March 6, 2013
Toyota names first outsider to board
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TOKYO -- Toyota has tapped a former executive at U.S. rival General Motors to join its board, the first time in the Japanese automaker's 76-year history it is appointing directors from outside the company.

The appointment of Mark Hogan, effective April 1, underlines efforts at Toyota Motor Corp. to become more internationally minded, transparent and nimble in regional markets as it recovers from difficult years, including a massive recall fiasco in the U.S.

Under changes announced Wednesday by President Akio Toyoda, Toyota will set up a new division to oversee North American, European and Japanese markets and another for emerging markets.

The world's biggest automaker also promoted four non-Japanese managers to oversee regional businesses, including James Lentz, an American who already leads Toyota Motor Sales in the U.S. He will head the North American region.

Like other conservative Japanese companies, Toyota has been far more insular than its Western counterparts, and had been closed in the past to the idea of board members from outside company ranks.

 The changes reflect soul-searching at the company following massive global recalls over sticky gas pedals, faulty floor mats, problematic brakes and other defects that spanned several years from 2009 and affected more than 14 million vehicles -- some models being recalled repeatedly.

The recalls tarnished Toyota's reputation for quality and raised questions about its ability to respond to problems that crop up in its rapidly expanding global empire, and to reassure international authorities and customers of its trustworthiness and transparency.

Besides Hogan, two Japanese, from the insurance and securities industries, were picked as outside board members. They are Ikuo Uno, an executive advisor at Nippon Life Insurance Co., and Haruhiko Kato, president of the Japan Securities Depository Center.

Hogan, an independent consultant and former GM group vice president, has been Toyoda's friend since they worked together more than a decade ago at NUMMI, or New United Motor Manufacturing, a California auto plant jointly run by Toyota and GM. Hogan has also previously advised Toyota.

The board appointments require approval from shareholders at a meeting in June.

Toyota has had a foreigner on its board just once in the past, in 2007, with Jim Press, an American who had headed Toyota's North American operations at a time when fears were growing about a possible American backlash over Toyota's stupendous growth. But Press left shortly afterward for a job with Chrysler.

Toyoda acknowledged that he has learned "many lessons'' since becoming Toyota president in 2009, including the risks of rapid growth.

"Rapid growth can also mean rapid descent, creating havoc for many people,'' he said.

Toyoda referred to the quality woes, as well as the other recent crises such as the 2011 earthquake and tsunami in northeastern Japan and flooding in Thailand that followed. Both disasters destroyed key suppliers and hobbled Toyota's production.

But he promised Toyota will be more responsive in each region, while staying competitive and quick, even as it keeps growing as a global manufacturer, now employing 320,000 people.

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