We think it was ironic Jim Press, the newly minted President and Chief Executive of Toyota Motor North America, was scheduled to speak at today's Inforum luncheon at the Atheneum Hotel in Detroit. Especially because the only reason he was speaking as Prez rather than as President of Toyota Motor Sales USA was because of the alleged dalliances of the previous Chief Executive. We're of course talking about Hideaki Otaka, alleged to have made repeated, unwanted Clinton-esque advances against his former executive assistant, Sayaka Kobayashi. Kobayashi has dropped a lawsuit in New York State Supreme Court for $40 million in damages. Sounds to us like Mr. Press had a pretty tight rope to tread this afternoon. Why such a tight rope? Well, the old name for Inforum was the Womens Economic Club of Metro Detroit. Lucky for Mr. Press, he seems to have done pretty well — hit the jump if you'd like the full remarks.
Press: Toyota Will Emerge Better From Suit [Washington Post]
Toyota's Otaka Is Totally Feeling It [internal]
As prepared for:
President, Toyota Motor North America
Inforum (formerly Women's Economic Club)
May 11, 2006
"A New Day for Women and the Auto Industry"
Good afternoon! It's great to be back in Detroit, and I'm happy to spend some time with you, members and friends of Inforum.
Believe me, I've done the math and I KNOW women rule the world!
Today, the spending power of women has never been greater...affecting 80 to 85% of ALL consumer buying decisions...or nearly $7 Trillion! That makes all of you my boss, so I'll try to do a good job for you this afternoon.
I want to start by having a little fun, and giving you a pop quiz. Now, don't worry, it's a fun test and you won't be graded. So, whoever gives me the first right answer will win a new Lexus. How's that sound?
Well...actually, it's a scale model of a Lexus, but it will be quite a conversation piece for your home or office.
Are you ready to go? OK...if you know the answer, raise your hand as quickly as possible and I'll call on you. The first one with the right answer takes home the car.
Here's the first question: How many computer chips does the typical passenger car have onboard today?
OK...that's a tough one. I just wanted to see if you were still awake after that dessert. Let's make it a multiple choice: does the average car contain 33...47...or 70 computer chips?
The average car has 70 onboard microprocessors.
What the heck do all those chips do? Well, they control audio systems, air conditioning, brakes, air bags and many other functions to make sure your car is safe, comfortable and efficient.
Even more impressive, software for the average car today has more than 35 million lines of code...100 times the amount needed for a fully packed interactive computer game!
That illustrates just how advanced and complicated cars are today and why they are smarter, safer and more comfortable than ever before.
And think how impressed your kids will be when you tell them you managed more computer code driving home than they did playing games all afternoon.
Yeah, right...Well, we can dream, can't we?
Here's question No. 2...Based on the latest research, who was the first person to design a car?
This is tricky, so I'll give you some choices. Was it Karl Benz? Ransom Olds? Leonardo da Vinci? or Fred Flintstone?
Actually, Fred isn't that far off. Leonardo da Vinci designed the first car more than 500 years ago - in 1478. That's right...Italian scientists recently uncovered drawings from Da Vinci they consider to be the first definitive vehicle design.
What did the da Vinci coupe look like? By all accounts, it was a boxy, open-top three-wheeler, made mostly of wood, about six feet long and five feet wide.
So, if you put Leonardo's car together with the computer chips in the first question, what do you get? That's right...The Da Vinci Code!
All right, here's the last question: "Who are safer drivers, men or women? Well, at least you have a 50-50 chance on this one...
The answer: That's right...women. According to an Allstate insurance survey, only 52% of women report driving 20 mph over the speed limit vs. 64% of men.
Well, that was a lot of fun, and hopefully it provided you with some new insights about the automotive business. It's also a great lead-in to what I want to talk about today: the future of the auto industry; the future of Detroit; and the future of women as both leaders and as a consumer force in our industry.
I know the headlines here and around the state of Michigan have been bleak and that a lot of people are scrambling to re-order their lives in the wake of financial troubles at Ford and General Motors and at Delphi and other suppliers.
There's pain, disappointment and probably some despair about the future. That's understandable, and I don't for a minute want to discount the hardship that some people are experiencing.
I'm sure all of our hearts go out to those faced with major life challenges. I do, however, want to tell you that I see great hope, and passion, and potential for the future and that I firmly believe Detroit will ALWAYS play a starring role in the world's greatest industry.
Let me tell you why.
Despite what you may be seeing and hearing, the automotive industry is alive and healthy. Globally, sales continue growing because people are gaining a higher standard of living and discovering the freedom that cars provide in major developing countries like China, India, Russia and Brazil. In some ways, they are like America was in the Roaring 20s.
Here in the United States, business is solid. The auto industry is coming off its third best year in history, and sales so far this year are nearly on the same pace.
General Motors and Ford are taking bold steps to recover, and there are signs good things starting to happen. Both were profitable in Asia, Europe and Latin America in the first quarter and some analysts believe GM's job buyouts will pay for themselves and generate significant cost savings in less than two years.
In addition, General Motors sales were up a whopping 75%, and Ford sales doubled during the first quarter in China, rapidly becoming the second largest auto market in the world after the United States.
I firmly believe GM and Ford will both come back stronger than ever and be very successful. And that's important because they are vital to our industry, vital to this area, and vital to our national economy.
It won't happen overnight, but it WILL happen, and consumers will be the biggest winners because greater competition will spur better and better cars.
I think it's also important to note that the majority of auto suppliers — many with operations here in Michigan — are healthy and growing.
In fact, a recent analysis by CSM Worldwide confirmed that 3 out of 4 auto suppliers are in good financial shape.
So, at Toyota we're cautiously optimistic and projecting annual industry sales of about 17 million this year, up just a hair over last year's. That would make 2006 not just another solid year, but also one of the top three or four in automotive history.
For the long term, we believe annual industry sales of 20 million vehicles — 3 million higher than now — are within reach in the next decade, and the whole industry will benefit from that rising market tide.
So...where's the boom coming from? First, people are living longer and driving longer. CNW Research found that 7 vehicles — more than half of the 13 cars the average American buys over a lifetime — are purchased AFTER the head of the household turns 50.
Sixty percent of the U.S. population will be 50 or older in the next five years, and Baby Boomers won't reach the peak of their spending power until 2009, so there are enormous opportunities for growth ahead.
Second, Generation X is maturing and adding cars to their household. They already buy more than a fifth of all new cars and are entering their child-rearing years when they'll need family vehicles.
Third...the 63 million people of Generation Y are reaching driving age in this decade. It's the second-largest generation of all time and will start flexing its spending power in 2010, buying one of every four new cars.
And fourth...strong immigration will continue because America is still viewed as the land of opportunity by people all over the world.
The result of these trends coming together is simply astounding. During the next 19 years, the U.S. population will increase by 70 million, or equal to the populations of California, New York and New Jersey COMBINED!
Along with phenomenal demographics, market drivers are on our side too. Our gross domestic product is growing, consumer spending is positive, jobs are increasing and productivity is rising. And new booms in information technology, biotechnology and nanotechnology will boost our economy even further.
All of this together adds up to a golden opportunity in the years ahead for automakers, suppliers and all those who support the industry.
Like Ford and GM, I fully believe this region will stage a major comeback and that Detroit will shine like it did when you recently hosted baseball's All-Star Game and football's Super Bowl. This is a special place where the fortitude of the people has honed this region into a powerful symbol of American ingenuity and re-invention.
There's an energy here that is unique, bold and everlasting. That's why Toyota is so bullish on this region, and why we have big plans here. Our goal is to make the Detroit area Toyota's North American hub for research, development and engineering. It absolutely will be the focal point for our efforts to design cars and trucks by Americans...for Americans.
Toyota set up shop here with a Technical Center in Ann Arbor nearly three decades ago, and our operations have been steadily expanding ever since, including the addition of a design studio in 2004.
This year, we'll start work on a major expansion in York Township where we're building a 350,000-foot structure to house our entire U.S. engineering group. When it opens in 2008, we'll have more than 1,100 associates, and there's plenty of room to grow because we purchased 690 acres of land — 7 times more than our current facility in Ann Arbor.
In addition, some of our key suppliers and subsidiaries are moving here:
Hino Motors, our truck subsidiary, moved its U.S. headquarters to Farmington Hills in 2005;
Aisin Seiki, a key supplier, opened up a proving track last October in Fowlerville;
And Denso, our largest supplier, directs North American operations from its headquarters in Southfield, has three plants in Michigan, and is the largest employer in Battle Creek.
And Toyota's not alone. Nissan recently doubled its engineering staff in Farmington Hills and Hyundai-Kia is adding 600 jobs to its new technical center in Superior Township.
Others will follow because Michigan has a deep pool of talented workers; the state's colleges and universities are some of the best in the nation, and it's the automotive capital of the world.
Today, Michigan is home to more automotive-related R & D centers — a total of 215 facilities — than all the other states, Canada and Mexico... COMBINED!
And there's more good news statewide. To stimulate the production of ethanol, Michigan has set up 20 agriculture zones with tax incentives for companies that build ethanol and other renewable energy facilities. And no less than 4 ethanol production plants are being built right now in the region.
There's also a pioneer hydrogen technology park in Southfield and a new, 100-acre bio-tech park being built in Wayne County.
Michigan is also home to some leading-edge work on wind-generated energy, with commercial wind turbines operating in Traverse City and Mackinaw along with new turbine farms being built in Huron and Sanilac counties.
So, yes, there's a lot of transition going on here now, and definitely some pain but overall there's great hope for the future.
Southeast Michigan is poised for a new day of progress that will attract fresh jobs and fresh companies and Toyota is proud to be a part of it.
OK...so now we know that things will soon be looking up for the auto industry, but what about the other key pursuit of Inforum, the empowerment of women?
After all, the auto industry has been a male-dominated business for nearly a century, so some people don't have much hope for progress.
Well, once again I have positive news. Women today are playing increasingly vital roles as both leaders and consumers in the auto industry, and the trend gets stronger every year.
At the risk of preaching to the choir, let me quickly list some remarkable statistics about the growing power of women in the world and in the marketplace:
46% of U.S. workers are women
46% of all privately held companies are owned by women
57% of the bachelor's and master's degrees awarded in 2005 went to women
55% of married women earn half or more of their families' income
More women hold elective office than ever, with 14 U.S. Senators, 67 Congressional representatives and 8 Governors
And...47% of all investors are women
In the auto industry, the numbers are even more dramatic. The industry trend of women buying more cars has been on the upswing for the past 12 years and currently hovers at 46% — nearly half of all vehicles.
For Toyota, it's even higher. 51% of all Toyota vehicles are purchased by women, and when you to narrow the list to just "passenger cars" purchased, about 59%, or 3 out of 5 of our buyers, are women.
All I can say is thank you very much, and let me know if there's anything else I can get for you while I'm in town.
I really wasn't kidding earlier when I said you are my boss. And luckily, I've had the good fortune to have several women mentors in my life.
My mom, of course, was a key influence. And so is Pat Moran, the president of our largest private distributor in the country, responsible for about a fifth of our U.S. business.
I'm also guided by some incredible women leaders at our headquarters in California.
Our chief information officer, top lawyer, top financial planner, the head of our North American parts operations and the leaders of Lexus marketing and service are women and playing crucial roles in Toyota's success.
In fact, people tell me it's BECAUSE we have so many women leaders that we're doing so well now...and I don't dispute that.
Now, are we doing as much as we can as a company on this front? No, we're not. We need to do more, but we are making some good progress.
In vehicle design, for example, we carefully considered the 'hip height' while designing our Toyota Highlander and Lexus RX sports utility vehicles. Our goal was to accommodate drivers who wanted the greater visibility of higher seating, but didn't want to step up to get into their vehicles. That goes for both men and women, but our surveys show that women appreciate this hip-height selection the most, and the Highlander and RX have been big sellers.
The high mileage, low-emission benefits of our cars and hybrids also rank high with women.
Along with design improvements, we're increasing our company's profile in women's sports by sponsoring a key woman tri-athlete, Beth Hibbard, and professional golfer, Janice Moodie.
And we are in our second year of a major partnership with the Women's National Basketball Association. A key part of our association is support of the WNBA "Read to Achieve" program that features players promoting the importance of reading to young fans.
We're also a major sponsor of the Danskin Triathlon Series, the largest such series in the country, and the Los Angeles Revlon Run/Walk for Women. I'm particularly proud that the volunteer Toyota Revlon Run/Walk team has been the top-fundraiser for the past 3 years.
In terms of improving the profile of women in society, we're teaming up with Glamour magazine for the second year to sponsor "Moving Forward" awards to honor three American women.
The Toyota winners will be invited to attend the annual Glamour "Women of the Year" awards in New York City and receive a Toyota hybrid vehicle.
We know we still have a long way to go to fully reach out to women consumers, but we are getting better every year and will continue refining our efforts. And at the center of those efforts is our long-standing commitment to produce the kinds of products that ALL customers want — cars and trucks that are high in quality, dependability, reliability and resale value.
Along with significant roles as leaders and consumers, women are also creating a revolution in the retail automotive business. More and more dealers are finding great success recruiting, training and promoting women managers and sales associates.
Asbury Automotive Group, one the nation's largest dealership companies, is actively recruiting women in malls to come to work at some of their dealerships.
Why? Because there's growing evidence that women are better at selling cars than men.
CNW Research reports that saleswomen are less likely than their male counterparts to ignore women customers or to ask them if their boyfriend or husband is helping them finance a purchase.
In addition, CNW found that nearly 10% of men actually preferred buying a car from a woman while more than 81% had no preference.
Women are extremely good at running dealerships, too. Although just 8% of all U.S. car dealerships are owned by women, those stores average a higher rate of sales than those owned by men.
Asbury Automotive embarked on their recruitment program after seeing the success of women sales representatives at several of its dealerships. A prime example is Kaylene Cohen, the manager of pre-owned Lexus vehicles at Plaza Motors in St. Louis. Eight years ago, she was managing a Gap store, but the dealership hired her and trained her, and she's been successful selling cars ever since.
Then there's my favorite, Elsie MacMillan, who entered the business 35 years ago as a bookkeeper at a New Jersey dealership and worked her way up through the ranks to become General Manager of a Lexus store in 1989. Although she did very well at the Lexus store, she decided it was time to buy a dealership of her own.
Through strong determination and a lot of hard work, Elsie put together a deal with financing help from our Dealer Investment Group to buy a Toyota dealership in Sierra Vista, Arizona, 70 miles southeast of Tucson.
Three years later, the dealership is thriving, and she owns it lock, stock and barrel. In fact, she has increased sales 25% and is building an entirely new, larger facility next door.
In addition to a lot of hard work, including 11-hour days, 6 days a week, Elsie attributes her success to providing supreme customer care. And her customers are not only rewarding her with more sales, but have nominated her for several business awards. Last year, Elsie's dealership won the "Ethics Award" from the Tucson Better Business Bureau, and Inside Tucson Business selected her as one of the top 10 "Women of Influence" in the region.
Oh, and that customer who nominated her for the ethics award? Her name is Melba Vickery. She's 82 years young and bought a used Prius hybrid from the dealership. She loves her car, and just as important, she loved buying it from Elsie, who took time to thank Melba by taking her to lunch to celebrate.
You see, for Elsie a successful day is not so much about ringing the cash register, but about meeting and serving the needs of those who come into her dealership.
As a result of that philosophy, a car sale is not the end, but rather the beginning of a long, fruitful relationship. We couldn't agree more, and we're extremely proud to have her as a Toyota dealer.
Elsie is a great example of how women are increasingly influencing and changing the auto industry for the better.
And in the future more and more women will come into our industry and it will be much better as a result.
Well, we've covered a lot of topics today, from Leonardo da Vinci and wind turbines to Gen Y and mall recruiting. But I think one point is clear: things ARE starting to come together and there is GREAT hope for the future.
This is no time to run scared; it's time to embrace the changes and opportunities presented by globalization, seismic demographic shifts and the empowerment of women.
Our world is definitely transforming, but a new day is dawning and we can choose to make it a positive thing by confidently moving forward.
By doing that...we will not only ensure a brighter future for ourselves, but also for Detroit, the state of Michigan, the United States and our world.
Oh, and I have one more surprise for you....
Because she's an important pioneer in our industry, and a prime example of what's right with the car business today, we've invited Elsie MacMillan here today so you would have a chance to meet her in person.
Ladies and gentlemen, please welcome the leader and dealer principal of Sierra Toyota, Elsie MacMillan.
Elsie, thanks for coming, and please come join me on stage to say hi and answer questions....
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