THE powers that be at Toyota Motor Corporation have for decades been conducting a persistent campaign to close its Sydney-based sales and marketing operation and bring it to Melbourne where it has its head office.
The battle was always never far below the surface and Sydneysiders who worked for Toyota developed over the years finely-tuned ‘relocation alerts’.
For those in Sydney, the idea of moving that brilliant sales and marketing talent pool to Melbourne never made sense, if for no other reason than half the people in the Sydney office would rather leave or take retirement than relocate to Melbourne.
Now that the relocation is imminent it makes even less sense than ever because so many senior Toyota people, including the current chairman Max Yasuda, president Dave Buttner and executive director of sales and marketing Tony Cramb, are leaving. At the very top level something like 150 years of experience is staying in Sydney and leaving the company.
But dig down a little and there are numerous examples of Toyota people not making the move. Think of all the training that is being wasted. Or, more to the point, the talent coming the way of Toyota’s competitors.
This has left many asking what is the point of the move? But first, a little history.
Matt Callachor
You have to be a certain age to remember that Toyota Australia’s operations have always been based in two locations.
Until the 1970s the commercial vehicles and LandCruisers were imported by Thiess Toyota while the cars were built or imported by Australian Motor Industries (AMI) which was a contract assembler based in Port Melbourne.
Thiess had market leadership in the segments of the market in which they travelled and AMI’s car share languished in a distant fourth place which many put down to an over-orderly head office mentality.
For example, back in the day on the car side at AMI, the director of finance was also the director of sales and marketing! So they had the sales and marketing guy, whose job it is to spend as much money as he can get out the the finance guy, and the same guy had a role of giving his sales and marketing persona as little as he could get away with. It was unprecedented.
It was a nice orderly arrangement but that is not how you get to be market leader; that’s how you get to be number four.
So when the two operations were eventually combined under Toyota Australia it made sense to pass the sales and marketing operations over to Sydney because of its superior sales track record.
Dave Buttner
But one observer close to the company has told GoAutoNews Premium that Toyota in Japan never understood the freewheeling sales and marketing culture that resided in the Sydney office. This culture was fundamental to first achieving market leadership in a major Western market and then maintaining it, he said.
“This is a failure to understand that goes all the way back to the Australia desk in Japan where the regional director runs the Australian operations. They have a manufacturing focus and think like sensible farming people who cultivate the business.
“Their manufacturing culture is a very cautious, careful culture. And that is what Toyota does. Toyota has a manufacturing culture and it seemed to them only natural that they should have a head office in Melbourne because Melbourne was so important to the company worldwide.
“People forget that Melbourne was the first manufacturing plant outside Japan which is where Toyota learned how to make cars in a Western car market in terms of dealing with part suppliers and workers and so on.
“So the manufacturing guys were in Melbourne and they are good farmers tending their crops but the sales and marketing guys were in Sydney under crazed cowboys like John Conomos and Bob Miller who were hell bent on becoming market leader almost at any cost.
“So Sydney has always been more freewheeling. Do it first. Be extraordinary. Get attention. Get the advantage in the market. Annoy the hell out of the competition. Paperwork? We’ll do that later.”
Tony Cramb
But today, what is extraordinary is that, having finally succeeded in getting the Sydney operation moved to Melbourne, Toyota is doing this after having closed the Melbourne manufacturing operations.
It begs the question: with the Melbourne manufacturing side closing, why did they not leave the Sydney operation where it is and avoid losing the team which has achieved and maintained market leadership for so many years.
For what, a real estate decision?
The man who has to make this transition work is Matthew Callachor who steps up from vice-president to president and chief executive officer.
Mr Callachor returned from overseas postings to Toyota Australia in May last year to oversee the company’s transition to a national sales, marketing and distribution company, with responsibility for all non-manufacturing divisions. It was an obvious choice as Mr Callachor has for years been groomed for greater things at Toyota.
But not only does Mr Callachor move the operation to Melbourne effectively with both hands tied behind his back, caused by the loss of a century and a half of Toyota knowledge and expertise from his operation, he also has history against him.
Peter McGregor
And that history is the market share of car companies that have quit manufacturing in Australia.
The number – six per cent share – seems to draw in these exiting brands like moths to a flame.
When Nissan closed its Clayton plant in Melbourne it fell from around 12 per cent share to six per cent. Mistubishi which had long been a plus or minus 10 per cent share brand fell to six per cent and Ford, which closed last October, is also now at six per cent.
Astonishingly, Holden, which has yet to close its plant until October this year, has already fallen to 6.8 per cent in March.
It is not just the loss of the locally-made cars from showrooms that sees this decline, there is also a factor that many buyers think the entire brand is pulling out and strike their “leaving brand’s” offerings from their consideration list.
Toyota, of course, commands between 17 and 20 per cent share and it would be ludicrous to suggest it would fall to six per cent.
But, in the nine months transition period before Mr Callachor and his new team take up the reigns in Melbourne in January 2018, he will have to manage the inevitable softening of sales that will take place and somehow ensure that he gives the fresh faces in the newly-assembled sales and marketing team the freedom to continue to be extraordinary in the tradition of the larrikins who created and then maintained market leadership over decades from the Sydney office from which he has worked for most of his career.
An insider said: “Matt has a very big challenge. He has to be able to somehow tap into the Sydney culture and bring it to Melbourne. Where else in the world have you ever seen such a loss of experience in a major company at the one time?
“Have you ever seen a company turn its back on so much talent at the one time for the sake of an office relocation?
“It is a unique situation. There is a lot of newness coming in and that is why there is a new chief executive.
“But if he can pull this off they will need to call in management consultants to write textbooks on how he did it. Because it will be a huge achievement.”
By John Mellor on 6th April 2017 Comment Comment, Move, Toyota
Max Yasuda
THE powers that be at Toyota Motor Corporation have for decades been conducting a persistent campaign to close its Sydney-based sales and marketing operation and bring it to Melbourne where it has its head office.
The battle was always never far below the surface and Sydneysiders who worked for Toyota developed over the years finely-tuned ‘relocation alerts’.
For those in Sydney, the idea of moving that brilliant sales and marketing talent pool to Melbourne never made sense, if for no other reason than half the people in the Sydney office would rather leave or take retirement than relocate to Melbourne.
Now that the relocation is imminent it makes even less sense than ever because so many senior Toyota people, including the current chairman Max Yasuda, president Dave Buttner and executive director of sales and marketing Tony Cramb, are leaving. At the very top level something like 150 years of experience is staying in Sydney and leaving the company.
But dig down a little and there are numerous examples of Toyota people not making the move. Think of all the training that is being wasted. Or, more to the point, the talent coming the way of Toyota’s competitors.
This has left many asking what is the point of the move? But first, a little history.
Matt Callachor
You have to be a certain age to remember that Toyota Australia’s operations have always been based in two locations.
Until the 1970s the commercial vehicles and LandCruisers were imported by Thiess Toyota while the cars were built or imported by Australian Motor Industries (AMI) which was a contract assembler based in Port Melbourne.
Thiess had market leadership in the segments of the market in which they travelled and AMI’s car share languished in a distant fourth place which many put down to an over-orderly head office mentality.
For example, back in the day on the car side at AMI, the director of finance was also the director of sales and marketing! So they had the sales and marketing guy, whose job it is to spend as much money as he can get out the the finance guy, and the same guy had a role of giving his sales and marketing persona as little as he could get away with. It was unprecedented.
It was a nice orderly arrangement but that is not how you get to be market leader; that’s how you get to be number four.
So when the two operations were eventually combined under Toyota Australia it made sense to pass the sales and marketing operations over to Sydney because of its superior sales track record.
Dave Buttner
But one observer close to the company has told GoAutoNews Premium that Toyota in Japan never understood the freewheeling sales and marketing culture that resided in the Sydney office. This culture was fundamental to first achieving market leadership in a major Western market and then maintaining it, he said.
“This is a failure to understand that goes all the way back to the Australia desk in Japan where the regional director runs the Australian operations. They have a manufacturing focus and think like sensible farming people who cultivate the business.
“Their manufacturing culture is a very cautious, careful culture. And that is what Toyota does. Toyota has a manufacturing culture and it seemed to them only natural that they should have a head office in Melbourne because Melbourne was so important to the company worldwide.
“People forget that Melbourne was the first manufacturing plant outside Japan which is where Toyota learned how to make cars in a Western car market in terms of dealing with part suppliers and workers and so on.
“So the manufacturing guys were in Melbourne and they are good farmers tending their crops but the sales and marketing guys were in Sydney under crazed cowboys like John Conomos and Bob Miller who were hell bent on becoming market leader almost at any cost.
“So Sydney has always been more freewheeling. Do it first. Be extraordinary. Get attention. Get the advantage in the market. Annoy the hell out of the competition. Paperwork? We’ll do that later.”
Tony Cramb
But today, what is extraordinary is that, having finally succeeded in getting the Sydney operation moved to Melbourne, Toyota is doing this after having closed the Melbourne manufacturing operations.
It begs the question: with the Melbourne manufacturing side closing, why did they not leave the Sydney operation where it is and avoid losing the team which has achieved and maintained market leadership for so many years.
For what, a real estate decision?
The man who has to make this transition work is Matthew Callachor who steps up from vice-president to president and chief executive officer.
Mr Callachor returned from overseas postings to Toyota Australia in May last year to oversee the company’s transition to a national sales, marketing and distribution company, with responsibility for all non-manufacturing divisions. It was an obvious choice as Mr Callachor has for years been groomed for greater things at Toyota.
But not only does Mr Callachor move the operation to Melbourne effectively with both hands tied behind his back, caused by the loss of a century and a half of Toyota knowledge and expertise from his operation, he also has history against him.
Peter McGregor
And that history is the market share of car companies that have quit manufacturing in Australia.
The number – six per cent share – seems to draw in these exiting brands like moths to a flame.
When Nissan closed its Clayton plant in Melbourne it fell from around 12 per cent share to six per cent. Mistubishi which had long been a plus or minus 10 per cent share brand fell to six per cent and Ford, which closed last October, is also now at six per cent.
Astonishingly, Holden, which has yet to close its plant until October this year, has already fallen to 6.8 per cent in March.
It is not just the loss of the locally-made cars from showrooms that sees this decline, there is also a factor that many buyers think the entire brand is pulling out and strike their “leaving brand’s” offerings from their consideration list.
Toyota, of course, commands between 17 and 20 per cent share and it would be ludicrous to suggest it would fall to six per cent.
But, in the nine months transition period before Mr Callachor and his new team take up the reigns in Melbourne in January 2018, he will have to manage the inevitable softening of sales that will take place and somehow ensure that he gives the fresh faces in the newly-assembled sales and marketing team the freedom to continue to be extraordinary in the tradition of the larrikins who created and then maintained market leadership over decades from the Sydney office from which he has worked for most of his career.
An insider said: “Matt has a very big challenge. He has to be able to somehow tap into the Sydney culture and bring it to Melbourne. Where else in the world have you ever seen such a loss of experience in a major company at the one time?
“Have you ever seen a company turn its back on so much talent at the one time for the sake of an office relocation?
“It is a unique situation. There is a lot of newness coming in and that is why there is a new chief executive.
“But if he can pull this off they will need to call in management consultants to write textbooks on how he did it. Because it will be a huge achievement.”
Comment by John Mellor
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