Toyoda Gosei brings a new focus on training future leaders

Ann Arbor, Mich. — Toyoda Gosei Co. is preparing on multiple fronts for the changing automotive landscape.

The firm has expanded in many areas of its business during the last few years, including its plastics and rubber-related operations, but also is working on developing and acquiring the talent necessary to usher TG into the future.

Chairman Tadashi Arashima recently visited the University of Michigan's Ross School of Business, which has partnered with Toyoda Gosei to form a Global Executive Development Program. In its second year, the nine-month program in Ann Arbor works with senior executives from TG locations globally to help develop leadership talent.

"I think the experience of the University of Michigan combined with our desire to foster global executives and networking, because the company is getting so big," he said. "The key success factor for us is how we utilize our big production base. We're doing basically the same kinds of things in various places, but if they do these in totally different ways then there's no control. We need to coordinate and share best practices, and get rid of any bad practices if we have them. This really helps."

The goal of the program is to further develop leaders who can bring out the best in their work force and continue to elevate TG as a leading global automotive supplier. The second session began in June and includes an expanded number of participants compared to the first.

Developing new talent is key for any industry, but especially so as big changes get closer to the horizon for automotive. Autonomous vehicles currently are being developed — though they are years away from being commercially available—but electric vehicles are here, and Arashima said those types of products bring new opportunities for suppliers like TG.

He said that as cars become more electrified, engine noise is greatly reduced, which enhances the need to reduce other noises throughout the cabin. The firm also is working to increase its presence in sensors by working together with other electronics companies to co-develop products.

"We want to reduce wind noise and so forth by coming up with better weatherstrips," Arashima said. "Overall, there's huge opportunity for us."

Lightweighting is another trend that will continue into the future, despite whatever changes may be on the horizon for U.S. regulations. The world still will have stringent standards in place, and as a global company TG will need to continue its efforts in reducing vehicle weight to improve fuel economy, Arashima said.

On the rubber front, Toyoda Gosei has invested significantly for weatherstrips in India, Mexico and in the U.S., the latter through its Meteor subsidiary — a Germany-based manufacturer with a sealing facility in Ohio. Arashima said the firm is starting to benefit from the moves, especially in India, where one of its key customers Suzuki holds more than a 40 percent market share.

The firm also invested $11 million to add 62,000 square feet at its Fluid Systems' unit in Brighton, Mich., which focuses mainly on plastic tubing. And in South America it recently acquired full ownership of its Pecval Industria Co. joint venture, which produces interior and exterior parts.

The moves, especially those in the U.S. and Europe, have pushed TG toward more balance between its Toyota and non-Toyota business, which was one of Arashima's primary goals after being named president in 2011.

At that time, about 65 percent of the firm's business came from Toyota, and the non-Toyota business was relatively small. His goal was to increase the split to about 50-50.

Overall, he succeeded in increasing the non-Toyota volume by 81 percent and sales to non-Japanese OEMs jumped by 400 percent in that time. Business with Honda also more than doubled in volume.

Though he was successful in shifting TG's dependence on Toyota, there was one thing he didn't anticipate.

"We did a very good job in increasing the non-Toyota business," Arashima said. "But the one thing I couldn't forecast was that the Toyota business also increased by 44 percent. So the ratio isn't much different.

"The current trend is that the non-Toyota business is growing a bit faster than Toyota. Our market share of Toyota's business is quite high. We're already taking a big portion of Toyota's business."