Taking responsibility: Toyota wants 10 exiled Daihatsu bosses to return their bonuses

Toyota has asked 10 former members of Daihatsu’s top management to return their bonuses to the company. This comes following Toyota’s intense in-house clean-up at its compact car subsidiary Daihatsu after the latter was found to have falsified vehicle homologation and crash test data for decades.

Former chairman Sunao Matsubayashi (resigned), former President Soichiro Okudaira (Yusuke Takeda), executive vice-president Hiromasa Hoshika, chief officer Yusuke Takeda (formerly Director, Sales & Customer Service), chief officer Toshinori Edamoto (formerly Director, Corp. Management), and five other unnamed chief officers will be returning their bonuses received for financial year 2023.

The 3 highest ranking management members - Chairman Matsubayashi, President Okudaira, and Executive Vice President Hoshika – will return 100% of their bonuses. Director Takeda and Edamoto will pay back 50%, while the remaining chief officers will return between 10% to 50%.

Daihatsu said, “As stated in our press release dated December 20, 2023, we take it very seriously that, as a background to these procedural irregularities, the responsibility for the fact that a corporate culture in which regulations and rules were not observed was formed lies with management.”

The job titles of Executive Manager and Deputy Executive Manager will also be abolished, to streamline reporting structures. This follows an earlier announcement abolishing the position of Chairman at Daihatsu.

Also read: Post Daihatsu scandal - major shakeup of top jobs, Toyota could manage emerging market business

The same announcement also said that the Toyota-Daihatsu co-owned internal company Emerging Market Compact Car Company will be dissolved, replaced by Toyota Compact Car Company.

To prevent a reoccurrence of the scandalous practices, which Toyota says was a result of unrealistically short lead-time to develop new models, and lack of channels for development staff to raise an alert, Daihatsu is revamping its work culture. Among the measures taken are, in Daihatsu’s own words:

• Establish a business operation system that allows staff to spend time and man-hours on necessary work by eliminating meaningless formal written reports from staff to managers and actively utilizing digital tools to execute tasks more efficiently.
• Review the development schedule according to the size of the project, and develop a structure where, if delays still occur, the Andon (visual alert for quality problem detected on a production line) cable is pulled when the Genba (frontliners / fieldwork) notifies of an irregularity.
• Establish a system that allows for the proper way of working, where everyone stops, helps each other with resources between functions, and reviews schedules, if delays occur

Toyota took full control of Daihatsu in 2016, and in that same year, tasked Daihatsu with the responsibility of developing A-/B-segment compact cars for emerging markets, like Southeast Asia.