A grand plan: Handing the reins of Toyota Motor to Akio Toyoda's son

Updated : 01.03.2017

In an unprecedented move, the Japan Business Federation (Keidanren) has picked Toyota Motor Corporation Senior Managing Officer Shigeru Hayakawa to replace one of its vice chairs, Takeshi Uchiyamada, who also concurrently serves as Toyota's chairman of the board, when the latter's tenure expires in June 2017.

Hayakawa would be only the third person to become a Keidanren vice chair without having assumed the presidency of a member company, and the first ever that Toyota has sent to the influential business lobby without having helmed the carmaker.

When this news broke on February 6, Toyota announced Hayakawa would become an executive vice president as of April 1.

"President Akio Toyoda is the most suitable person to become a Keidanren vice chair," said a business reporter for a major newspaper, who is covering Japan's business organizations. "The appointment of his subordinate to the Keidanren post indicates Toyoda is making light of Keidanren."

Toyoda explained he opted not to take the post because it was difficult to double as president of the carmaker and a Keidanren vice chair at a time when Toyota faces a sea change in the global business environment, which requires the automaker to go through a revolutionary change.

But virtually nobody took his statement at face value. "If he was so busy, he could not have assumed the [Toyota] team leader role for the FIA World Rally Championship, to which Toyota returned this year" after a hiatus, said a business organization insider.

Shoichiro Toyoda's bitter experience

According to well-informed sources, Toyoda's decision reflects the Toyoda family's desire to prolong its reign over the automaker.

Toyoda assumed his current post in 2009. One Toyota insider opined that Toyoda would hold the presidency for 10 years-like his father, Shoichiro-and then take up the chairmanship. When he becomes Keidanren chairman, the reins of corporate management will be handed from the Toyoda family to Toyota again, according to a scenario envisioned by some executives of the carmaker.

"Because of this scenario, in which Toyoda withdraws from the front line of management in his early 60s, he has been allowed to engage in car races and assume the chairmanship of the Nagoya Grampus Eight pro soccer team--activities outside the company that are normally not allowed for the president of a major corporation," an industry newspaper reporter said.

But with Hayakawa set to assume the Keidanren post, Toyoda likely will remain at the Toyota helm for an extended period. Speculation is rife that Toyoda aims to stay on for 25 years until 2034--when he will be 78.

According to another Toyota source, Toyoda's long reign is being pushed by Shoichiro, the Toyota honorary chairman who distrusts non-Toyoda family executives at the carmaker and dreads the family being ousted from the firm.

Shoichiro's fear stems from years of Toyota's management by nonfamily members. In 1995, Hiroshi Okuda, who became a symbol of the anti-Toyota family camp, became president. Okuda, who would later be lauded as an economic adviser to the enormously popular administration of Prime Minister Junichiro Koizumi, quickly strengthened his influence inside the company.

Alarmed by this, Shoichiro replaced Okuda with Fujio Cho, who is loyal to the founding family, in 1999 and worked to deflect media attention from nonfamily Toyota executives.

If Toyoda keeps a grip on Toyota's management until 2034, his eldest son, Daisuke, will be in his 40s, old enough to join the board of directors. According to a Toyota insider, Toyoda-unlike his father-lacks the prowess to win the hearts and minds of people at Toyota and the capacity to eliminate rivals who would block his son's elevation to power. As a result, Toyoda's preferred option seems to be staying in the post until his son is old enough to assume the presidency in 2037, when Toyota observes the 100th year since its founding.

If that happens, Toyoda will be 81--more than 10 years younger than the current age of his father, who is 92 and as fit as a fiddle.

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This is a translation of an article from the February 2017 issue of Sentaku. The original article can be found here.