Toyota's President, Akio Toyoda, reclaims leadership role at the company.
Akio Toyoda, the charismatic head honcho of Toyota Motor and the grandson of the car-making icon, Kiichiro Toyoda, has been stirring up quite a fuss lately. As the FT puts it, Akio "nurtured a fascination" for his grandfather since childhood, even making a pilgrimage to his grave when he hit the same age as his grandfather did when he passed away. And now, at 57, it seems Akio's ready to rekindle Kiichiro's dream – just in a more contemporary way.
In a power play some call a questionable step for corporate governance in Japan, Akio has orchestrated the $33 billion buyout of the original parent company, Toyota Industries. Bloomberg paints a grim picture of the deal, claiming it's a move to reassert control by the Toyoda family, despite their minuscule 2% stake in the car-making powerhouse. They own it, baby!
According to the Observer, this takeover is more than just a business deal; it carries deep symbolic weight. The controlling stake of Toyota Industries will now shifting to Toyota Fudosan, an unlisted real estate firm serving as the Toyoda family's private investment vehicle. This has some investors crying foul, alleging dodgy dealings left and right. Fork over $7 million, Toyoda, and let the banks foot the rest!
As for the critics claiming this is all about consolidating family power, one might ask: What's wrong with that? In the face of mounting pressure for family companies to streamline their corporate structures in line with government reforms, this could just be a master move. But in the eyes of foreign and minority investors, it could signal the undervaluation of their stakes and a disregard for minority shareholder rights. A tricky situation unraveling before our very eyes.
Some might argue that Toyoda's scepticism about electric cars, evident by his reluctance to indulge in their transition, plays a role in the intrigue surrounding his moves. Toyota's annual revenues, accounting for 8% of Japan's GDP, certainly paint a compelling picture of his success at the company's helm. But despite his remarkable record of shareholder returns that rival those of his peers, over one-third of foreign institutional investors opposed his re-election as a director at last year's AGM. It seems investors have mixed feelings about Toyoda. Some mourn his lack of credit despite his self-awareness and resourcefulness. Others, however, criticize his backseat driving and call for him to hand over the keys.
So, Akio Toyoda – hero or villain? The answer, like the situation, is far from black and white. Time will tell if this bold move has set Toyota on a course for greatness or plunged it into the abyss of financial controversies. Stay tuned for updates on this intriguing saga!
[1] "Toyota in $33 billion bid seen as power play", Bloomberg, 2023. [2] "Akio Toyoda orchestrates $33 billion buyout of Toyota Industries", FT, 2023. [3] "Toyota Industries reduced to family plaything in $47 billion deal", New York Observer, 2023.
In this power play, Akio Toyoda's acquisition of Toyota Industries for $33 billion is not only a business maneuver but also carries deep symbolic weight, as it shifts the controlling stake to Toyota Fudosan, a private investment vehicle of the Toyoda family.
This move, criticized by some as a questionable step for corporate governance in Japan, could be a master move for Toyota to streamline its corporate structure in line with government reforms, or it could signal the undervaluation of foreign and minority investors' stakes and a disregard for minority shareholder rights.
