The executive who steered Toyota's North American headquarters move from California to Plano is retiring next year to cap off a 38-year career in the auto industry.
CEO Jim Lentz, 64, will step aside April 1 and will be replaced by the chief operating officer, Tetsuo "Ted" Ogawa, Toyota announced Wednesday.
"After finalizing our One Toyota consolidation and laying the groundwork for the future of mobility, now is the time for a new leadership team to take the next steps to help further transform Toyota," Lentz said in a statement.
Lentz oversaw a substantial number of changes in his 38 years at Toyota, becoming the most powerful North American CEO the Japanese automaker has seen. He started his career with Toyota in 1982 and worked his way up through the company's sales and marketing division.
He led the company as it launched its innovative Scion brand, traversed one of the worst recessions in U.S. history and restructured Toyota's North American operations. Well regarded in business circles, Lentz recently joined the board of directors of the Texas Economic Development Corp., a business attraction organization.
Lentz is well known for his February 2010 testimony before a congressional committee investigating complaints about Toyota vehicles accelerating without warning. He was candid, saying recalls of some 8.5 million vehicles worldwide and more than 6 million in the U.S. may not solve the problems.
He said at the time that an electronic cause could not be ruled out, although Toyota and U.S. government agencies did make controversial determinations later that the problem was caused by sticky gas pedals and floor mats pushing on the accelerator, not electronics. Toyota was fined $50 million for being too slow to report safety problems to U.S. regulators.
Lentz, often described as a mild-mannered executive who led with a low-profile authority, made the decision in 2014 to consolidate Toyota's North American operations onto one campus and move its headquarters from Torrence, Calif., to Plano. More than 4,000 employees now work at the 2 million-square-foot complex that opened in 2017. It brought the company's automotive, finance and technology businesses into one location.
"Jim Lentz has had an incredible impact on our company. He has been an outstanding leader and was instrumental in restructuring the company and bringing together our North American region," Ogawa said in a statement. "He deserves a lot of credit for all he has accomplished in his many roles around the globe and he will be greatly missed."
Ogawa joined Toyota in 1984 and has held various top positions, including executive vice president and chief administrative officer in North America, and deputy chief executive officer in its China Region and president of its Chinese investment company. He'll focus on further transforming Toyota into a mobility company.
The company's Toyota Connected division is experimenting with ways to use the real-time data of car technology to improve the in-car experience for drivers. The company also is invested in autonomous driving technologies and alternative forms of moving people around cities and highways.
Lentz's retirement makes sense to Jeffrey Liker, professor emeritus at the University of Michigan and author of The Toyota Way.
"Toyota has tended to encourage their leaders to leave at around 65 and they feel there's a benefit to having turnover of leaders," Liker said.
But the professor who wrote the book on Toyota's managerial culture considered it a little curious that Lentz wouldn't be replaced with an American.
"Frankly, the reason that typically would happen is if they didn't have somebody waiting in the wings who they felt was ready and who was American," said Liker, who noted that Lentz was the first American trusted with a nearly autonomous CEO role over North American operations by the risk-averse Japanese leadership.
His background in the U.S. was something leadership overseas valued, Liker said.
After becoming chief executive of the North American region in 2015, Lentz made a bold decision to combine Toyota's siloed U.S. manufacturing, sales and finance operations. Two years later, more than 2,800 employees made the move from California to a new corporate campus in Plano.
He called the move "One Toyota" and said it got all of North America on the same page, improving the speed of decision-making to handle fast-paced industry changes. The move will likely be Lentz's legacy with the company, considering the importance of North American sales to Toyota. In the first half of 2019, North American sales outpaced Toyota's sales in any other region.
"I think he's one of the most unassuming CEOs I've ever met," said Plano Mayor Harry LaRosiliere. He recalled Lentz's commitment to moving no less than 75% of the company's workers to Plano.
"I remember Jim said, 'My goal is 75%,' and wouldn't you know it, they got 75%," LaRosiliere said. "He was determined to make the move a good move for the company in all the right ways."
Lentz said he has positioned Toyota in the U.S. to handle the shift away from cars to trucks and SUVs, as well as a pending shift to electric, hybrid or hydrogen fuel cell propulsion systems. Toyota also is developing its own autonomous vehicles. Lentz said the move to autonomous or electric vehicles will take a long time, and even if he stayed longer, he wouldn't be around long enough to see the company through the changes.
Toyota operates 14 manufacturing plants in North America, employing more than 47,000 people. Its 1,800 North American dealerships sold 2.8 million cars and trucks in 2018.
Under Lentz's direction, Toyota also has quickly made a sizable impact in North Texas. Employees were encouraged early on to join the boards of non-profits and lend their expertise to community organizations in the region. Its engineers regularly volunteer to work on solving community problems, such as helping Parkland Hospital in Dallas improve wait times in its emergency room.
Before it even relocated, the automaker donated more than $2 million to the Plano Independent School District, Dallas Area Rapid Transit and other organizations in a two-year span.
Toyota's culture emphasizes that its purpose as a company is to contribute to society, Liker said.
"And that starts at the top," he said.
The Associated Press contributed to this report.
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