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Toyota "grasping for salvation" says CEO

Posted by Hootan Mahallati | October 04, 2009 | In news toyota

Akio Toyoda, Toyota CEO and the founder's grandson, has gone public with a harsh assessment of Toyota's health. As it continues to lower its sales forecasts and lose money, Toyoda said that Toyota is "grasping for salvation" and that the company is on the edge of "capitulation to irrelevance or death."

Toyota, who once targeted 10M vehicle sales, expects to sell only 7.3M vehicles this year, leaving a whopping 30% of its production capacity unused. Beside this decline in sales, Toyoda also lists the Dollar-Yen exchange rate as a source of trouble, saying"When you get to this level, it makes it difficult to return to profit on sales growth alone."

The newly-appointed CEO, who has been at the job since June, referenced business guru Jim Collins' book How the Mighty Fall and its five stages of decline, warning that Toyota has passed through hubris born of success, undisciplined pursuit of more and denial of risk and peril to arrive at stage four, grasping for salvation. Stage five, in case you are wondering, is the capitulation to irrelevance or death mentioned by Toyoda. He went further, saying “Toyota has become too big and distant from its customers.”

In addition to making these remarkably candid and dire statements, Toyoda apologized for the four deaths attributed to the faulty floor mat issue (causing pinned-down accelerator pedals) that recently triggered a recall of 3.8M Toyotas and Lexus, the largest recall in the company's history.

“We would like to pay our deepest condolences for the loss of four precious lives,” Toyoda said. “Customers who chose Toyota and Lexus cars because those brands are safe and secure are now beset with anxiety. I regret and apologize for this development.”
Toyota, whose sales were temporarily helped in the US by the Cash for Clunkers program, suffered a 13% decline in year-to-year sales this September.

[Source: Automotive News]

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