At a news conference in Tokyo, Toyota’s new President Akio Toyoda, said that Japan’s largest automaker has now slipped into the fourth (out of five) stages of corporate decline. Citing author Jim Collins’ How the Mighty Fall, Toyoda regretfully announced that Toyota had entered the stage called “grasping for salvation.” The previous three stages are titled 1) hubris born of success, 2) undisciplined pursuit of more and 3) denial of risk and peril.
The fifth stage is a frightful once, which Collins refers to as “capitulation to irrelevance or death.”
The news comes as Toyota’s sales continue to slump in the U.S., worldwide sales are expected to hit just 7.3 million for the year (down from 8.97 million in 2008) and just days after the automaker announced the largest recall in its history. Earlier this week Toyota announced the recall of 3.8 million vehicles due to a floor mats which could come loose, causing the accelerator to stick. While still under investigation, the problem is suspected of causing an accident that killed four people.
“Customers who chose Toyota and Lexus cars because those brands are safe and secure are now beset with anxiety,” said Toyoda, the grandson of the company’s founder. “I regret and apologize for this development.”
Speaking about the broader company, Toyoda said that the automaker has, “become too big and distant from its customers.” In recent months Toyoda has made clear he wants the company to return to its roots of building affordable quality cars using a process of slow improvements.
Toyoda, known to be an automotive enthusiast, has also proclaimed that the company needs to make halo cars that people want to buy. These include a potential new entry-level sports car as well as the flagship Lexus LF-A – which Toyoda himself has raced in the grueling Nürburgring 24 hour race.
Toyoda also cited the poor exchange rate fro the Yen to the U.S. dollar for hindering the company’s return to profitability.
[Source: Automotive News]