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Toyota trims top execs to aid in quicker decision making

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Toyota trims top execs to aid in quicker decision making

Toyota Motor Corp. has reduced its number of top positions to execute a slimmer executive structure so that it can better compete in an industry undergoing rapid change. The Japanese automaker is also aiming for speeding up decision making by reducing the number of top positions.

The automaker hopes that quicker decision making will help the company regain the lead in an industry increasingly that is focused on new technologies, including automated driving and low-emission power units.

The Japanese automaker announced personnel changes for the financial year starting in April. The company said in a statement on Wednesday that it will reduce its board of director positions from 11 to nine.

Only President Akio Toyoda and Chairman Takeshi Uchiyamada will remain representative directors under this new structure – the automaker cut the number of such posts from six.

Toyota reduced the number of representative directors to centralize the responsibility and accountability for the entire company. With fewer board directors, they could speed up executive decisions, Toyota spokeswoman Kayo Doi told Reuters.

The executive changes come just a year after the automaker overhauled its corporate structure to one emphasizing product-based management.

“This structural change is not an answer but an opportunity,” Toyoda said in the statement.

Toyoda also said that the change was necessary to “allow us to remain viable in an era in which we are producing and selling 10 million vehicles a year.”

The automaker’s scale affords benefits such as lower production costs, but it also raises quality-control risks, as the company experienced in the early 2000s when the driver-side floor mats led to some unintentional acceleration in some of their vehicles.

Toyoda, who has led the company since 2009, previously noted that the automaker’s size can slow down their decision-making.

Among the position changes, Osamu Nagata, previously Toyota’s chief administrative officer in North America will be promoted to CFO and executive vice president and will be joining the board of directors.

Another employee included in the position changes is Mitsuru Kawai. Kawai will become executive vice president in charge of factories. He joined Toyota in the 1960s as a plant worker, rising to the automaker’s highest position held by a blue-collar worker.

Board directors Mitsuhisa Kato, Takahiko Ijichi and Nobuyori Kodaira will step down from their positions and become company advisors. Senior managing officers Hirofumi Muta, Koei Saga and Soichiro Okudaira will also step down from their position.

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