Toyota Chief in Michigan (Update)

Toyota chief intends to make mark in state

   As General Motors celebrates its top ranking in the latest J.D. Power vehicle quality survey, and state officials bask in the news that Michigan bested Texas and 48 other states in manufacturing job growth, it’s also worth noting one more proof point that the Detroit region still matters as a global automotive hub.

   Toyota’s top U.S. engineering and manufacturing executive just moved into a house in Novi.

   That’s right, Osamu (Simon) Nagata, who became president and CEO of Toyota Engineering & Manufacturing North America (TEMA) in April, has chosen to establish his personal residence in southeast Michigan

   — not in Kentucky where TEMA headquarters and Toyota’s biggest manufacturing complex are located, and where previous TEMA presidents called home.

   It may not seem like a big deal that Nagata, 56, has decided to sleep in Michigan when he’s not in some hotel room traveling to Toyota’s 14 North American manufacturing plants or meetings in Japan. He has offices at both the Toyota Technical Center near Ann Arbor and at TEMA in Erlanger, Ky.

   But it is a big deal.

   In an interview last week, Nagata made it clear that he intends to cut a high profile in Michigan automotive leadership circles — and that he aims to boost the influence of American engineers and designers on future Toyota cars and trucks.

   “As president, I feel responsible for sharing our thoughts, our commitments with key people in Michigan’s automotive industry,” Nagata said, noting that “most North American supplier headquarters are located in Michigan.”

   “I hope to also have frequent conversations with key industrial leaders, critics, key media people, government officials and our colleagues in the auto industry,” he added.

   One factor driving Nagata’s determination to give the 1,150 U.S. employees of Toyota Technical Center (TTC) more responsibility for future vehicle designs and features is that the tastes of car buyers in Japan and the U.S. are diverging. said, “has been leaning much more to compact cars rather than luxury vehicles.” The market share of what he called minicars, with engines 2 liters and smaller, has grown to about 90% in Japan, much higher than in the U.S. or even China, where consumers like luxury vehicles.

   It’s only natural, he said, that local designers and engineers are most attuned to trends and consumer desires in their markets. “Michigan, I believe, is the best U.S. location for great designers, great production engineers. It is very important for TTC USA to have more influence back to Japan, because we are stationed close to our customers,” Nagata said. Toyota in recent years has sold roughly the same number of vehicles in the U.S. as in Japan.

   Toyota already has Ann Arbor-based chief engineers for the Avalon, Venza, Sienna and Tundra models made in the U.S. With the recent announcement that Lexus ES production will move from Japan to Kentucky for the 2015 model year, some of that engineering work could be headed for Michigan, too.

   During an earlier posting from 2000-06, Nagata headed Toyota’s U.S. purchasing, based in Kentucky. Returning to Japan in 2007, he was a plant manager and then led a task force formed in 2010 to deal with Toyota’s product recall issues, reporting directly to corporate CEO Akio Toyoda. He was named deputy chief of the automaker’s external affairs group in 2011 and currently chairs the international committee of the Japan Automobile Manufacturers Association.

   John Henke, president of Planning Perspectives, a Birmingham firm best known for its surveys of relationships between auto manufacturers and suppliers, said Nagata led Toyota in the early 2000s to the best scores he’s ever seen on his surveys. “Simon, along with Tom Stallkamp at Chrysler (in the 1990s) were at the pinnacle of practicing what they preached about collaboration with suppliers,” Henke said.

   When I asked Nagata for his thoughts about GM’s recent triumph in the latest J.D. Power initial vehicle quality survey, the first-ever win by a Detroit Three automaker, he said, “It’s kind of an encouragement to Toyota. We need to work harder. This is healthy competition.”

   Those are words of respect from one rival to another.

   “Next year,” Nagata vowed, “we will do better.”

   GM, Ford, Chrysler and other automakers would be wise to heed those final words as a warning.

TOM WALSH TALKS WITH OSAMU (SIMON) NAGATA ABOUT MOVE

Osamu (Simon) Nagata