Toyota's Next Chairman
Ponders Keys To Success
LEXINGTON, Ky. &mdash When Fujio Cho came
to Kentucky in 1987 to help open Toyota's plant in Georgetown,
his company was making cars in 12 countries.
But producing Toyotas more than 6,500 miles away from headquarters
in Japan was a daunting task for Cho, then 50 years old. "I
was a bit worried about whether or not we would be able to create
the plant here. … I was nervous," Cho said last weekend
at Rupp Arena during the celebration of the 20th anniversary
of the plant's groundbreaking. With the exception of a huge
plant in Thailand, Toyota's factories outside Japan were small
operations, such as one it opened in Brazil in 1959, or partnerships
with other automakers, such as the California plant it opened
with General Motors in 1984.
Cho, who is to become chairman of the global automotive
giant next month, said he was right to be nervous. Starting
up the plant was difficult, and he had to learn a lot about
dealing with different cultures. The key lessons he learned
as Georgetown plant manager were to examine problems firsthand
instead of relying on reports from subordinates, to constantly
improve processes that were already working and to listen to
individual employees. "I was working as hard as possible
back then … but everything I learned and everything I absorbed
became very valuable for running this company," Cho said.
Malcolm Salter, a professor of business administration and an
associate dean at Harvard University who has written about the
auto industry, said Toyota had a lot to learn about global manufacturing
in the 1980s.
Salter said Toyota had great manufacturing technology
but little experience with U.S.-style labor management. And
the idea of listening to people in local markets as part of
developing designs was completely foreign. "They got a
lot of experience opening plants" and working in foreign
markets, Salter said. After operating in the United States for
a few years, "they had both the soft (social) technology
and the hard technology to work on a global scale." After
Cho returned to Japan in 1994, he was eventually promoted to
president of Toyota, leading it as it opened plants in France,
Argentina, China and Turkey in addition to expansions in the
United States, Canada and Mexico. He became vice chairman last
year and will succeed Hiroshi Okuda as chairman when Okuda retires
next month.
Part of that expansion reflects the growth of
international markets while Japan's automotive market has declined,
and part of it reflects Toyota's desire to minimize shipping
costs by producing vehicles closer to where they are sold, Cho
said.
In following that strategy, Toyota plans to open a plant in
San Antonio this year and one in St. Petersburg, Russia, next
year. Cho said Toyota will consider another U.S. plant as soon
as sales justify it. As of last year, about 9 percent of Toyota's
autoworkers were in the United States. About 46 percent of its
autoworkers are outside Japan.
