chapter  Case 1
6 Pages

Three crises for Toyota

WithJeffrey K. Liker

Dealing with a crisis caused by broad economic forces was not new to Toyota. In fact, the Toyota Production System became famous in Japan during the 1973 oil crisis, when Japanese internal sales and exports plummeted, yet Toyota recovered to profitability much faster than other Japanese companies. Toyota’s ability to invest in team members rather than laying off massive numbers of workers, as every other global automotive firm did during the recession, was based on another Toyota Way principle- self-reliance. Just as Toyota’s sales and profitability were returning and the company was again on the road to regaining its elite position, the Japanese earthquake and tsunami of 2011 struck. It was the worst disaster in the recorded history of Japan. Toyota and its direct just-in-time suppliers were relatively unaffected, since the bulk of its operations are near Nagoya, inland in central Japan.