Four years ago Akio Toyoda was elevated to the presidency and position of CEO of the company that bears his family name. Not long thereafter the world’s biggest car maker would face one of the most trying times in its history. The company already acknowledged that the desirability of its products was at an all-time low and then the massive U.S.-led quality crisis struck. This aligned with Japan’s weakest economy in decades, a surging home currency and a spate of natural disasters that plagued their home region.
Understandably, this led to some introspection and a plan to attach perceived shortcomings to no fewer than six fronts of the business. Akio Toyoda realised that his company was lagging behind in: desirability, cost competitiveness, manpower and skills; and Toyota desperately needed to develop a plan to move from a platform strategy to a more flexible modular architecture system of manufacture.
The solution has come through redesigning the normally rigid Toyota ‘control interfaces’ and adopting a new system, known by the Japanese manufacturer as Toyota New Global Architecture (TNGA), which will be widely recognisable from 2015 onwards. In addition to that, Toyota CEO Akio Toyoda also took a pay cut. Well, not exactly, because he didn’t have the inflamed pay cheque to begin with.
In 2012, Akio Toyoda earned $ 1.9 million in direct compensation and by industry standards that places Toyoda at a mere fraction of what fellow CEOs earn. Quoting Bloomberg, Toyoda’s $ 1.9 million is less than a tenth of the $ 21 million Ford CEO Alan Mulally earned in 2012. Despite the challenges, Toyota is on the rise in 2013 to the tune of 28% globally and it’s recently overtaken General Motors as the most prolific car maker in the world.
Salaries of the five largest automakers’ CEOs (2012 compensation)
Alan Mulally – Ford Motor Company – $ 21 million
Martin Winterkorn – Volkswagen – $ 19 million
Dieter Zetsche – Daimler – $ 14.5 million
Dan Akerson – General Motors – $ 11 million
Akio Toyoda – Toyota – $ 1.9 million
(Data from Bloomberg)
