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Toyota Announces $7.8 Billion Long-term Diversity Commitment

Toyota Announces $7.8 Billion Long-term Diversity Commitment

Published 08-09-01

Submitted by Toyota Motor Corporation

Toyota announced today a comprehensive rededication to diversity and inclusion that will generate more than $7.8 billion in sustainable minority economic impact by Toyota’s North American companies over the next 10 years. These funds will flow to the minority community through procurement, advertising, dealer development, community involvement, professional services and career training. Representing a dramatic increase over the present levels of commitment, the plan also includes processes to ensure accountability and delivery of promises. The strategy was jointly developed by Toyota Motor Sales (TMS), U.S.A., Inc. and Toyota Motor Manufacturing, North America, Inc. Toyota also announced a visionary multi-million-dollar industry initiative to improve minority representation in lucrative dealership management and technical positions. This new program will go beyond traditional corporate diversity measures that focus on compliance and quotas, helping to launch careers and fill the automotive dealership pipeline with diverse talent.

"With this comprehensive, 21st Century strategy for diversity and inclusion, which is firmly rooted in the Toyota principles of continuous improvement and respect for people, we have the opportunity to stand out as a leader in corporate diversity," said James E. Press, TMS executive vice president and chief operating officer.

A series of meetings with Rainbow/PUSH Coalition founder Reverend Jesse Jackson provided Toyota with an opportunity for a comprehensive review of its existing diversity programs. As a result, significant new opportunities benefiting both Toyota and the auto industry were identified, making possible the benchmark plan announced today. The company will seek additional feedback and support from a variety of minority organizations and leaders as it goes forward.

Creation of career opportunity for diverse candidates at all levels, especially retail dealership management, is a primary goal. Toyota’s newest programs, collectively named the "Toyota Avenues for Advancement Program" (TAAP), will address this issue by creating sustainable avenues for diverse candidates to become successful dealership service technicians and dealership managers.

The Toyota Avenues for Advancement Program has two components:

1. The automotive retail environment, which employs more than 1 million Americans at more than 22,000 dealerships, offers thousands of well-paying management opportunities. Toyota intends to take a leadership role in opening opportunities for minority candidates. Partnering with its own dealers as well as major publicly and privately owned dealer groups representing all makes, Toyota funding will help subsidize real-world experience, as well as education through such institutions as Northwood University’s automotive retail curriculum and the University of Toyota. TAAP will open a new dimension to increase diversity in the retail environment. Retail automotive experience, especially at the general manager level, is considered essential for anyone aspiring to acquire equity in a dealership.

2. TAAP’s second component addresses technical job opportunities. Each year, the auto repair and service industry faces a shortage of 60,000 trained technicians to service today’s sophisticated cars and trucks.

Toyota will replicate the successful Los Angeles Urban League Automotive Training Center (ATC), a joint venture between TMS and the Los Angeles Urban League, by opening a similar training facility in the eastern United States. Like the ATC in Los Angeles, the center will offer no-cost job training and placement for unemployed and underemployed urban residents in the automotive service industry.

TMS has invested more than $7 million in the ATC since 1993. With more than 860 graduates to date, the ATC has generated more than $20 million in economic impact. In support of the new center, Toyota will invest an additional $4 million in construction and $1 million annually to operate the new facility in the East.

"Our mission is to prepare professionals to succeed at all levels and types of retail operations," said Press. "The Toyota Avenues for Advancement Program will create a talent pool, helping fill the pipeline with qualified service and management candidates, for not only our own dealers but for the entire automotive industry, benefiting both dealers and their customers."

Other major elements of Toyota’s overall diversity programs are centered in the areas of procurement, advertising, minority dealer development, philanthropic activities and corporate governance. Examples of specific initiatives in these areas announced today include:

Toyota will increase spending with minority advertising firms 37 percent to $50 million per year and will retain a new African-American agency to join its two existing agencies by September 1, 2001.

While Toyota leads the industry in ethnic diverse minority dealer success and is number two among major carmakers for percentage of ethnically diverse minority dealers, the company’s goal is to be the leader in both respects. Despite business realities such as constraints by state laws, the role of publicly owned dealer groups, and the unpredictable number of dealerships for sale, Toyota is committed to increasing its ethnic diverse minority dealer count by four to six per year over the next 10 years. The company also will increase its dealer development financial assistance budget by more than 67 percent to $25 million.
Toyota’s U.S. operations will be responsible for an annual total of $700 million in procurement from minority-owned suppliers. Through active supplier development programs, the company’s manufacturing arm (Toyota Motor Manufacturing North America) is well on track to surpass its commitment to achieve 5 percent of its purchasing from minority businesses in 2002, a target level shared with the other "Big 4" automakers. Toyota’s sales and marketing operation (Toyota Motor Sales, U.S.A.) expects to reach the same 5 percent level a year later. The companies’ procurement departments also challenge their suppliers to match the same level of minority spending among their key second-tier suppliers.

As an international company, Toyota Motor Sales, U.S.A., is a wholly owned subsidiary of an overseas firm and, therefore, does not have the traditional American board of directors structure. In a move believed to be unprecedented for a multi-national company, TMS will establish an outside diversity advisory board, consisting of high-level members with experience in such fields as business, law, labor and government. To be formed by the end of this year, advisory board positions will be structured as closely as possible to traditional board members, who participate in strategic decisions. Toyota’s vision is to make this board a model for diversity guidance.

Among other provisions of Toyota’s far-reaching and accelerated diversity efforts are enhancement of its community involvement and philanthropy programs and expansion of minority representation at every level within its workforce, already one of the most diverse in the auto industry.

"Toyota has built its reputation for quality on the idea of continuous improvement and respect for people," said Press. "That is why we are rededicating ourselves to what is not just a social responsibility but a business imperative. We believe this strategic diversity plan reflects well on Toyota’s business culture and on the efforts of the Rainbow/PUSH Coalition to improve society."

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