Shoichiro Toyoda, the second-generation head of Japanese auto giant Toyota, who oversaw a major U.S. expansion with manufacturing plants and ambitious goals in the 1980s when Detroit’s automakers grappled with the harsh realities of global competition, died on February 14 in age of 97 years.
Toyota confirmed the death but gave no further details.
Paul A. Eisenstein, editor of the Detroit Bureau automotive news site, said Mr. Toyoda took over Toyota when it was a struggling Japanese brand in the 1950s and, within three decades, introduced assembly line techniques and quality control standards that became the industry pacesetter.
Mr. Toyoda affirmed an attention to detail that is ingrained in Toyota’s corporate culture. A Harvard Business Review study found that Mr. Toyoda’s rules included turning off corporate lights at lunchtime to save money and designing offices with every inch considered for maximum utility and cost advantage.
As Toyota plants expanded outside of Japan, Mr. Toyoda consistently enforced the company’s “just-in-time” inventory philosophy, which enabled factories to quickly switch production models to respond to changing consumer demands.
But he could also make bold and unexpected moves. In 1990, he turned the middle management structure on its head, removing employees and subordinates so that managers could deal directly with lower-level workers. The move reflected his belief in “genchi genbutsu,” or the importance of seeing things firsthand.
“We felt like we were suffering from a corporate disease…so we started with a cure,” Mr. Toyoda said. “We have a saying, ‘A great man finds it difficult to exercise his mind fully.'”
In 1999, just before he stepped down as chairman, Mr. Toyoda rallied all of the company’s executives to berate them for worrying, US-style, about the next fiscal quarter rather than focusing on longer-term goals.
“It started when Toyota was anything but a joke,” Eisenstein said, “and turned it into a company that needed to be taken incredibly seriously.”
Under Mr. Toyoda’s leadership, Toyota expanded its global presence to rise to the top ranks of global car brands in the late 1980s and become one of the flagships of the economic powerhouse Japan Inc.
Toyota’s US push didn’t come with a big welcome mat, however. Japanese auto imports have been practical scapegoats for the US auto industry’s decline — hit by successive blows, including higher labor costs, a lack of innovation from the Rust Belt factory, and consumers seeking smaller, higher-mileage cars after the gas shortage of the 1970s.
At the same time, Toyota and other Japanese automakers were building a reputation for simply being more reliable and durable than the Detroit Big Three models.
“Japan-bashing” at times took on a literal meaning. Some protests included the smashing up of a Japanese-brand car. At a 1982 event in Indiana, it cost $1 a swing to smack a Toyota to raise money for laid-off auto workers.
Amidst this atmosphere, Mr. Toyoda acted cautiously and cooperatively. Toyota inked a deal with General Motors in 1983 for a joint venture in Fremont, California that produced the Chevrolet Nova and Toyota Corolla.
When Mr. Toyoda came to Georgetown, Kentucky, in 1985 to celebrate the groundbreaking of Toyota’s first independent US plant, he chose to forego the traditional Japanese sake barrel breaking ceremony. Instead, he toasted with local bourbon and noted that Toyota’s quality control system was inspired by an American management theorist, W. Edwards Deming.
Mr. Toyoda also kept his comments free of surprises. When he spoke publicly, it was often general aphorisms, especially when asked about politically sensitive issues such as trade policy and unionism.
“We believe that if it will help solve the problem,” he once said of the Kentucky plant and complaints about Japanese auto imports, “we will indeed be happy.”
Toyota’s Japanese competitors like Nissan and Mazda were years ahead in producing cars on US soil. But Toyota’s growing dominance and aggressive growth strategies under Mr. Toyoda have often placed the company at the center of debates over Japan-US competition.
Mr. Toyoda presided over great victories.
He led the development of the luxury brand Lexus in global markets in 1989, which quickly challenged similar models from Mercedes, BMW and other high-end models. At one point in 1990, the Lexus waiting list in the United States was a year long.
Toyota beat everyone with the first hybrid car, the Prius, released in Japan in 1997 (and abroad in 2000). The hybrid Ford Escape debuted in 2004.
Mr. Toyoda also approved Toyota’s first assembly plant in Europe – in Burnaston, England – and its first in Canada in Cambridge, Ontario.
In 1980, Toyota’s US market share was 6.6 percent. By 2009, it reached 16.7 percent, according to industry data, before falling to about 15 percent last year.
Shoichiro Toyoda was born on February 27, 1925 in Nagoya, a coastal city between Tokyo and Osaka, into a family with prominent business lines.
His mother, the former Hatako Shinshichi, was a daughter of the co-founder of the well-known department store chain Takashimaya. His father, Kiichiro Toyoda, branched out from the family’s successful automated loom company to found Toyota Motor.
The company says Toyota was chosen as the name because it takes eight strokes to make “Toyota” in Japanese, and that’s considered a lucky number, but others suspect it was because Toyoda, meaning “abundant paddy field.” , was deemed inappropriate for a car manufacturer.
Mr. Toyoda was drafted into public service during World War II and the company, like many others, was commissioned to manufacture vehicles for the military. He graduated from Nagoya University with a degree in engineering in 1947 and received his PhD from Tohoku University in 1955. He was sometimes called “Doctor” by Toyota colleagues.
Mr. Toyoda’s first job at Toyota was to inspect cars returned for defects. In 1961 he was appointed Managing Director and in 1981 he took over Toyota sales. A merger of sales and manufacturing units the next year created Toyota Motor Corp., with Mr. Toyoda as president.
He was chairman from 1992 to 1999 and then became honorary chairman.
In 2007, Mr. Toyoda was inducted into the US Automotive Hall of Fame. Mr. Toyoda was commended for “solidifying Toyota’s reputation as one of the most recognized and celebrated automakers in the world.”
Last month, Mr. Toyoda’s son and successor, Akio Toyoda, announced that he was stepping down as Toyota president and becoming chairman. Full details of the survivors were not immediately available.
Speaking to American audiences, Mr. Toyoda was fond of recounting how a road trip across the United States in 1957 helped change his company for the better.
He was given the job of driving Toyota’s four-cylinder sedan, the Toyopet Crown, across the country. Marketed as a budget family model, the Crown was Toyota’s first US export and Mr. Toyoda thought it could do well.
It was a flop. In the era of big American cars and big American engines, he said, consumers thought the crown lacked power and felt at a loss.
A humble Mr. Toyoda took the lesson to the factory floor, encouraging workers to suggest better production methods and ways to fix any design flaws that might arise.
“We owe America a great debt of gratitude for our understanding of the importance of quality,” he said.