Management Turnover as Change Agent

Friday, November 2, 2007

Multiple Management Defections From Toyota North America

Liberum Research often monitors multiple management changes at companies. We rely on this technique as one of many methods investors can use as a way to evaluate a firm as a potential investment opportunity (positive or negative) as it relates to management change. Today's International Herald Tribune for example, focused on recent senior executives that have left Toyota's North American division for rivals in the United States.

Toyota, as everyone is aware, has been giving American and its Japanese competitors constant pressure as the firm continues to move to new heights. The major defections could have an impact ultimately on Toyota's North American operations. In the story the writer, Yuri Kageyama states,
In just the last three months, three senior executives in Toyota's North American business abruptly left for rivals. The high-profile defections underline a new danger looming for the Japanese automaker - the lure of U.S. companies wooing the best in its ranks.

The executive exodus signals the overseas growing pains at Toyota Motor. It now sells three-quarters of its vehicles outside Japan and runs more than 50 manufacturing plants abroad, including five vehicle-assembly plants in the United States.
Always keep an eye on multiple management changes at companies, even when those changes are below the top C-level executives. Such changes may be an indicator of something going on at the firm.

1 comment:

fredsmith1967 said...

I agree that it’s important to know who’s on a company’s board. As the NewsVisual article on CIGNA clearly shows, this company has very experienced directors, which helps to explain their positive earnings report. That’s why it’s really important to know who they are.