Page 61 - Toyota Under Fire

TOYOT A UNDER FIRE

One reflection in hindsight is that, in the United States,
at some point of time, we realized that the trucks were
increasing in inventory. Our truck inventory was build-
ing up from the end of May through the beginning of
June [2008]. Toyota’s culture is to build only what is
sold, only what is demanded from the market. But we
did not keep true to this philosophy; we were not swift
enough or quick enough.

Toyota’s response to the Great Recession was radical—radical
in that it didn’t involve the expected steps: there were no fired ex-
ecutives, no massive layoffs, and no plant closings. Instead, it fol-
lowed TBP and the Toyota Way to find ways to put the company
on a solid footing during the worst of the downturn while con-
tinuing to invest in the future. That involved revisiting the com-
pany’s 10-year plan, Global Vision 2010, and replacing it with
Global Vision 2020. The long-term vision provided the guard-
rails and direction that would inform the short-term plan, cre-
ated by the board’s Emergency Profit Improvement Committee
(EPIC), for returning the company to profitability. The work of
the board on Global Vision 2020 and of EPIC were concurrent;
for clarity’s sake, we discuss them sequentially.

Global Vision 2020 and
Responding to the Recession

The Toyota board of directors began to define its approach to
the crisis with its usual intensive analysis. It listened to outside
experts on short- and long-term economic trends. Managing of-
ficers made detailed reports about their regions. Directors and
officers made personal visits to operations throughout the world.

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