Family star may head Toyota in crisis

updated 10:25 a.m. ET Dec. 24, 2008

TOKYO - As Toyota Motor Corp. faces its biggest crisis in its history, speculation is growing it may turn to the charismatic magic of Akio Toyoda, groomed for years to lead the company his grandfather founded.

The maker of the Prius hybrid and Lexus luxury cars is sinking into its first operating loss in seven decades — a stunning reversal of fortunes for the icon of Japan Inc.

And a flurry of speculation is flying that President Katsuaki Watanabe may step down in the next few months and Toyoda, an executive vice president, be tapped to lead — earlier than expected. Unlike their Western counterparts, Japanese executives are widely expected to resign to take responsibility for dismal results.

The nationally circulated Asahi newspaper reported Tuesday, without citing sources, that Toyoda will replace Watanabe as soon as April. Toyota denied any decision has been made.

In a sign of public pressures, Watanabe, 66, was peppered with questions about his possible resignation at a news conference Monday, after he forecast an operating loss of 150 billion yen ($1.66 billion) for the fiscal year through March.

Watanabe brushed them off, saying the timing wasn't right and his priority was to steer Japan's biggest automaker through hard times.

Honda Motor Co. President Takeo Fukui was asked similar questions after No. 2 automaker lowered earnings forecasts, and denied any resignation plans.

It's no secret that Toyoda, 52, is a best-bet candidate for future president — a position in Japanese companies that wields great decision-making power and is the equivalent of chief executive in the U.S.

The friendly and unpretentious Toyoda, who has appeared before reporters in a racing outfit — unusual among staid suit-clad Japanese executives — has come to symbolize the rejuvenation of Toyota's management.

Called Toyota's "prince" by the Japanese media, he has been among the youngest executives to join the board in 2000. He became one of the company's eight executive vice presidents in 2005 — a number that has since been reduced to five.

Toyoda also has a career fitting of someone destined for the top job, spanning Toyota's global empire, including its China operations, Japan sales and Internet businesses. Earlier, he served as vice president at New United Motor Manufacturing Inc., a Fremont, California-based joint venture between Toyota and General Motors Corp., giving him key experience in the U.S.

The founder's family name is spelled with a "d," but the company name was changed to read Toyota as that was considered luckier under Japanese superstition, according to Toyota.

As a rising star with an impeccable pedigree, Toyoda has the potential to hold the rank and file together and to deliver a pride in historical legacy that few others can.

Company employees say the Toyoda family name holds special meaning, although the Toyodas own only a tiny portion of the stocks. Akio's father Shoichiro Toyoda, a former president, still wields considerable influence in the company.

That kind of morale boost may be exactly what Toyota needs as it faces what Watanabe called "an unprecedented crisis requiring urgent action."

MORE FROM AUTOS

Autos Section Front

China's influence on automakers is growing GM in talks to sell Saab brand, old technology The best and worst used cars you can buy Review: Audi R8, precision meets flair Motor Trend names Ram truck of the year GM, Chrysler used bailout funds for daily costs GM continues shake up of top management Auto industry turns to Europe for direction Volkswagen to buy 20 percent of Suzuki Congress tries to broker auto dealerships deal Autos Section Front   Add Autos headlines to your news reader: