(Updates with comments from the chief cabinet secretary in the fourth paragraph.)
Sept. 17 (Bloomberg) -- Eiji Toyoda, who spearheaded Toyota Motor Corp.’s expansion in the U.S. as the automaker’s longest- serving president, has died. He was 100.
Toyoda died at 4:32 a.m. today because of heart failure at the Toyota Memorial Hospital in Toyota City, Japan, Toyota Motor said in a statement. Funeral services will be held for close family members only, it said.
During his 57-year career, the younger cousin of Toyota Motor’s founder helped reshape a maker of Chevrolet knockoffs into an automaker whose manufacturing efficiency became the envy of General Motors Corp. and Ford Motor Co. By the time he stepped down in 1994, the company was assembling Corollas in the U.S., had started the Lexus luxury brand and had initiated a project that would develop the world’s most successful gas- electric vehicle, the Prius.
“He played an important role in leading Toyota’s expansion into North America, and in developing the carmaker into a global company,” Japan’s Chief Cabinet Secretary Yoshihide Suga, said at a press conference in Tokyo. “He was someone who was indispensable to the nation’s entire industry.”
Toyoda was a cousin of Kiichiro Toyoda, the founder of the company that bears a slightly altered version of the family’s name. He was one of six presidents to come from the family.
Toyota fell 0.6 percent to 6,240 yen at the close in Tokyo trading, while the Nikkei 225 Stock Average lost 0.7 percent.
During the 69 years he worked at the company, based in central Japan’s Toyota City, it rose from assembling its cars out of parts made by GM to being 16 times more valuable than the Detroit-based automaker. Toyoda pushed his company to learn from Ford and GM about mass production of automobiles.
Toyoda became president of Toyota Motor Co. in 1967 and served for 15 years -- longer than anyone before or since. In 1982, Toyota Motor and Toyota Motor Sales Co. merged to form Toyota Motor Corp. Toyoda became chairman of the combined company, serving until 1992. He was made honorary chairman of the company upon retirement and kept the title of honorary adviser.
Under his stewardship, the carmaker set up at least 10 new factories, began exporting to dozens of countries, established just-in-time production and built a reputation for manufacturing excellence. The Corolla became the best-selling car of all time. He stressed the importance of manufacturing concepts that became central to Toyota’s production methods, such as “kaizen,” or continuous improvement, and “jidoka,” or the use of machines that shut down when irregularities are detected.
His greatest achievement may have been laying the foundation for the company to apply its manufacturing expertise overseas, which led to the formation of Toyota’s first venture in the U.S. in 1983 -- a year after he passed the presidency to his cousin, Shoichiro.
That venture, New United Motor Manufacturing Inc., in partnership with GM, began production in 1984 in Fremont, California. Its success showed that Toyota’s manufacturing principles could be applied across different cultures, giving the company the confidence to make its own independent plants in Kentucky, Canada, England and France, according to Toyoda.
He also oversaw Toyota’s development of Lexus, approving development of the luxury car in 1983 to compete with Mercedes- Benz and Bayerische Motoren Werke AG’s BMW. The first vehicle, the LS 400, went on sale in the U.S. in 1989.
After stepping down from all executive roles, Toyoda continued to come into the office to consult with his successors, and took on roles such as chairing the company’s commemorative museum, according to spokesman Naoto Fuse, who was formerly director of the museum.
The U.S. Automotive Hall of Fame inducted Toyoda in 1994, making him the second honoree from Japan, after Soichiro Honda.
“As a member of the automobile industry, this is indeed a great moment for me,” he said in a statement upon his induction. “Ever since Toyota’s establishment in 1937, I have been involved in this wonderful business, and as long as my engine keeps running, I intend to give back as much as I can for the industry’s further development.”
Toyoda was born on Sept. 12, 1913, near Nagoya, the second son of Heikichi and Nao. He grew up in Nagoya inside his father’s textile mill, schooled from an early age in machines and business, according to his autobiography, “Toyota: Fifty Years in Motion.”
He graduated from the University of Tokyo with a degree in mechanical engineering in 1936 and joined Toyoda Automatic Loom Works Ltd., working for his uncle, Sakichi Toyoda, inventor of a weaving loom that automatically shut itself off when a piece of fabric broke.
At the time, Sakichi’s son, Kiichiro, was heading an automobile division of Toyoda Automatic Loom Works. In 1937, Kiichiro founded Toyota Motor and took his younger cousin with him.
Toyoda, then in his 20s, started on the factory floor before being promoted to production planning and director. From the outset, he was given broad freedom to pursue interests ranging from fixing cars to helping establish the company headquarters in Toyota City. He became a director in 1945.
Toyota and Ford held discussions on jointly making cars in the U.S., until the Japanese attack on Pearl Harbor in 1941 and the Pacific War interrupted contacts. Talks resumed after World War II but did not lead anywhere.
In 1950, during its occupation of Japan, the U.S. Army sent Toyoda to Dearborn, Michigan, to learn about mass production from Ford. The U.S. needed Toyota to build trucks for its troops in Korea.
Toyoda concluded that Ford was barely ahead of the much- smaller Toyota in terms of technology. Back in Japan, he concentrated on making cars in small batches at maximum efficiency. He began using IBM machines to cut production costs, according to Kazuo Wada, professor of economics at the University of Tokyo and author of “A Fable on Manufacturing: Ford to Toyota.”
Building on the work of his cousin, Toyoda developed what became known as the Toyota Production System, which aimed to eliminate excess inventory of parts and other waste. The manufacturing system became so successful it was eventually adopted by other carmakers, and by manufacturers outside the automotive industry.
He had three sons and a daughter with his wife, Kazuko. He is survived by his eldest son, Kanshiro, according to Toyota’s statement.
--With assistance from Laurence Arnold in Washington and Masatsugu Horie in Osaka. Editors: Young-Sam Cho, Chua Kong Ho