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Leadership Outgoing Toyota Canada chairman: developing prosperity through local jobs

Ray Tanguay

Rachel Idzerda/The Globe and Mail

For someone who loves to build things, Ray Tanguay moved into pretty much a perfect job when he joined the Canadian manufacturing arm of Toyota in 1991. They gave him $3-million to build a fitness centre.

"I had so much fun doing it," Mr. Tanguay says. "I visited universities, sports clubs. I learned a lot about what makes a good fitness centre. The day of the opening, they said: 'Okay, playing time is over now; we're going to make you vice-president of manufacturing.'"

Not long after that, Toyota Motor Manufacturing Canada Inc. (TMMC) began firing on all cylinders, so now he can reflect on a career that took him to the president's office in the Canadian unit, to the senior managing officer level at parent Toyota Motor Corp., which made him the highest ranking non-Japanese executive, and the senior executive picked by Toyota president Akio Toyoda to develop a new global vision for the auto maker after its 2010 recall crisis.

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Mr. Tanguay, 65, who is now chairman of TMMC and its sister sales company Toyota Canada Inc., will retire at the end of March, a few months short of the quarter-century mark.

"I'm not going to make 25," he says, over a lunch of cream of artichoke and spinach soup and a turkey and brie sandwich on a pretzel bun washed down by a diet Coke at Blackshop Restaurant, about 15 minutes from the Toyota factory in Cambridge, Ont.

A career of that length at the highest levels of the auto industry is a singular achievement in Canada, where some presidents over the past two decades barely warmed the chairs in the corner offices before they moved on. Those executives have also – with some exceptions – tended to be Japanese or Americans.

A franco-Ontarian, Mr. Tanguay grew up on a farm near Mattice-Val Côté, at the northern end of Highway 11, about 1,000 kilometres north of Toronto.

"I came from nothing," he says, although "food was never a problem and we always had a good home."

But he wanted to make a better life for himself.

"That was probably my lesson in life: hard work, responsibility, and make things out of nothing. You couldn't afford to go and buy stuff. You had to make it or fix it."

That led him to Windsor, Ont., where he studied engineering at St. Clair College and went to work for electronics makers Electrohome and Philips Canada before being hired at Toyota.

Mr. Tanguay's longevity at Toyota pales, however, beside his own career trajectory and the heights that the Canadian manufacturing unit reached under his leadership.

Production was running at about 70,000 Corolla compact cars a year in 1993 when he became vice-president of manufacturing.

Last year, the company churned out a record 579,000 vehicles at factories in Cambridge and Woodstock, Ont.

That growth began in his early days heading up manufacturing, when headquarters in Japan told him he could make as many Corollas as he wanted, providing he didn't hire any more people or increase capital spending.

"From what was designed to be 50,000 to 60,000 [vehicles annually], we went to 97,000 units and, at the same time, we were winning quality awards. That's what put TMMC on the map," he says.

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His responsibilities grew as the Canadian operation increased in size and importance and took home industry-wide quality awards regularly.

The Cambridge plant underwent its first major expansion in 1997. In 2002, Mr. Tanguay was named president and TMMC was given the nod to produce a vehicle for Toyota's luxury Lexus line – the first plant outside Japan to be accorded what is considered a high honour in the company.

"The biggest recognition for me was when they decided to make me president and give us Lexus at the same time," he says. "You can think of that as being pretty risky from their side because that's the crown jewel of Toyota – Lexus."

Although he considers winning Lexus the highlight of his work in Canada, a more tangible monument can be seen along the north side of Highway 401 about 90 minutes west of Toronto, where the only new assembly plant built in Canada this century makes the hot-selling Toyota RAV4 crossover vehicle.

The plant began production in the depths of the recession in December, 2008, and many in the industry believe the land on which it sits would still be the site of a golf course and a struggling strip mall if not for Mr. Tanguay.

He is not one to blow his own horn, so when asked whether it would have happened without his efforts, he responds: "We don't know."

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But there is no doubt in the mind of former Ontario premier Dalton McGuinty, whose government joined with Ottawa to contribute $125-million to the investment. "I'm convinced that without Ray Tanguay, we would not have landed that Woodstock plant," Mr. McGuinty says.

Mr. Tanguay does acknowledge that he was determined to make sure the plant ended up in Ontario at a time when demand for vehicles was growing worldwide and Toyota was cautious about making new commitments in North America.

He said he carried a sheet of letter paper outlining the arguments for building it in Canada and spent nine months making his case with senior executives in Japan.

"First of all, we'll build it. We'll finance and we'll manage it. I walked around with that piece of paper. I was like a missionary going around saying we can do it."

His zeal was to create jobs.

"The biggest reward for me – at least as a leader – is to really contribute to the local community … to give new opportunities for the community to get some jobs. That to me is the foundation of Toyota and how we develop prosperity."

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He has also worked behind the scenes to help other companies improve.

When Magna International Inc. was adopting a lean manufacturing process, Mr. Tanguay recommended that the parts maker consult with Yasumasa Sano, a retired Toyota vice-president, who began working with several Magna facilities to make them more competitive.

Mr. McGuinty points out that Mr. Tanguay was also a proponent of the Ontario and federal contributions to the bailout of General Motors Co. and Chrysler LLC in 2009, seeing them as good for Canada.

Mr. Tanguay is a strong supporter of the recommendation by the auto industry that Ottawa and Queen's Park establish a Canada-Ontario Automotive Investment Board to help Canada compete against Mexico and other jurisdictions for new automotive investment.

Although he has no interest in heading such a board, he said that, if asked, he would make himself available to help develop a strategy and be happy to act as a mentor to the so-called auto czar. The governments are still debating whether they will create such a board.

He has been named chairman of the advisory council of the Lawrence National Centre for Policy and Management, located at the Ivey School of Business at the University of Western Ontario in London, Ont.

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For now, he plans to spend more time with his wife Marge and his grandchildren, and travelling to a home he owns on Georgian Bay near Collingwood, Ont.

He also wants to enjoy the retirement present he bought himself – a new, 467-horsepower Lexus RCF sports car – although he believes he will need to put it on a racetrack to fully put it through its paces.

Retirement will be a difficult adjustment, he acknowledges, although he cut his work week to 65 hours from 70 when he was appointed chairman of TMMC in 2010.

"I've managed my way up and I have to manage my way down."

Curriculum Vitae

Born: Aug. 23, 1949

First job: Electrohome Ltd., Kitchener, Ont.

First car: Yellow Mercury Cougar with a brown vinyl roof: "A great-looking car." He traded in a motorcycle for the car on the way home to Northern Ontario, after getting his first job.

Family: Married to Marge since 1973. Daughter Julie is a teacher in Guelph, Ont., son Stephan is a videogame and interactive systems developer in Toronto.

Retirement plans: Spend more time with his wife and family and at a property on Georgian Bay in Ontario; travel using 1.3 million Delta Airlines miles and one million Aeroplan miles earned on Canada-Japan and other flights.

Toys: A 31-foot power boat on Georgian Bay; snowmobile; new Lexus RCF sports car.

How he got to the top: "I had no dreams that I would be in management. I had no dreams that I was going to be president of a company. It was step by step. Any time I would be working for somebody, I would figure … if I can do their job, it's going to make me look good and I'm going to be qualified to do their job."

Editor's Note: The headline on an earlier version of this story said Ray Tanguay is the outgoing CEO of Toyota Canada. In fact, he is outgoing chairman of Toyota Motor Manufacturing Canada and Toyota Canada.

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