In September of 2007, Jim Press surprised the automotive world by leaving Toyota to become president of Chrysler LLC. Press, the first non-Japanese member of the Toyota board of directors, was generally considered to be a major factor in Toyota’s North American success, and his move still has people scratching their heads. It’s been generally assumed that Chrysler’s then owner, Cerberus, promised him a big pile of money. That assumption seems to be reinforced by Press’ inability to pay $1.35 million in debt and taxes last September, which he attributed to bonuses not received due to Chrysler’s meltdown. Still, regardless of the merits of working for the strugling Auburn Hills automaker, leaving Toyota in the first place seemed like a poor career choice.
Press wasn’t the only high ranking Toyota executive that left the company in the second half of 2007. Deborah Wahl Meyer, who was in charge of Lexus marketing, jumped to Chrysler a month before Press. In October of that year, Jim Farley left Toyota to be in charge of marketing at Ford.
Their timing seemed odd.
Toyota was at the top of their game. Chrysler was already financially troubled and Ford had recently mortgaged the entire company, down to the blue oval logo, for $26 billion in cash needed to turn the company around. Though Farley seems secure at Ford, neither Meyer nor Press remains at Chrysler. Why would a number of very successful executives leave well-paid, very secure jobs for much riskier propositions?
Sometimes it’s best to jump ship even before it starts taking on any water.
Though I’m generally an unintended acceleration skeptic, thinking it’s usually driver error, obviously people within Toyota believe it to be a mechanical issue. Irv Miller, a Press lieutenant now safely retired, sent out an email this past January 16, just days before Toyota issued a recall. When it issued the recall, Toyota notified NHTSA that they had started receiving field reports of sticky throttles as early as March 2007.
Call me a conspiracy theorist (which would be funny because I’m allergic to conspiracy theories), but maybe Press, Meyer and Farley knew that the fecal material was about to hit the rotary cooling device. Sure, at first it’s a bit of a stretch to think that high level executives would be aware of low level field reports, but those reports were about the recently launched Tundra pickup truck.
The Tundra wasn’t just another Toyota. The all-new 2007 Tundra was Toyota’s point blank shot at Detroit’s bread and butter full size pickups. Though Toyota had long had its finger on the pulse of American car consumers, the pickup market was a tougher nut to crack. After missing the mark twice, first with the T-100 and then with the first generation Tundra, Toyota invested billions into the Tundra. It’s generally accepted that it costs about $1 billion to design, engineer and produce a new car or light truck. Throw in a new engine and transmission, and you can figure doubling that amount. Toyota also built an entirely new assembly plant in Texas specifically for the Tundra, and they also invested about $1 billion in their Ann Arbor R&D center that did most of the engineering and design work on the ’07 Tundra.
So there was a lot riding on the ’07 Tundra, and Toyota is a company that made its bones on statistical quality control. On a high profile, mission critical project like the Tundra, it’s not inconceivable that high level executives would be in the loop on all quality control issues.
Miller’s retirement was announced along with the pending departure of two other long term Toyota NA executives, Steve Sturm, and Dave Danzer, last December, about a month before he wrote that email. In light of Miller’s email and the subsequent recall and crisis at Toyota, it’s easy to guess at the reasons for those retirements. It’s possible, though, that previous retirements at Toyota, going back as far as 2007, may also be related to the company’s management of the problem.
Meanwhile, what are we to make of Press’s recent, post-recall assessment that Toyota “was hijacked, some years ago, by anti-family, financially oriented pirates”?
Was there by any chance a “grassy knoll” involved as well ?
I brought this up yesterday (wondering why he left) also I wonder if Press’s financial troubles have gone away and he’s signed a non-disclosure agreement, no one has heard a thing from him and you would think that the press would have hounded him on this as he was the top american at toyota for the affected time period?
Jim Press’s recent misfortune is his payback from Karma. Last spring, he browbeat the Chrysler dealers to take on a bunch of cars they couldn’t sell in order to save the company. Virtually immediately, Chrysler filed for bankruptcy, yanked the franchises of many of these same dealers, and left them a bunch of excess inventory that they had to sell at fire sale prices. Many of these dealers were driven into business and personal bankruptcy.
The truth is that Chrysler lined up EVERYONE (Banks, UAW, government, Cerberus, etc., and even some institutional investors) to get a deal done without going thru bankruptcy, but a few bondholders thought the company and/or the government would blink if they held out for more than they were going to get. Instead they pulled the C11 trigger and those bondholders got bupkis. Chrysler/Cerberus/the government did not want to go the C11 route, but once they were forced to, they culled the dealers, something that TTAC had said needed to be done for ALL three domestics.
Ronnie your article seems to indicate that Press’s real reason for leaving was the coming Tundra fiasco, not the SUA issue.
windswords, the problem is that in a real bankruptcy, those bond holders would have gotten something, as those with first priority when it comes to splitting up assets. Instead, the Obama administration ignored long standing property rights law, screwed the bondholders, and put Chrysler in the hands of the UAW, Fiat (with no investment), and the US and Canadian governments.
Ed,
Thanks for the edit at the end. It’s a curious thing. Maybe he’s angling for his old job back, though that’s not likely in light of his post Toyota comments regarding the Japanese gov’t subsidizing Toyota’s hybrid research.
BTW, when Press said “anti-family”, that doesn’t mean he thought a bunch of same sex marriage advocates were attacking Toyota. He meant people opposed to the Toyoda family.
Maybe the executives jumped ship when they realized that the massive Tundra investment was going to be flushed down the drain. Toyota will never, ever make a profit on the Tundra flop. All-in, I bet Toyota put five BILLION dollars into the Tundra. And what does Toyota have to show for it? They didn’t even put a small dent in the GM-Ford duopoly.
Wasn’t Press a leading champion of the Tundra? If so, I don’t blame Toyota for shunning him. That was a hugely bad decision that was easily predictable (gas prices were eventually going to go up and substantially shrink the big truck market).
Toyota would have been much better off to build on its strengths in the compact and mid-sized truck markets. Alas, American auto execs seem to have it embedded in their genes the notion that bigger is better. Toyota would have been better to stick with a Japanese management team so it was more insulated from American-style group think.
Ummm, the last thing you can say about Toyota’s Japanese managers is that they are insulated from “American-style group think”.
To begin with, culturally, in Japan group identity is much more important than in the US, where individuality is a cultural value. People stay with a company their entire life in Japan – and that loyalty is said to go both ways with Japanese companies being reluctant to lay off Japanese employees during hard times. So I suspect “group think” is more Japanese-style than American-style.
More directly to the point of Toyota, every single non-Japanese executive at Toyota of North America is assigned a Japanese mentor/minder from the home office. American Toyota execs don’t take a dump without guidance from someone Japanese. Though Jim Press was the first non-Japanese member of the Toyota BOD, one reason some people suggested he left Toyota is that he knew he would never be allowed to run the entire company. Geijin are only so reliable, don’t you know?
Even with the Tundra project, which was pretty much designed in Ann Arbor, the chief engineer on the project was Japanese. The chief engineer on every Toyota project is Japanese.
While it may save some face to put an American face on the SUA issue, or to blame it on CTS, an American vendor, instead of Denso, part of Toyota’s keiritsu, ultimately the responsibility for this problem lies in Toyota City.
Ron, are you saying that Press wasn’t one of the strongest champions of the Tundra within Toyota? My recollection is that he was pretty passionate about it — and even used the automotive press to further his cause.
I get that Japanese culture is more group oriented. My point is that since the 1930s auto execs for the Big Three have virtually always equated bigger with better to a much greater degree than anywhere else in the world. This is not to say that you can’t point to this phenomena among imports, e.g., look at the way the US versions of the Honda Civic and Accord have grown over the last two decades. However, I would argue that this reflects the general tendency — particularly among the Japanese — to succumb to what might be dubbed “GM envy.”
In the end the Tundra decision was undoubtedly made in Toyota City. But it doesn’t seem to be a coincidence that a “bigger is better” guy like Press had prominence during that time period. I hope that one thing the Japanese have learned from the Tundra debacle is that not succumbing to American group think regarding vehicle size could result in better long-term product planning strategies.
DrL:
I don’t think size is what hurt Tundra. If they wanted the GM/Ford truck market, size to match is a given for these buyers. If it was smaller, the truck would have been an even bigger failure (as it is, I see a few on the road, maybe even more the last few months). Small trucks can’t do what Americans like to do, which is tow large bass boats or ski boats in the weekend. The typical boat can toss the smaller trucks in the ditch in a emergency situation: it’s simple physics, not a conspiracy to sell more gasoline.
What hurt Tundra was mindspace. Before the UIA issues, most guys could be perfectly happy buying the wife a Lexus or a Camry, but would never have entertained the thought of a Tundra.
And Tundra’s initial introduction was a abject failure in Toyotaness. Cracking camshafts, rusting frames, and foldup frames when enthusiastically driven offroad (all can be found on google or youtube).
Sure, Tundra may be a equivalent product or even superior at this point to Ford or Gm’s product, but when it comes down to it, they botched a product launch, that was already on the shakey ground of American Truck Buyers. Anecdotally, as I mention above, they are ever so slightly increasing in my rural neck of the woods, so maybe people are slowly overcoming this. But Toyota will also need to solve the dealership problem to truly penetrate the American Truck Market: most areas that would be buying Tundras don’t have a Toyota dealer for 35 miles or more, at least here in NC.
To blame size is to not understand a truck buyer’s needs (at least, truck buyers who are using them for some purpose other than commuting on the interstate to work in the morning & afternoon), and to completely miss the serious problem of access to dealers for the people Toyota was targeting with the design.
Finally, last time I looked, Tundra wasn’t any better than Nissan, Chevy, GMC, or Ford in the initial reported problem ratings, and Consumer Reports rated them as having equivalent number of problems. I don’t know if that has changed for 2009/2010.