March 6, 2013 at 4:15 PM ET
In an unexpected announcement, Toyota has announced a major shake-up in its global management structure that will significantly increase the role of the North American market – and senior U.S. executives, in particular.
The realignment positions Jim Lentz, who has been the top American executive at the giant Japanese maker, as its number one boss for all of North America. Meanwhile, the current U.S. head of the Lexus luxury brand will now become managing officer for Lexus International. And Mark Hogan, a former General Motors senior executive, will become the first American ever on the 76-year-old Toyota Motor Co.’s board of directors.
“These changes will help us to achieve sustainable growth and realize our global vision by giving more responsibility to each region, including our North and South American operations, so that they may develop and deliver even better products and offer the best service to our customers,” declared Akio Toyoda, TMC’s global chief executive and grandson of the maker’s founder.
Toyoda and other top managers have been promising to expand the company’s regional autonomy in recent years, especially in the wake of the 2009-2010 safety scandal that appeared to be worsened by the limited authority U.S. managers had to handle such problems.
Lentz was already in a senior position at Toyota Motor Sales, USA, the maker’s powerhouse sales subsidiary. But the shake-up announced early Wednesday expands his role, putting him in a position to oversee manufacturing and other operations in the Americas.
“Integrating Toyota’s North America affiliates under a more unified and streamlined management structure will significantly enhance local responsibility over operations, clarify decision-making and strengthen our ‘customer-first’ focus,” said Lentz in a prepared statement.
Japanese managers aren’t entirely shut out in the shake-up. Kazuo Ohara will now assume the role of U.S. sales chief, reporting to Lentz, while Osamu Nagata takes on a similar role in Canada.
But America’s voice in Toyota is clearly on the rise. Perhaps the biggest surprise was the announcement that Mark Hogan, a one-time rising star in the General Motors firmament will join the Toyota board. Hogan left GM after a squabble with the United Auto Workers Union that threatened to cause headaches for GM. He has since been involved in various aspects of the auto industry, including a run as CEO of the huge, Canadian-based automotive supplier, Magna International. He is currently serving as president of Dewey Investments LLC.
Then there is Mark Templin, who has been running the Lexus division in the U.S. The luxury maker was largely an American operation for its first two decades, reflecting both the size of the market and the fact that U.S. buyers have typically been more open to new luxury brands. Lexus is pushing to globalize, and is particularly interested in the Chinese market. But China's luxury segment largely echoes the demands of the States, which seems to play well for Templin who now will oversee the brand globally.
Also on the promotions list is Steve St. Angelo, the executive appointed to help Toyota resolve the safety crisis triggered by a pair of massive recalls related to so-called unintended acceleration . He has been managing safety and quality-related issues but will now run overall Toyota operations in Latin America and the Caribbean and will be based in Sao Paulo, the heart of the booming Brazilian market.
A wide array of executives, including Toyota’s U.S, automotive operations chief Bob Carter, will now gain additional responsibilities or shift roles.
The management shake-up comes at a time when Toyota is positioning itself for major growth after regaining its global sales crown in 2012.
But the company also faces a number of challenges. Demand in China slumped following a dispute between that country and Japan over a chain of uninhabited islands in the East China Sea. Recalls remain a serious headache, Toyota calling back more vehicles in the U.S. market than any other maker in 2012 – the third time it has led the list in four years – and Germany’s aggressive Volkswagen AG is meanwhile hoping to take the global sales – and earnings – lead before decade’s end.
The new management team, along with Toyota family heir Akio Toyoda, won’t have a chance to relax in their new roles.
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