Toyota Motor Corp., the world’s largest automaker, plans to cut its board to at least 17 members from the current 27 to improve decision-making after a series of product recalls in its biggest management reorganization in 8 years, two people familiar with the company’s plan said.
Toyota currently has 27 directors, including the chairman, president, six executive vice presidents and 15 senior managing directors. The reduction in the number of board members will include cutting the number of executive vice presidents, the people said. The changes are likely to take place as early as April, before the shareholders’ meeting in June, they said.
The move, to be announced by President Akio Toyoda, will be the first since Toyota more than halved the number of board members to 27 from 58 eight years ago to help it speed up decision-making, the people said. Even as a U.S. economic recovery and rising demand in emerging markets boost demand for Toyota vehicles, the company said it expects to earn less than a third of the record 1.7 trillion yen ($20.4 billion) it made in the year ended March 2008.
Men exit Toyota Motor Corp.’s Tokyo headquarters. (Bloomberg)
Toyota will announce its “2020 vision” in April, including a medium-term business-reform plan, Toyoda said last month.
“Nothing has been decided yet on our management personnel changes, including that of directors,” Keisuke Kirimoto, a Toyota spokesman said in a phone interview. (Bloomberg)
Toyota’s plan to cut board members was earlier reported by the Tokyo Shimbun.
The carmaker has continued to issue recalls for various defects as it seeks to regain customer trust. The company said Jan. 26 it would repair 1.7 million vehicles globally because of faults in fuel pipes and pumps, pressure sensors and spare-tire carriers. The announcement came after Toyota recalled more than 8 million vehicles for problems linked to unintended acceleration.
NASA, the U.S. space agency, and the National Highway Traffic Safety Administration said on Feb. 8 their probe found no evidence of electronic malfunctions and the only known causes of unintended acceleration were pedals that stuck and floor mats that jammed the pedals. (Bloomberg)