Founder's grandson may take over struggling Toyota

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(Agencies)
Updated: 2008-12-25 15:49

TOKYO -- As Toyota Motor Corp. faces its biggest crisis, speculation is growing that the charismatic grandson of the company's founder may take over leadership of the automaker sooner than expected.

Toyota Motor Corp executive vice president Akio Toyoda speaks during an unveiling of its new seven-seater compact vehicle "Passo Sette" in Tokyo December 25, 2008. The world's top carmaker, Toyota Motor Co, is to promote Akio Toyoda, a founding family scion, to president in April in a bid to improve the firm's performance, the Japanese daily Asahi said on Tuesday. [Agencies]

Japan's nationally circulated Asahi newspaper reported Tuesday that Akio Toyoda -- long groomed for the top job -- will replace current president Katsuaki Watanabe as soon as April. The newspaper did not cite sources and Toyota denied any decision has been made.

The report surfaced as Japan's No. 1 automaker, which produces the Prius hybrid and Lexus luxury cars, was sinking into its first operating loss in seven decades -- a stunning reversal of fortunes for the icon of Japan Inc. And in the latest bad news, Toyota reported Wednesday that global vehicles sales plunged 21.8 percent in November -- its biggest drop in eight years.

In a sign of public pressures, Watanabe, 66, was peppered with questions about his possible resignation at a news conference earlier this week, after he forecast an operating loss of 150 billion yen ($1.66 billion) for the fiscal year through March.

Watanabe, president since 2005, brushed them off, saying the timing wasn't right and his priority was to steer Japan's biggest automaker through hard times. Unlike their Western counterparts, Japanese executives are widely expected to resign to take responsibility for dismal results.

Watanabe's possible successor, Toyoda, is an executive vice president and grandson of Kiichiro Toyoda, who founded the automaker.

It's no secret that Toyoda, 52, is a best-bet candidate for future president -- a position in Japanese companies that wields great decision-making power and is the equivalent of chief executive in the US.

The friendly and unpretentious Toyoda, who has appeared before reporters in a racing outfit -- unusual among staid suit-clad Japanese executives -- has come to symbolize the rejuvenation of Toyota's management.

Called Toyota's "prince" by the Japanese media, he has been among the youngest executives to join the board in 2000. He became one of the company's eight executive vice presidents in 2005 -- a number that has since been reduced to five.

Toyoda's resume reads like that of a president. His jobs span Toyota's global empire, including its China operations, Japan sales and the Internet business. Earlier, he served as vice president at New United Motor Manufacturing Inc., a Fremont, California-based joint venture between Toyota and General Motors Corp., giving him key experience in the US.

The founder's family name is spelled with a "d," but the company name was changed to read Toyota as that was considered luckier according to Japanese superstition, Toyota says.

Company employees say the Toyoda family name holds special meaning, although the Toyodas own only a tiny portion of the stocks. Akio's father Shoichiro Toyoda, a former president, still wields considerable influence in the company.

That kind of morale boost may be exactly what Toyota needs as it faces what Watanabe called "an unprecedented crisis requiring urgent action."

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