Toyota battles brain drain

Toyota is facing a significant brain drain and a major overhaul of its top management because more than half of its Sydney-based marketing and sales staff are not shifting to Melbourne after local production ends in late 2017.

The closure of Toyota’s massive Sutherland Shire site, from where generations of the company’s leadership have plotted its promotional success and long-term sales leadership, and the consolidation at its Port Melbourne offices was foreshadowed soon after the axing of Toyota’s Altona plant was announced by global boss Akio Toyoda in February 2014.

Toyota was the last of Australia’s three local manufacturers to announce it was becoming a national sales company. Ford goes in October 2016 and Holden will end production at its Elizabeth plant in Adelaide around the same time as Toyota.

However, neither of those firms have added the complication of asking around 350 senior and middle management to move interstate. In total, Toyota Australia plan to downsize from six to two properties and from 4500 to 1000 staff.

It is understood that some of Toyota’s most senior current management will be part of the brain drain, although their positons are yet to be clarified publicly.

However, the next three levels of management have been sorted and appointments made out to 2018, Toyota Australia sales and marketing executive director Tony Cramb (pictured) revealed to motoring.com.au.

“The individuals who running various roles have been announced through to 2018,” Cramb said. “It is like trying to pick the Hawthorn team for 2018.

“That’s what it is like but that is now done and we are right now in the process of selecting every single role for 2018 and we have a transition plan for the first two levels of management already.”

Cramb, who wouldn’t disclose his own plans for 2018 and beyond, was clear how large the task was facing Toyota to achieve management continuity.

“We have got a huge management challenge to make sure the skill and expertise we have in bringing cars to market and generating the sales results we do lives on after this group of executives are gone.”

Redundancy packages are available to those who do not shift to Melbourne, although they are expected to stay with Toyota until the move is complete.

“They need to help us to make the transition,” Cramb said. “We have a business to run between now and the end of 2017.”

While this huge restructure will be seen as a potential opportunity by ambitious rival brands to lever away some of Toyota’s volume, Cramb revealed Toyoda had challenged local management to make sure that wouldn’t happen.

“When Akio Toyoda came and made the announcement the factory was closing, the internal challenge he set us was to have a stronger business after we close manufacturing than what we have now.

“And so that is our fundamental task; how we make it better than what we have now … Whether you are going or not is irrelevant, your legacy is to make it better.

“And that is Toyota, that is who we are. We are always trying to make it better.

“Now some people have deadlines and it is kind of inspiring; ‘now I have to get on with it’. At the same time every individual has a plan for their future, whether they are coming or not.”

While it goes through the process of restructure and relocation, the company is also rolling out its Toyota for Life dealer program designed to ensure strong customer loyalty after the local production of Camry and Aurion ends.

We covered off Toyota for Life and the expectation it would help lead to re-energised sales for the brand north of 250,000 per annum here.

These issues and others related to the challenges of the next few years are being managed internally by a group called Project One, Cramb revealed.

“Project One has five significant areas and of them two are Toyota For Life and the transition, or what we call knowledge management.”

However, Cramb admitted Toyota’s slipping sales in 2015 — down 1.1 per cent so far on 2014, which in turn was the worst result since 2011 — and the focus on Toyota for Life had caused some angst among dealers.

“Was our sales and marketing activity perfect this year? Probably not,” Cramb admitted. “Were we focussed on getting this thing set rather than being focussed on what we do well? Some would argue we were and some of our dealers have criticised us for that.”