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Toyota Names First Foreigner to Board

April 12, 2007 7:08 a.m.

TOKYO -- Toyota Motor Corp. named James E. Press as its first non-Japanese member of the board, in an effort to internationalize its top management to reflect the car maker's growing dependency on the U.S market.
Toyota said Mr. Press, 60, will become a senior managing director, subject to approval at a shareholders' meeting in June. Mr. Press was named president of Toyota's North American operations in June 2005, replacing a Japanese executive sued for sexual harassment.
The appointment comes at a time when Toyota is enjoying rising sales in the U.S. at the cost of its Detroit rivals. Analysts estimate that 34% of Toyota's overall sales volume and 43% of its operating profit comes from North America. Toyota now exports nearly half the vehicles it sells from Japan, up from 38% in 2005. Meanwhile, Japan's domestic car market, which is just one-third the size of the U.S., remains flat.
Toyota has 13 plants in the U.S. and Americans hold top positions in divisions like plant management and product development. Globally, four foreigners hold managing officer positions, the position just under board member. Toyota even opened a "Toyota Institute" outside Toyota City, Japan, in 2001 to train foreign employees in the "Toyota Way," a corporate value system designed to eliminate waste, promote team work and focus on quality.
Mr. Press, who joined Toyota in 1970 after working for two years at Ford Motor Co., has some tough challenges ahead. The car maker, which launched a new version of its Tundra pickup truck only last month, is already offering incentives to stir sales. Then there's the problem of a potential backlash by U.S. consumers as Toyota's U.S. market share continues to rise, hitting 16% last March. Japan's No. 1 car maker's success comes as General Motors Corp. and Ford post massive losses and DaimlerChrysler puts its money-losing Chrysler unit up for sale.
Analysts say the appointment of Mr. Press could be a way to proactively curb any anti-Japanese sentiment. It also sends a signal to other American employees at Toyota that the company, long believed to have a staid board averse to foreign members, will appoint non-Japanese executives to top positions.
"There's finally some recognition that they are not just a Japanese company anymore," said Christopher Richter, a Tokyo-based analyst at CLSA Asia-Pacific Markets.
Yoshimi Inaba, Toyota's executive vice president responsible for the car maker's China operations, will retire from the board in June. Additional restructuring will be announced in June, when the board of directors will add five positions, bringing it to 30 from 25 members.
A Toyota spokesman said that adding Mr. Press to the board will give the company better insight into the American market at the top management level.
Write to Amy Chozick at [email protected]1
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