Toyota Names Founder's Grandson as New President

Jan. 20, 2009
Akio Toyoda will replace Katsuaki Watanabe.

Toyota Motor on Jan. 20 named Akio Toyoda as its new president, turning to the grandson of its founder to rescue the company from its biggest ever crisis. The 52-year-old family scion is expected to put the brakes on Toyota's rapid expansion, which put the company on course to become world number one, but also left it vulnerable to the current industry slump.

Its new president is the grandson of Kiichiro Toyoda -- who founded the automaker in 1937 -- and the son of former president Shoichiro Toyoda. Akio Toyoda became a board member in 2000 and was made an executive vice president in 2005, taking charge of Japanese sales and overseas operations. He will replace Katsuaki Watanabe, who will become vice chairman in June. Fujio Cho will remain chairman.

"The company needs radical structural reforms," said Watanabe "Mr. Toyoda is the most suitable person to carry out radical reforms with young ideas, a new perspective, sharpened senses and the ability to take brave action," he said.

Toyoda has long been groomed for the top job, although his ascent was not expected to be quite so rapid as he is still relatively young for a president of a major Japanese company. He will be the first member of the founding family in 14 years to take the helm, and he does so at a crucial time for the company."I will assume the heavy responsibility of navigating Toyota through an unprecedented crisis," Toyoda told a news conference. "At the moment, I just feel sobered by the heavy responsibility," he said.

Toyota is famed worldwide for its efficient production methods but expects its first-ever operating loss this financial year due to the economic crisis.

Toyota hopes the founding family scion can unite the company during the current crisis, which is forcing it to slash jobs and production, said Mamoru Kato, an auto analyst at Tokai Tokyo Research Center. "The appointment will also promote the rejuvenation of the company, enabling management to rebuild its growth strategy. He is likely to correct the company's expansion policy and draw up a new path to follow," Kato said.

Toyota has expanded its global production facilities in recent years to meet brisk demand, particularly for its fuel-efficient cars, leaving it vulnerable to the current slump in worldwide sales.

Toyota said on Jan. 20 its global sales fell 4% in 2008 to 8.97 million vehicles, the first drop in a decade, as demand slumped in recession-hit markets such as Japan, Europe and the United States. The company has moved to cut production, jobs and investment as a slump in sales and a soaring yen take a heavy toll on its finances. In November the company said it might halve its temporary payrolls to 3,000 by the end of March, but it said on Jan. 20 it had no firm plans for its remaining temporary workforce.

Copyright Agence France-Presse, 2009

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