Unite in Strength: Speech by President Akio Toyota at FY2020 Financial Results Review
Toyota Motor Corporation Embraces Sustainable Development and Financial Recovery
On May 12, 2020, Toyota Motor Corporation held a press conference to discuss its full-year financial results for the fiscal year ending March 31, 2020. Akio Toyoda, the Chairman and President of the company, led the briefing.
In his remarks, Mr. Toyoda expressed a desire to engage in the sustainable development goals (SDGs) with a "no one will be left behind" stance. He also mentioned the need to create a relationship in which people can say thank you to each other and to the Earth.
The past few years have been challenging for Toyota, with numerous crises such as the global financial crisis, the massive recall crisis, the Great East Japan Earthquake, flooding in Thailand, and the so-called "Six Hardships" in Japan, including an ultrahigh yen. However, Mr. Toyoda stated that Toyota came to feverishly engage in both "a fight to bring back what makes us Toyota" and "completely redesigning Toyota for the future."
During this period, Toyota took various measures to fundamentally revise its executive and organizational structure. This included the introduction of an in-house company system, establishment of its "Seven Samurai" structure, and discontinuance of the post of executive vice president. By drastically reducing R&D expenses and capital expenditures, Toyota was able to shrink its fixed costs during the four years after Mr. Toyoda became president.
In the first three of those years, although Toyota aimed to strengthen its true competitiveness during what it called an "intentional pause," Mr. Toyoda admitted that he was not able to obtain sufficient results. However, over the most recent seven years, Toyota's fixed costs increased due to investment for accelerating the making of ever-better cars and due to investments in response to CASE (Connected, Autonomous, Shared, and Electrified). Mr. Toyota stated that Toyota strengthened its composition while absorbing the costs of these investments through such means as cost reduction during the most recent seven years.
As a result of these efforts, Toyota was able to bring the number of vehicles sold back up to the levels before the global financial crisis. In the year immediately after the start of the global financial crisis, vehicle sales decreased by 1.35 million units, resulting in Toyota falling 461 billion yen into the red. However, over the four years after Mr. Toyoda became president, Toyota achieved an operating income of 1.3208 trillion yen, despite the ultrahigh yen of an exchange rate of 83 yen to the dollar.
In addition to focusing on its financial recovery, Toyota is also making efforts to contribute to society. The company is producing medical face shields using 3D printers and extending efforts to other parts of the world, including Japan and Europe. Toyota is also providing support by applying TPS (Toyota Production System) to improve productivity for items that cannot be produced on their own, such as ventilators.
Toyota is also committed to the happiness of its employees. Mr. Toyoda stated that in this period of profound transformation, earnestly hoping for the happiness of its employees, Toyota decided to further address hitherto common practices, such as raising base wages and implementing uniform wage increases. The company and labor union are holding thorough discussions as part of striving to fundamentally reform how they work.
Mr. Toyoda also mentioned that labor and management at Toyota share a common foundation of "the company hopes for the happiness of its employees, and the labor union hopes for the growth of the company." He emphasized the importance of retaining domestic production during crises and noted that Toyota is continuing to protect places in Japan where human resources can work and be cultivated.
The press conference was conducted online from the Nagoya office due to social distancing measures. In the first session of the briefing, Mr. Kon explained the financial results of the past fiscal year. Mr. Toyoda delivered his remarks in the second session. He reiterated Toyota's mission to provide goods and services that make people happy worldwide.
In conclusion, Toyota Motor Corporation is making significant strides in both financial recovery and societal contribution. Under the leadership of Akio Toyoda, the company is committed to becoming stronger together with its partners worldwide, while also focusing on the happiness of its employees and the well-being of the Earth.
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