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The shakeup by Toyota Motor Corp. president Akio Toyoda signals the company is set to put years of crisis behind it.

YURIKO K. NAKAO/Reuters

Akio Toyoda has shaken up management at Toyota Motor Corp. and opened the Japanese auto maker's board to outsiders for the first time in a major overhaul that signals the company has put years of crisis behind it.

The shakeup includes the retirement of some senior executive vice-presidents, a generational change in the chairman's office and the appointment of several non-Japanese executives to senior management posts for the first time.

The changes also include knitting together the company's disparate Canadian operations by appointing Ray Tanguay, chairman of Toyota's manufacturing arm in Canada, to the additional post of chairman of Toyota Canada Inc., the Canadian sales arm.

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The shakeup comes after Mr. Toyoda, president of the company, spent three of his first four years in the job dealing with the recession that battered profits, a recall crisis that damaged Toyota's once-unassailable reputation for quality, and the March, 2011, earthquake that led to lengthy shutdowns of its operations in Japan and elsewhere.

"Since I became president, our company has faced many difficulties, including our fall into the red following the global financial crisis, quality issues and the great East Japan earthquake," Mr. Toyoda said during a news conference in Tokyo on Wednesday that was also webcast.

"We also learned that increased sales do not equal real growth."

The key change is the creation of two divisions within the company, called Toyota One and Toyota Two, which will be responsible for mature markets and emerging markets, respectively.

Each division will be headed by a non-Japanese executive and will be responsible for developing new vehicles that are appropriate to their markets, instead of that responsibility residing at Toyota headquarters in Japan.

The company's luxury Lexus brand will also become a separate division, as will the company's engine and transmission operations, which are developing new technologies such as battery-powered and fuel-cell-powered vehicles.

"For us to really lead the way in future mobility, we need to be faster," Mr. Tanguay said in an interview. He will no longer be a senior manager officer, one step below executive vice-president, but will remain an adviser to Mr. Toyoda as well as taking on the job as chairman of the Canadian sales arm. Toyota Canada Inc. does not have a chairman at the moment.

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A key change that will permit greater collaboration between the sales and manufacturing arms in Canada was made on Jan. 1, when Toyota Motor increased its stake in the Canadian sales arm to 51 per cent, by purchasing 1 per cent of the company from Mitsui & Co.

"My role is I'm the Toyota ambassador here in Canada," Mr. Tanguay said. "When I go to Japan, I represent Canada to Toyota. I still have the ability to connect with the executives in Japan to deliver a message that is important for Canada. Nobody can speak better for Canada than Canadians."

He pointed to the differences in the Canadian and U.S. markets, including the compact Matrix hatchback, which is made at the company's plant in Cambridge, Ont., and is still a strong seller in Canada, but is no longer offered for sale in the United States.

Among the three non-Toyota directors who are expected to be appointed to the board in June is Mark Hogan, former president of Canadian auto parts giant Magna International Inc., and a former senior executive with General Motors Corp. He worked with Mr. Toyoda at the now-closed GM-Toyota assembly plant in Fremont, Calif.

Toyota needs to import outside opinion as it grows globally, Mr. Toyoda said.

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

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