The cynical amongst you will see this as a direct rebuke to Detroit: a shot across the bow of the Big 2.8 execs who sat in front of America’s duly elected representatives and refused [almost] point-blank to take a pay cut, whilst asking for a $25b federal “bridging loan.” And so it is. But anyone who thinks Toyota is trying to make Motown look bad– a pursuit in which they need no special assistance– doesn’t have a grasp on the “Toyota Way.” Even before this auto sales meltdown, the Japanese automaker’s top ten execs earned less money COMBINED than Ford’s Alan Mulally, Chrysler’s Bob Nardelli and GM’s Rick Wagoner (individually). In fact ALL of Toyota’s execs together earned 3.92b yen. That’s $40.5m. And now Yomuiri reports “Toyota Motor Corp. will consider cutting the pay of its directors in fiscal 2009, it was learned Wednesday. The aim of the nation’s top automaker is to clarify the executives’ management responsibility after the company announced last week that it expected a 73.6 percent dive in group operating profit for fiscal 2008, due to sluggish new car sales resulting from the global economic downturn. Toyota also expects reducing the remuneration of its directors to set an example as the company prepares to embark on thorough cost-cutting.”
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Your title is off base from your link. The article says “Toyota Motor Corp. will consider cutting the pay of its directors in fiscal 2009, it was learned Wednesday.” It doesn’t say it has or will. The article also states that Executive pay in 2008 is up 17% year over year.
The article says they may cut executives salaries. But even if they don’t, I believe Toyota executives make less than any of the Detroit executives. Plus Toyota executives are responsible for long term product planning to ensure the success of the company. GM executives are responsible for day to day non-planning to ensure running of out money.
Anyone want to bet that Toyota won’t cut executive salaries?
Robert, it’s not a matter of whether it’s likely or not, it’s a matter of trust (of you, on our part). You continually blast other media for presenting unsubstantiated rumors as fact, yet this is very similar.
Though to be fair, it’s only the headline that’s questionable. The rest of the article is spot-on.
A 76% decline in profit; when’s the last time that Red Ink Rick was able to report a decline in profit? It seems to me it’s been varying levels of loss for several years now, and it doesn’t seem to have affected his salary (or conscience) at all. Well, at least not negatively.
Well, perhaps changing the title to ‘may’ instead of ‘to’ would reconcile the current state of things. A slinging match would detract from the key point of this article which is far more important.
When it comes to Toyota, I agree with Robert on what MAY happen. Toyota’s management has a very good record of leading by example in turbulent times and I couldn’t think of a better reality check to Detroit’s leadership than a profitable automaker that’s willing to voluntary cut executive compensation. The same goes for Toyota’s rank and file who are seeing the firsthand effects of a slowing global economy.
The real question is, “Why didn’t THEY think of that?”
Toyota should do what any self-respecting auto company does: file to become a bank, in order to dip into Bailout moolah easier.
GMAC goes all banky on us today.
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/20/AR2008112001459.html?hpid=topnews
And Newsweek’s Conventional Wisdom indicator doesn’t like auto exec travel modes:
http://www.newsweek.com/id/41964
RF,
Saying Toyota is likely to cut exec salaries sounds like the Kabuki theater we just watched over the last few days in Warshington with the 3 savants from Detroit. It matters much less what is likely compared to what is.
Mulally was a big disappointment. How can he expect to have Ford employees follow his lead when it’s clear that fat cat approach he’s taken is part of the problem? When/if Ford returns to profitability, everyone should share in that success, but coffer draining exec compensation is not the “way forward”.
That’s because as Americans, we don’t believe in a performance based pay culture. The perfect example (looking outside the Detroit bubble) resides on Wall Street (golden parachutes) and the NBA/MLB – where alleged “stars” are paid bazillions for riding the pine.
At least Toyota gets it.
The Three Stooges, however, don’t get it:
http://www.cnn.com/2008/US/11/19/autos.ceo.jets/index.html
@jgholt,
Although auto industry (as well as banking, investing and a slew of other industries), there is a large number of executives who are quite entrepreneurial and risk everything (salary, perks) while starting new businesses with only prospect of business getting larger and them cashing on later (CISCO, Microsoft, Google, Sun, Oracle, hedge funds). 60% of Americans are working in smallish enterprises, where bosses sharing with employees profits and tribulations in life. The reason most of us disgusted of what is going with big 3, because at this point everyone associated with those entities in minority (management, union bosses and members).
“a pursuit in which they need no special assistance”
Muahahah!
Toyota should kill their useless F1 program and funnel that money towards bringing back the Supra. Just a thought.