Shuffle aims for a meaner, leaner Toyota

TOKYO — Toyota Motor Corp. may be one of the world’s leanest carmakers. But in a new era of record volume and disruptive technologies, President Akio Toyoda has appointed the company’s first chief competitive officer, to sharpen its edge even more.

The man picked for the job, Executive Vice President Didier Leroy, knows a thing or two about how to compete.

When the Frenchman was tapped as president of Toyota’s European operations in June 2010, the Japanese company was coming off two straight years of regional operating losses in Europe.

In his first year at the helm, he brought Toyota Europe back into the black. Its profits have been growing ever since.

Now, under a sweeping management shuffle last week, Toyoda wants Leroy to work his magic across the company. In the newly created role, Leroy’s mission is to survey global operations with a critical eye for new ways to make better cars.

In some ways, Leroy, 58, was a natural, insiders say.

As a non-Japanese near the top of one of the most Japanese of Japanese companies, he is positioned to inject fresh thinking and a broader international perspective into the boardroom.

More importantly, Leroy is known for speaking truth to power, even when the truth hurts, people who know him say. That unvarnished objectivity helped win Toyoda’s ear.

Leroy’s European turnaround showed he could back up his words with actions. The manufacturing guru was a deputy plant director at Renault SA before joining Toyota in 1998. He engineered the European comeback by eking new efficiencies from Toyota’s already ultraefficient production process, no easy task.

Toyota’s appointment of a competitive officer mirrors similar actions at other automakers, notably rival Nissan Motor Co., which has five “chief” officers under CEO Carlos Ghosn, including Hiroto Saikawa to oversee its competitive edge. Last week, Toyota also appointed the company’s first chief financial officer, Takahiko Ijichi.

In addition to his new role, Leroy will keep his current post overseeing Toyota’s operations in mature markets such as North America, Europe and Japan, a job he took last year.

As part of the restructuring, Toyoda created new business units around three product segments: compact cars, midsized vehicles and commercial vehicles. Each segment will be organized as an internal “company” with its own president.

The current structure is partly centered around job function, and Toyoda felt it created tunnel vision for a group’s specific task.

“He was frustrated that they sometimes think of their own function first and not about the car as a whole,” said one person familiar with Toyoda’s thinking.

The overhaul, which takes effect in April, aims to create better cross-company communication, faster decision-making and improved collaboration, Toyota said.

“Each in-house company’s president will have full decision-making responsibilities for its products,” spokesman Ryo Sakai said. “This will help us to break down the walls between functions, reduce the time needlessly spent on coordination, and strengthen our ability to focus on building ever-better cars.”

The management shake-up comes as Toyota enters uncharted territory with global sales eclipsing 10 million vehicles. The company is shifting into expansion mode with a new manufacturing framework and a new line of global platforms that will deliver sportier, yet green, vehicles.

At the same time, Toyota is looking for ways to stay at the head of the pack amid disruptive technologies such as autonomous driving, which could potentially open the door to new rivals from outside the industry such as Google or Apple.

To plot long-term strategy, Toyota created a Frontier Research Center, headed by Executive Vice President Mitsuhisa Kato, to envision the company 20-plus years out.

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