Page 57 - Toyota Under Fire

TOYOT A UNDER FIRE

When the loss was announced, reporters began calling daily
to ask for comment. “What will Toyota do now that it is in crisis?
Whose decision was it to introduce the Tundra and build a new
plant dedicated only to these large fuel guzzlers? Who is getting
fired over the decision to build the new plants? Will the president
be fired?” they asked.
Those are natural questions from the press when a company
announces a $4 billion loss. We’ve become conditioned to the
ways in which businesses react to losing money: executives lose
their jobs; plants are closed down; people are laid off; projects are
canceled; assets are sold. It’s a fairly predictable recipe. In fact, it
is the recipe that most of the automotive industry followed—and
not just the American companies that were operating at marginal
profitability or even at a loss before the recession. Nissan, for in-
stance, dumped 12 new models and laid off more than 20,000
people. A CNN article in July of 2010 reported that the automo-
bile industry in the United States alone laid off 300,000 workers
because of plant closings;* the CEOs of Chrysler, GM, and Kia
lost their jobs. The CEOs who kept their jobs generally wielded
a sharp axe. Ford’s CEO, Alan Mulally, was named to a think
tank’s list of CEOs with the highest pay who laid off the most
workers—in his case, nearly 5,000 workers in 2009 on top of ear-
lier cutbacks in 2008.†
At Toyota, a management transition had already been
planned for 2009 before the recession hit: Akio Toyoda was to

* Chris Isidore, “7.9 Million Jobs Lost—Many Forever,” CNNMoney.com,
July 2, 2010; http://money.cnn.com/2010/07/02/news/economy/jobs_
gone_forever/index.htm.
† Huffington Post, “The 10 Highest-Paid CEOs Who Laid Off the Most Work-
ers: Institute for Policy Studies,” September 1, 2010; http://www.huffington
post.com/2010/09/01/ceo-pay-layoffs_n_701908.html#s133350.

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