Extreme Toyota: Radical Contradictions That Drive Success at the World's Best Manufacturer

6.1. Tomorrow Will Be Better than Today

The shared belief at Toyota that tomorrow will be better than today grows out of institutional memory from the difficult experience of entering the international automobile market about 50 years behind the dominant American producers and almost 100 years behind the established European manufacturers. Though it seems unimaginable today, in 1950 Toyota was facing oblivion because of a shortage of cash. In the early 1960s, it was having difficulty penetrating the European market because dealers there were unwilling to handle the unknown Toyota brand. Such hardship shaped the view that any obstacle could be overcome, starting with those at home.

After Toyota's founding in 1937, it weathered the storm of World War II and the severe economic conditions that followed, then the crippling labor dispute of 1950 that forced it to close its factories for two full months. The company almost went bankrupt. It laid off 1,500 employees, 25 percent of its workforce. To show their remorse, the entire management team, including President Kiichiro Toyoda, resigned. Akio Matsubara, Senior Managing Director in charge of Human Resource Management, said these early hardships shaped the company's core values and corporate identity:

At that time we really had no financing and money was extremely tight. We were so strapped for cash that we became obsessed with eliminating waste and accelerating return on investment so we could immediately reinvest back into the business. ...