Monday, Apr. 18, 2005

Katsuaki Watanabe

Katsuaki Watanabe, who takes over as CEO of Toyota in June, faces a huge task. There's no smoldering scandal to extinguish, no battered confidence to restore, no eroding margins to reverse. But that's the problem: Toyota's performance has been so consistently outstanding over the past decade that it's hard to see how Watanabe, 62, can lift the world's most profitable and valuable automaker—and perhaps the world's best company—to new heights.

Under Watanabe's predecessors, Hiroshi Okuda and Fujio Cho, Toyota perfected and refined its spookily efficient assembly-line production system, expanded into more international markets and led the industry in innovation with the introduction of its best-selling hybrid petroleum-electric Prius sedan. Toyota is on pace to overtake troubled General Motors as the world's largest automaker by 2010.

But with increasing competition, rising costs for raw materials and the danger of complacency, Toyota felt it needed a different type of leader. Unlike the brash, straight-talking Okuda or the irresistibly charismatic Cho, Watanabe, who sings in a men's choir, is far more reserved. Since starting at Toyota in 1964, he has distinguished himself not by snipping ribbons on new plants or giving speeches, but as a behind-the-scenes cost cutter and logistical mastermind. Those are the skills Toyota needs if it is to expand its operations when other automakers are cutting back.

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