Despite Flurry of Exec Exits, Toyota Marches on Unfazed

Farley Is Third Vet to Leave Carmaker in Three Months, but Analysts Don't Think That Will Hamper Its Growth

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When Ad Age named Toyota its Marketer of the Year last November, it credited five executives for the feat. Less than a year later, only two of them remain at the automaker.
In an internal memo to staffers, Jim Lentz, exec VP at Toyota Motor Sales, said that the automaker has 'an amazingly deep bench.'
In an internal memo to staffers, Jim Lentz, exec VP at Toyota Motor Sales, said that the automaker has 'an amazingly deep bench.'

Jim Farley, group VP-general manager of Lexus, who in a surprise move is leaving for Ford Motor Co., is the third Toyota vet lost to a Detroit rival in three months. In September, Jim Press, president of Toyota Motor North America, announced he was decamping to the "new" Chrysler as vice chairman and president. And the month before that, Lexus VP-Marketing Deborah Wahl Meyer signed on at Chrysler as chief marketing officer.

All told, Toyota Motor Sales USA has never had such a flurry of high-level executive defections during its half-century in the U.S.

So will that stop -- or even slow down -- the trajectory at Toyota, which this summer blew by Ford for the No. 2 slot in the U.S. car market?

Conventional wisdom says no.

In an internal memo to staffers obtained by Ad Age after Mr. Farley's departure was made public, Jim Lentz, exec VP at Toyota Motor Sales, admitted that at some companies, three senior execs leaving in three months "could be a serious blow." But in the memo, Mr. Lentz, who was unavailable for comment, said that isn't the case at Toyota, which "has an amazingly deep bench."

Jim Hall, VP and auto analyst at consultant AutoPacific, echoed that reaction, saying, "Toyota's system works astonishingly well with different people involved."

The reason: "If you take out an individual [from Toyota], the business still works because they have a culture that doesn't depend on one person," said David Murphy, former head of the Toyota brand's shop, Saatchi & Saatchi, Los Angeles, and now co-president of independent shop Barrie D'Rozario Murphy, Minneapolis.

Indeed, Toyota didn't miss a beat last week, moving quickly to replace Mr. Farley, promoting Mark Templin to group VP overseeing Lexus from VP-general manager of Scion. Mr. Templin and Mr. Lentz are the other two executives credited by Ad Age in its Marketer of the Year story.
Units sold from January to September 2007
Toyota includes Scion and Lexus. Ford Motor Co. includes all brands.
1. Compared with the same period in 2006. Source: Automotive News

That said, however, Wes Brown, VP of consultant Iceology, said the trio of exits should spur "a time for reflection" inside Toyota to examine whether anything in its corporate culture is driving out talent.

Two executives close to the automaker, in fact, have said Toyota's Japanese management is becoming more involved in its U.S. operations since the launch of the Tundra full-size pickup early this year.

The redone 2007 Tundra was Toyota's most competitive assault on Detroit's truck stronghold but was slow out of the gate. The automaker didn't have enough of the bigger, four-door, loaded models that early buyers wanted, and the more affordable two-door model wasn't selling well. Incentives were added after a month and the production mix fixed. Toyota will meet its modest target of 200,000 units this year.

A Toyota spokesman said, "I don't think there's been any great changes" in Japanese oversight of the company. He said Japanese co-coordinators, who stay three to five years in the U.S. to liaise with Japan and the rest of the world, are at fairly high levels, but there's no indication they've stepped up their involvement in the business here.
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