Saving Toyota

Account of how Toyota chose to focus on restoring Prius supplier network in Japan after March 11, 2011 earthquake to help get it back on its feet.

Published: 12-Sep-2011

weeks after Japan’s March 11 earthquake knocked out more than 650 of Toyota Motor Corp. (7203)’s suppliers, halting worldwide production, the automaker had to decide where to focus its resources. It picked the Prius.

“We were rapidly burning through cash,” said Atsushi Niimi, head of production, in an interview. “We decided we had to get things going bit by bit to survive through this, so we prioritized the cars our customers wanted most.”

The carmaker started calling suppliers across the country to find parts for the Prius and luxury-brand Lexus hybrids. By March 28, Toyota’s Tsutsumi and Kyushu factories were producing the models again at 30 to 40 percent of capacity, Niimi said.

By choosing the Prius ahead of the Corolla and Camry sedans that enabled Toyota to become global No. 1 by 2008, President Akio Toyoda is staking the future of Japan Inc. on hybrid technology as the solution to the nation’s worst disaster since World War II and the company’s initial indifference to customer complaints that prompted its biggest recall. General Motors Co. (GM) supplanted Toyota as the world’s largest automaker in the first half of this year, as Japan’s last remaining company in the world’s top 50 by market value lost customers to GM, Ford Motor Co. (F) and Hyundai Motor Co. (005380) in the U.S. market, which is recovering from its deepest postwar slump.

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