut Size of Board: Report
Japan’s Toyota Motor is set to unveil a long-term strategic plan on Wednesday that will sharply reduce the size of its board and focus on emerging market growth, a report has said.
The world’s largest automaker will aim to sharply cut the number of board members, a move that has stoked tensions within the Japa- nese firm’s management, the Wall Street Journal reported.
The widely anticipated plan will provide Toyota with a blueprint for the decade and also give a glimpse of president Akio Toyoda’s manage- ment style and goals, the report said.
Toyota’s “2020 Global Vision” is set to mark a new chapter for the world’s largest automaker after it was hit by the double whammy of the global financial crisis and millions of recalls that have tarnished its once stellar reputation.
In 2008 Toyota ended General Motors’ 77-year reign as the world’s largest automaker, but since then the Japanese giant has faced the impact of the economic crisis, recalls, a shrinking domestic market and a strong yen.
On Friday it suffered a fresh setback when ratings agency Standard & Poor’s downgraded the carmaker to “AA-” from “AA”, citing “weak profitability”.
While the automaker has declined to give details about the new strategy prior to its formal announcement, the WSJ cited sources as saying it plans to roughly halve the number of board members from the current 27.
The reduction is seen as an effort to speed up decision making, after Toyota last year announced steps to reshape global operations to improve the recall process.
But detractors view the shake-up as an effort to consolidate power, the WSJ said, with some insiders viewing it as part of a struggle for influence pitting the Toyoda family against non-family factions.
Toyoda, the publicity-shy grandson of the company’s founder, was thrust into the spotlight by the recalls amid criticism that he had been insufficiently proactive.
Previously lauded for its safety, Toyota became mired in crisis when it recalled nearly nine million vehicles between late 2009 and February last year due to brake and accelerator defects linked to deadly accidents.
As criticism mounted of its slow response and bureaucratic inflexibil- ity, Toyota tightened its recall policy and has pulled around 16 million units since late 2009 over a range of issues.
Like other Japanese exporters, the auto giant is grappling with a strong yen that makes its products less competitive overseas amid fierce rivalry with manufacturers in emerging markets such as China.
The report said Toyota’s new vision will also formally incorporate emerging markets such as China and India into the car maker’s long- term goals.