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    New Blog Address: management.curiouscatblog.net

    Monday, November 28, 2005

    Toyota Manufacturing Powerhouse

    Great required reading via Evolving Excellence, Relentless, Detroit News:

    As Toyota expands rapidly, it is also grappling with a shortage of skilled managers and engineers. When it decided in June to build its seventh North American assembly plant in Woodstock, Ontario, officials said one reason they chose that site was because the new factory could be overseen by the team running its nearby Cambridge plant.

    Last month, the normally acquisition-shy Toyota bought nearly half of GM's 20 percent stake in Fuji Heavy Industries Ltd., in part to bolster its ranks of researchers and engineers.

    Now, some Toyota executives in fast-growing regions are coaxing former managers out of retirement. Less than a year after Ed Ohlin retired, the 21-year company veteran and former head of its Mexican sales operations is back on the payroll, helping his former boss Yoshimi Inaba build a sales network in China.

    "He was looking for someone who understood the Toyota culture and had brought it to another country. I'd done that," said Ohlin, who now works in Beijing


    Unusual among automakers, "they don't hide a lot," Coventry said. "It's like going to the Super Bowl and having the opposite side throw their playbook on the table. It's as if they feel they can still beat you on the field."

    I like this. Toyota has greatly advanced management practice worldwide through their actions.

    In a reflection of Toyota's team-oriented approach, its executive pay is paltry by U.S. standards. Analyst Ron Tadross at Banc of America Securities estimates the total annual compensation of Toyota's CEO at under $1 million - about as much as a vice president at GM or Ford Motor Co. makes in a good year.


    The executive pay crisis in America is a symptom of the failure of American management to understand their role. Executives are part of the system and have acted shamefully in allowing obscene pay for a few while claiming they must force others to suffer (due to "the market"). It seems more people are willing to point out the ludicrous excesses recently. Hopefully that will start to result in actual action to move back toward a more equitable distribution of the income of American companies.

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