Responsibility to the Stakeholders of the Toyota …...Toyota Industries considers measures to...

Financial Institutions27.0%

Private Investors10.7%

Breakdown of Shareholders

OperatingCompanies42.3%

Foreign Companies19.8%

Securities Companies0.2%

Total325,840,640

shares

Breakdown of Sales by Customer (Consolidated)

Sales¥1,241.5

billion

Toyota Motor Corporation33.4%

Other58.1%

DENSO Corporation8.5%

Provide products and services thatsatisfy our customers’ needs

•••

••

•

•

Improve product quality

Offer better sales and services

Reflect customer needs in productdevelopment proactively

Promote communication with customers

Disclose product information honestlyand properly

Protect customers’ confidentialinformation and personal data

Improve quality throughout the supplychain

Reduce the amount of substances ofconcern used

Reduce the environmental impactsassociated with product use

Disclose environmental data honestlyand properly

Distribute returns to shareholders

Develop businesses proactively

Disclose information that is complete,accurate and in a timely manner

Improve ranking and evaluationsmade by outside organizations

Promote investor relations

Boost corporate value and enhancecommunication with shareholders

Realize compatibility betweenenvironmental conservation andprofit generation

Consider the environment inproduct and service development

GlobalEnvironment

•

•

•

•

•

•

Prevent environmental accidents, etc.

Improve environmental ranking andevaluations by outside organizations

Disclose environmental data honestlyand properly

Developing Our Business Operations while Remaining Conscious of Our Responsibilities

Management Our Customers Our Shareholders

•

•

•

•

•

Page 20~24

FY 2005 FY 2005

Responsibility to the Stakeholders of the Toyota Industries Group

Social & Environmental Report 200518

Str

engt

hen

corp

orat

e go

vern

ance

and

enh

ance

com

plia

nce

Page 46~65

Page 25~28 Page 29~31

TotalApproximately

1,500Companies

Percentage of Suppliers Subject tothe Subcontract Act (Non-consolidated)

Other46.7%

CompaniesSubject to theSubcontract Act53.3%

Social Contribution Activities

Construct cooperative relationshipsbased on mutual trust andprosperous co-existence

•

•

•

•

Consider the environment inprocurement processes

Promote environmental conservationand environmental education in localcommunities

Raise employee awareness aboutthe environment and promote theirinvolvement in environmental activities

Ensure symbiosis with communities

•••

•••••

Ensure a workplace where eachemployee can work safely andenthusiastically

••

•

•

•

•

••

Control hazardous substancescontained in procured raw materialsand parts

Support environmental conservationactivities

•

•

Support nature protection activitiesand environmental conservationactivities in local communitiesPrevent atmospheric, water and soilpollutionRespect biodiversityPrevent environmental accidents, etc.Promote environmental education andawareness raising among localresidentsDisclose environmental data honestlyand properly

•

•

•••

•

Promote job performance thatconsiders the environment

Implement environmental educationand awareness-raising activities

Support voluntary actions ofemployees to conserve theenvironment

•

•

•

Number of Employees (Consolidated)

3 5 6

272531

(thousands)

2003 2004 2005 (FY)0

40

30

20

10

(A related article can be found on page 34)

Community Activities12%

Environment 2%

Sports2%

Others13%

International Exchange/Cooperation39%

Social Welfare5%

Culture/Art2%

Support to Disaster-Stricken Areas20%

Number of employeesNumber of temporary employees

Our Business Partners(Suppliers)

Our Local Communities Our Employees

Procure supplies through open andfair processes

Comply with laws and regulations tofacilitate fair trade

Take care of and support businesspartners

Promote close communication withbusiness partners

Promote and support:

Traffic safety

Youth development

Conservation of historic sites andtraditional culture

Arts and culture

Social welfare activities

Health and medical science

Aid to disaster areas

International exchanges

Respect human rightsMaintain employee-managementrelations based on mutual trustProvide secure employmentopportunitiesRespect diversification and promoteequal opportunitiesFacilitate human resourcedevelopment and create a motivatingwork climateSupport employees in balancingtheir family and work commitmentsImprove occupational health and safetySupport employee health management

FY 2005

FY 2005

Social & Environmental Report 2005 19

Education/Social Education5%

Page 32~33 Page 34~39 Page 40~45


Maintaining and Enhancing Efficient Management and the Fairness and Transparency of Corporate ActivitiesToyota Industries believes that enhancing the long-term stability of corporate value and maintaining society's confidence in the company are extremely important management issues. Taking the enrichment of society through business activities as a basic premise, we therefore consider it vital to build good relationships with stakeholders ranging from shareholders and customers to business partners, local communities and employees.

With this in mind, we are working to maintain and enhance management efficiency and the fairness and transparency of company activities by strengthening corporate governance. We are building a corporate governance system that can respond quickly and flexibly to changes in the business environment, as well as working to strengthen management supervision and to provide timely disclosure of accurate information (to shareholders and other stakeholders).

Towards Accurate, Speedy and Efficient ManagementToyota Industries holds Board of Directors meetings every month to make decisions on important management matters and monitor business operations. The company has adopted a division system and set up a Business Operation Committee to enable the President to oversee business operations through General Managers (Directors) of each division. A Management Committee has also been established to discuss important matters such as

Toyota Industries Recognizes that Strengthening Systems for Winning Society’s Trust Is an Extremely Important Management Issue

Corporate Governance

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

corporate vision, management policies, medium-term business strategies and major investments. It consists of directors above the Executive Vice President level. When the President considers it necessary, other relevant directors also attend meetings. The company is striving to increase the efficiency and speed of management as well as facilitate appropriate judgment.

Members of the Respective Committees and Meeting Frequency•Board of Directors: Thirty Directors (including one outside Director) participate in monthly meetings. •Business Operation Committee: The President and divisional General Managers participate in two regular meetings, before the interim and annual closing of accounts while irregular meetings are also held as required.•Management Committee: Meetings are held whenever important matters arise, and are attended by the President, Directors above the Executive Vice President level and other relevant directors and managers, as specified by the President and according to the matters in question.

Corporate Auditor’s Office: Corporate Auditors Working to Strengthen Monitoring FunctionsToyota Industries has chosen to maintain a Corporate Auditor/Board of Corporate Auditors system. The Board of Corporate Auditors consists of five corporate auditors, with three outside corporate auditors and monthly meetings. The board discusses and determines accounting matters, auditing policy and the audit of company reports. At Toyota Industries Corporation, the Corporate Auditor’s Office, staffed by five specialist personnel,

Table 1

Chart 1


��

��

��

��

��

��

��

��

Toyota Industries considers measures to restore production in the wake of a disaster to be an important issue from the viewpoint of fulfilling its responsibility to ensure stable product supplies. In January 2004, the company revised its “Earthquake Response Manual” on the hypothesis that an earthquake occurred in the Tokai region (the area of Japan where our operations are focused). We are endeavoring to ensure that all employees are well-versed in response activities designed to minimize the impact of such an earthquake, in areas such as confirming the safety of employees, gathering information on the disaster, recovery responses and support for affiliates and suppliers affected by the disaster.

Case Study Preparing for the Occurrence of an Earthquake in the Tokai Region

Timing of meetings:Submission of financial statements (June and December) Submission of preliminary financial results (April, July, October and January)As required in the event that other important matters are determined or arise.

��

��

��

��

��

��

��

��

��

��

��

��

has been set up to facilitate the proper execution of the corporate auditors’ duties. To carry out audits efficiently, the corporate auditors cooperate with the Audit Office, which is in charge of internal audits (please refer to the section on “Compliance” for details), and external auditors, receiving reports as appropriate and, where necessary, conducting additional surveys.

Set up Committees to Address Important Company-Wide MattersIn order to deal with compliance – both legal and corporate ethics – and environmental conservation as key company-wide issues, Toyota Industries has established the Corporate Code of Conduct Council, the Environmental Committee, the Export Transaction Control Committee and the Stock Option Committee to discuss and monitor the state of management and corporate activities. Further steps to strengthen this framework were taken in April 2005 with the set up of the Compliance Subcommittee, the Crisis Response Subcommittee, the Data Security Subcommittee and the Regional Society Contribution Subcommittee under the aegis of the Code of Conduct Council.

Risk ManagementBased on a collection of risk case studies, comprising examples of conceivable risks that could affect the company, together with their countermeasures, each division and department has adopted strict measures to prevent risk from materializing. In addition, risk with the potential to affect business operations is reevaluated and reviewed on a regular basis, and disclosed in financial statements. The Audit Office endeavors to reduce risk by monitoring business processes, enforcing compliance and strengthening control systems to ensure the reliability of financial information. Based on the company’s “Crisis Response Manual”, countermeasure organizations and procedures have been established to deal with issues or incidents that might arise, while each division and department has set up recovery systems.

The business and other risks disclosed in the financial report for the year ended March 31, 2005 relate to the following issues: Principal customers/Product development/Intellectual property rights/Product defect/Price competition/Reliance on suppliers of raw materials and components/Environmental regulations/Alliances with other companies/Exchange rate fluctuations/Share price fluctuations/Effects of disasters, power blackouts and other incidents/Latent risks associated with international activities/Retirement benefit liabilities.

Enhancing Management TransparencyTo enhance management transparency, Toyota Industries is working to strengthen its accountability by publishing quarterly financial statements and establishing an Investor Relations Office to provide information to shareholders and investors. In 2005, it also set up an Information Disclosure Committee to ensure the completeness, appropriateness and timeliness of important information disclosed in financial statements and other materials.

Chart 2

Chart 1


Obeying Laws and Regulations Is Our Minimum ObligationRespecting Local Cultures and Customs

Compliance

��

��

��

��

��

��

��

��

��

��

��

��

��

Toyota Industries perceive compliance as obeying laws and regulations in addition to respecting local culture and customs in a manner that is in tune with the changing times.The Corporate Code of Conduct Council plays a central role in strengthening the company’s systems and mechanisms, stipulating conduct guidelines and making every effort to ensure that all employees are informed through education and enlightenment activities. Toyota Industries is also tackling the issue of strengthening compliance systems at domestic and overseas affiliates and suppliers. The Corporate Code of Conduct Council is in charge of controlling the group’s overall corporate activities regarding compliance and responses to crisis. Consisting of directors above the rank of Managing Director, including the Chairman, Vice-Chairmen and President, as well as General Managers of Divisions and Corporate Auditors, the Committee meets once at the end of each fiscal year. After confirming the status of any important incidents that may have occurred, together with the countermeasures and responses adopted, they draw on these outcomes in deliberating the matters to be dealt with in the coming fiscal year. Under the aegis of the Corporate Code of Conduct, the company designated a number of departments as legal compliance departments to provide thorough instructions to other divisions and departments on legal compliance, while the company as a whole is currently undertaking further efforts to strengthen our compliance system. In April 2005, the company also established the Compliance Subcommittee and the Data Security Subcommittee . These Subcommittees are comprised of a Chairman and Vice-Chairman who are nominated from among directors and members of relevant divisions and departments, and meets each month to consider concrete measures aimed at boosting compliance based on individual action plans. The Audit Office and designated legal compliance departments cooperate in supervising compliance in individual divisions, departments and affiliates at home and overseas. The designated legal compliance departments are also responsible for company-wide employee education programs centering on individual positions and specialties. The company also carries out various educational activities to enhance employee awareness.

Corporate Code of Conduct Council Leads the Way in Enforcing Compliance

To ensure thorough compliance throughout the company and among all employees, Toyota Industries compiled concrete conduct guidelines into the “Handbook for Corporate and Employee Conduct” (first edition 1988), and requires all employees to observe ethical and sensible behavior. The handbook declares that the company and all employees must, as a matter of course, be law-abiding, and clearly describes what is considered acceptable and unacceptable behavior from the viewpoint of corporate ethics. These

Conduct Guidelines: “Handbook for Corporate and Employee Conduct”

To ensure thorough compliance with the spirit and the letter of the law, ten departments in our headquarters, including the Legal Department serve as designated legal compliance departments that work to ensure compliance with relevant laws and regulations throughout the company. The individual departments draw up activity plans each fiscal year and maintain their familiarity with new legislation and revisions of laws and regulations; consider responses to revisions of existing mechanisms; streamline rules and manuals; ensure that the entire company is well-informed through in-house education programs; and confirm and direct compliance in related departments through compliance audits. The Corporate Code of Conduct Council monitors these activities and, where necessary, puts forward proposals for reinforcing them.

Designated Legal Compliance Departments Enforcing Compliance with Laws and Regulations

conduct guidelines are the basis of our group corporate activities and are further spread through ongoing education and training. In order to facilitate better responses to globalization and other changes affecting the business, the Compliance Subcommittee is currently considering a review of these conduct guidelines.

Table 1


��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

In June 2004, the Legal Department ran a lecture regarding EU competition law for the overseas sales department of the materials handling equipment business that is engaged in business in the EU. Following an overview of changes to the law, the main points of individual regulations and cases, participants were able to deepen their understanding through a Q&A session. The participants in the seminar later passed on what they had studied in order to promote common awareness among staff in the department.

Case Study EU Competition Law Education

A “report criteria” scheme has been set up to facilitate rapid understanding of the situation and appropriate responses in cases where serious problems and incidents that may be in breach of compliance rules occur. The scheme establishes a mechanism whereby reports are submitted immediately to top management on the responsibility of directors in charge of head office divisions and departments. Reporting criteria provide concrete standards for judgments regarding whether reports are necessary or not, and are linked with the problem-solving rules and manuals of each department.

Towards Timely Information Gathering and Rapid Responses “Report Criteria” Established to Speed up Identification of Serious Problems and Incidents

Toyota Industries has set up a Corporate Ethics Consultation Desk staffed by an outside attorney to provide employees with consultation services pertaining to compliance. As every consideration has been given to protecting privacy and preserving confidentiality, any employee may approach the consultants in full confidence that their interests are not jeopardized in any way. Various other consultation desks have been set up to create a system that offers appropriate responses to the opinions and requests of customers and local residents, and to the troubles and questions raised by employees and their families.

Consultation Desks Set up to Deal with Corporate Ethics Matters and Similar Issues

To ensure full compliance, it is important that all managers and employees have a correct awareness of what compliance means and are constantly aware of its implications. Compliance education and lectures primarily take the form of company-wide education and on-the-job-training in the workplace, comprising rank-based programs for new employees and newly appointed managers, and specialty-based lectures on matters relating to the law, health and safety, and intellectual property. “Manager Training” is also provided to ensure that managers are fully advised, while “Manager Meetings” as well as workplace meetings ensure that these personnel are well-informed. Intranets are used for educational activities and passing on information, while management regularly stresses the importance of compliance to foster an atmosphere of compliance awareness.

Instilling Compliance Consciousness in Each Manager and Employee

Table 2

Table 3

Table 4


��

��

��

��

��

��

��

Environmental ComplianceLaws and regulations concerning the environment range widely and tend to become stricter each year as environmental problems become more serious. They include: laws concerning environmental pollution and other regulations pertaining to regional environments; the Law Concerning the Rational Use of Energy, the Global Warming Prevention Law and other regulations pertaining to the

Strengthening Protection and Management of Information through Rigorous Data Security MeasuresToyota Industries’ basic policy is to rigorously enforce data security so as to ensure that vital management resources in the form of corporate information and IT systems (information assets) can be used efficiently in operations while protecting them from internal and external threats. The company has been moving ahead with strict management of confidential information since it drew up its “Security Control Rule” in 1987. As the IT and network society evolved, it has been tackling the questions of security controls and protection of information assets, issuing its “Information Security Manual” in 2002. In April 2005, the Corporate Code of Conduct Council took steps to strengthen its information asset protection and management further by establishing a Data Security Subcommittee. This subcommittee is striving to ensure control of confidential information from four perspectives: “Organizational Confidentiality Management” to establish the persons in charge of divisions and departments; “Personal Confidentiality Management” for educational activities; “Physical Confidentiality Management” to establish zoning regulations; and “Technological Confidentiality Management” for systems control.

Response to Personal Data ProtectionFrom FY 2005, the Legal Department initiated an in-house education program for matters pertaining to personal information protection in response to the enforcement from April 2005 of Japan’s Personal Information Protection Law. It also worked to disseminate information on the purpose and overview of the law and corresponding matters throughout the company via our intranet and workplace meetings. It also strove to make controls more rigorous by revising the Security Control Rule to incorporate the handling of personal information and the concept of zoning regulations.

Toyota Industries carries out compliance audits of all its domestic affiliates - some 40 companies in total - including non-manufacturing affiliates such as TOYOTA Material Handling Company, on a three-to-five-year cycle, depending on the scale of their sales activities. We have also set up a compliance auditing framework for our overseas affiliates, separated into three regions – North America, Europe and Australia/Asia. Since FY 2004, Toyota Industries North America, Inc. (a holding company in the U.S.) and the Audit Office have carried out compliance audits of operations in three-year cycles in North America and the Australia/Asian region respectively. Studies are underway with regard to performance of compliance audits in Europe. The results of compliance audits are communicated to the affiliates’ President and management, as well as to the General Managers of the responsible division. Both cooperate in making improvements to relevant activities, and the Audit Office confirms the status and results at appropriate times.

Monitoring Compliance at Affiliated Companies

global environment; as well as exhaust gas emission controls, the Automobile Recycling Law and the EU End-of-life Vehicle Directive and other product-related regulations. Based on ISO14001, Toyota Industries is working to identify trends in related laws and regulations, evaluate our level of compliance, and prepare responses for emergencies. Furthermore, in order to minimize the environmental impact of our operations as much as possible, it is not sufficient to simply adhere to legal and regulatory standards with regard to air and water pollution. We are also endeavoring to establish autonomous standards that are even more rigorous than local laws and regulations to ensure we fulfill our environmental responsibilities. Looking ahead, Toyota Industries will continue to deal proactively with revisions to relevant laws and regulations, such as the Law Concerning the Rational Use of Energy, which has come into effect as a result of ratification of the Kyoto Protocol.

The Compliance Monitoring SystemThe Audit Office, under the direct jurisdiction of the President, takes the lead in monitoring compliance and cooperates with the performance of internal compliance audits carried out by designated legal compliance departments. Toyota Industries believes it is necessary to strengthen the system on an ongoing basis as internal compliance audits are playing an even greater role in compliance activities as the business expands and globalizes. Toyota Industries monitors all its business operations, including compliance, at all company departments as well as domestic and overseas affiliates in the North American and Australian/Asian regions. As far as overseas affiliates are concerned, the company has strengthened its system by delegating auditing functions to the holding company in the North American region, and has expanded the scope of its monitoring activities. Toyota Industries is also currently looking into setting up an auditing framework for the European region. With regard to business partners, meanwhile, the Purchasing Department carries out compliance checks of Hoeikai, Toyota Industries suppliers’ association, with special emphasis on safety and environment.

Obeying Laws and Regulations Is Our Minimum ObligationRespecting Local Cultures and Customs

Compliance

Table 5


Toyota Industries’ founder Sakichi Toyoda once said that “A product should never be sold until it has been carefully manufactured and tested thoroughly and satisfactorily”. Adhering faithfully to his teachings, Toyota Industries believes quality is our lifeline and a key management issue. Maintaining and enhancing quality is our most important responsibility to our customers, and forms the basis of our social responsibilities.

Maintaining and Enhancing Quality Is Our Most Important Responsibility to the Customer

Quality Is the Lifeline of Toyota Industries

��

��

��

��

��

��

��

��

��

��

Quality Is a Key Management Issue

Toyota Industries’ Approach to QualityAll Toyota Industries employees are engaged in comprehensive corporate activities aimed at maintaining and enhancing “quality” in its broadest sense. The basis of our activities is “product quality”, as embodied in product durability, reliability, safety and eco-friendliness, but we also adhere to “marketing quality”, in sales and service, and “total quality,” in corporate image and brand. The following diagram depicts this approach. We believe that it is an important responsibility of all employees to participate in creating levels of “quality” that meet the expectations of our customers.

Providing Even Better ProductsDevelop and provide products from the customer’s viewpoint. This summarizes Toyota Industries’ comprehensive “market-in” approach. In manufacturing, Toyota Industries devotes enormous efforts to research and development of new functions and other features, endeavoring to develop products that are always ahead of the times. It also uses a design reviews (DR) system to evaluate product planning based on customer needs and to ensure product reliability and post-sales customer satisfaction. In the area of sales and service, everything possible is done to ensure that at all times, customers can use our products in excellent condition and free of material defects. Distributors and dealers work together to optimize their response to customers while Toyota Industries has established customer consultation desks that enable it to interface with customers directly. The company also carries out questionnaires in relation to products and visits customers to conduct fact-finding surveys of actual usage. As a result of these activities, we are able to provide even better products that meet our customers’ expectations.

Working to Improve “Marketing Quality”To ensure that customers can use our products with confidence at all times, it is very important to maintain and improve “marketing quality” by strengthening the capabilities of distributors and dealers that directly respond to customers. The company actively provides dealers in Japan and overseas distributors with support in reinforcing management practices, developing staff and securing the next generation of human resources. In addition to dealers in Japan, Toyota Industries has also established distributors overseas to strengthen dealerships in key regions such as North America, Europe, Australia and Asia.

Responsibility to Our Customers

Chart 1

BT Industries manufactures and sells warehouse trucks and other equipment. Since 2000, the Product Support Department of BT Europe, European operational business of BT Industries, has conducted annual satisfaction surveys of BT Europe’s dealerships to ascertain whether they believe sales support and product information from the head office are adequate. By the time of the 2005 survey, the nine questions included in the first survey conducted in 2000 had increased to 60 questions in 17 areas, including support for marketing and sales, and service training. Dealers were asked to rate each item according to one of four rankings. The results of these surveys are sent to individual dealers and are also reflected in BT Europe’s action plan and announced at a meeting with dealers held every October.

Case Study Dealer Survey of Satisfaction Levels—BT Europe [Sweden]


��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

�

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

�

�

��

��

reaches the quality assurance department of each division, it is fed back to the responsible department (such as design and manufacturing) and countermeasures are quickly developed. At the same time, the DR system is reviewed to prevent a recurrence in subsequent models. While everything is done in the production process to prevent defective products proceeding to the next stage of the production process or leaving the factory, we also proactively tackle quality improvements on five levels, including cleanliness and neatness. All businesses have taken a positive approach to ensure they comply with requirements of ISO9001 and TS16949 (an ISO technical specification for the automotive industry), which are international standards for quality management systems. In particular, Toyota Industries’ vehicle division has achieved ISO9001 certification and is now engaged in independent efforts aimed at establishing even higher quality assurance levels. It is also encouraging its main affiliates in Japan and overseas to achieve certification.

In all processes, predetermined procedures must be carried out according to instructions to ensure no defective items proceed to the next stage. This is vital for ensuring that the company only manufactures high quality products. Adopting a “market-in” approach, Toyota Industries’ business divisions develop new products based on customer needs. As mentioned above, the integrity of the overall system is assured through a design review (DR) system to assess quality, whereby general managers of divisions inspect every step of the production process, from product planning and design to production preparations, production, initial quality and customer satisfaction levels. This ensures that no product progresses to the next stage of the production process unless established target levels have been achieved. Once new products are launched and important customer information

System of Quality Assurance and Quality ControlDay-To-Day Control


Chart 2


As a company that supplies products to the global market, the reliability in quality levels is synonymous with the Toyota Industries brand, and is considered to be a precious element of our corporate value that must be preserved. We therefore aim to implement quality assurance activities that cover our entire global supply chain, including affiliates and business partners in Japan and overseas.

Quality Assurance of Supply Chain throughout the World

In cases where serious quality issues arises, such as “accidents due to quality that result in personal injury, or property damage”, the Quality Assurance Department of the responsible division must, in accordance with our Rules for Dealing with Critical Quality Issues, minimize trouble to customers by promptly devising countermeasures, while at the same time report the issue to the Global Quality Control Department at the Corporate Center using the “Critical Quality Issues Notification Form”. The details on the form are then reported to the President through the Director responsible for quality. This mechanism is also incorporated into our internal reporting system used for collecting information pertaining to compliance, and functions in conjunction with that system. For critical quality issues that require recalls, the company is considering setting up Recall Preparation Conferences within divisions to devise countermeasures. After the Global Quality Control Department reports to the President via the Director responsible for quality, the President submits an application form to the relevant regulatory authority if required. The company also informs customers by direct mail, and carries out repairs and other measures free of charge as soon as possible. After confirming the actual progress of the recall, the President then submits a recall report and an implementation report to the relevant regulatory authority. The Audit Office at the Corporate Center also monitors whether these integrated mechanisms for dealing with market quality issues are functioning properly.

Dealing with Critical Quality Issues

��

��

��

��

��

��

��

��

��

��

Initiatives during FY 2005 and Future Policies

The slogan adopted for the FY 2005 Quality Guidelines was “Customer First” with the established aim of achieving “Zero Defects”. The company adopted two approaches based on these Guidelines – “Build quality into the original stages of design and production engineering”, and “Build quality into processes at individual manufacturing stages”. Under the “Build quality into the original stages of design and production engineering” approach, the company used FMEA* for activities at the new product design stage to prevent the recurrence of problems that had arisen in the past, and problems that could be expected to occur from past experience. The company is now deploying this production technology methodology and is looking to adopt FMEA for the production planning stage. Under the “Build quality into processes at individual manufacturing stages” approach, the company is working to increase the quality assurance levels of individual processes through measures to deal with problem origins and prevent the emergence of defective items. As a result of these endeavors, claims arising in connection with newly launched products have fallen substantially. Toyota Industries will continue to utilize these measures to strengthen its quality assurance efforts. In addition to reinforcing the guidelines adopted in FY 2005 – “Customer First” and “Zero Defects” – the FY 2006 Quality Guidelines call for the “Creation of a Workplace that Continually Pursues Quality-first”. In doing so we must focus on fundamental quality principles and aspire to achieve higher quality awareness throughout the organization and among our personnel.

Focus on Preventing Product Defects

The Global Quality Control Department at Toyota Industries’ Corporate Center periodically audits the quality assurance departments of divisions, and collects information relating to the critical quality issues referred to above, and reports the results to the President. Bearing these results in mind, once a year the President issues the President’s Guidelines (Quality Guidelines) to the entire company. The President himself confirms the implementation of the Guidelines through two special shop quality inspections held at all plants each year, and reflects the results in the President’s Guidelines for the coming fiscal year.

Quality Guidelines

Realizing the Creation of a Workplace that Continually Pursues Quality-FirstThe new slogan added for the FY 2006 Quality Guidelines – Creation of a Workplace that Continually Pursues Quality-first – is intended to encourage all employees involved in manufacturing to insist on rigorous quality standards established from the viewpoint of the customer. This approach is essential for ensuring quality and developing human resources at overseas production sites at a time when overseas production is expanding.

Table 1

* FMEA (Failure Mode and Effect Analysis)



In March 2005, quality managers from nine production centers belonging to TOYOTA Material Handling Company and the BT Industries Group gathered at Toyota Industrial Equipment Manufacturing (TIEM) in the U.S. for the Third Joint Quality Control Meeting (JQCM). In addition to evaluating quality by means of benchmarks shared by Toyota Industries and the BT Industries Group as a means of ascertaining the actual quality situation vis-à-vis achieving targets at each center, participants confirmed that they would promote quality enhancement through mutual exchanges. Going forward plans call for these meetings to be held at different venues three times a year.

Third Joint Quality Control Meeting (JQCM) Held in the United States (Materials Handling Equipment Business)

JQCM

Achieving Higher Quality throughout the Supply ChainIn FY 2005, the headquarters Global Quality Control Department played a central role in identifying the inspection situation (market claims, etc.) at subsidiaries in Japan and abroad. It also followed up on the quality guidelines of key individual business partners in Japan. Additionally, Toyota Industries jointly held a quality meeting with the BT Industries Group (see Topics below), and was involved in on-the-spot surveys of QC circle activities at two affiliates in North America and in providing support measures. It has also conducted two-day internal/external education programs on quality on seven occasions to date. Quality training has been conducted for 450 employees responsible for quality education at internal production departments, quality managers at domestic affiliates and management and quality managers of business partners.

Raising quality awareness among workers is also indispensable as facilities become more sophisticated and the number of temporary workers is increasing, especially in terms of building in quality at production sites. Toyota Industries is striving to enhance quality even further by developing systems and strong human resources that can respond to changes in the various environmental conditions facing manufacturing, such as utilizing QC circles in which all employees participate.


Toyota L&F Keiji Co., Ltd. is involved in the sale and service of industrial vehicles. In FY 2002, it initiated “Responsive Sales”

Case Study The “Proposals for Customer” System—Toyota L&F Keiji [Japan]

activities to provide proposals to its customers as a logistics partner in an effort to raise customer satisfaction levels and trust in their products and services. From FY 2003, it strengthened these activities under the “Proposals for Customer” system. All sales staff prepare two proposal letters for customers each month. In order to be able to draw up optimal proposals for each customer, the company have sharpened their interview, fact-finding and observation techniques and are preparing “Optimal Product Selection Sheets” and “Collections of Excellent Case Studies”. In FY 2005, Toyota industries launched an information system to simplify the preparation of proposal documents and increased the target number of proposal letters from two to four. In addition to introducing examples of excellence via the Intranet, each sales branch office holds monthly “Sales Study Meetings” to exchange know-how and information. Toyota Industries holds company-wide presentations of proposal examples once a year with a view to boosting the capabilities of individual sales staff.

Raymond Corporation of the BT Industries Group offers end user customers the opportunity to contact Raymond without first contacting their Raymond Dealer in order to enhance customer satisfaction levels. This process facilitates direct identification of customer awareness of the Raymond brand, dealers and products, instead of through its dealers. Raymond also conduct surveys after new products have been launched, as well as every six months. Raymond shares and resolves issues with its dealers. It also deploys personnel to customer hotlines where it can listen directly to the opinions and requests from customers. Raymond is involved in dealer evaluations, and provided measures for DOD (Dealers of Distinction) and DOM (Dealers of Merit) in 2004.

Case Study “Direct Contact with Customer”—Raymond Corporation [U.S.A.]



Returning Profits to ShareholdersToyota Industries sees the return of profits to shareholders as an important management policy, and seeks to enhance corporate value by pursuing proactive business development while working to expand and strengthen its business structure. Based on this policy, we try to meet shareholder expectations by focusing on consolidated dividend payout ratios while giving due consideration to performance and funding demand. The full-year dividend was ¥32 per share in FY 2005, compared with ¥24 in FY 2004. The dividend payout ratio has continued to rise in the past three years, reaching 39.1% in FY 2005, a 3.6 percentage point increase over the previous fiscal year. The consolidated dividend payout ratio was 23.7%, 1.5 percentage points higher than the previous fiscal year. In order to secure profits for shareholders in the future, retained earnings are due to be applied to enhancing product marketability, streamlining and strengthening domestic and overseas production and sales structures, developing new business sectors, and acquiring treasury stock.

��

��

��

��

��

��

��

��

��

�

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

� � ��

��

��

��

��

��

��

��

�

��

��

��

��

��

��

��

�

��

��

��

��

��

��

��

��

��

Corporate Appraisals from External InstitutionsThere has also been an increase in the number of occasions when the company has received strong appraisals for corporate social responsibility from external organizations. Toyota Industries has been evaluated by the stock market as a company that is proactively fulfilling its social responsibili-ties, and its shares have been incorporated into the FTSE4Good and other world-standard SRI indexes, as well as various SRI fund (investment trust) portfolios. (SRI: Socially Responsible Investment.) In addition to evaluations that use financial analy-ses, investors use this method of investment for evaluating ac-tivities that take into consideration the environment and society with a view to selecting specific issues for investment or for using SRI funds (investment trusts). Companies that invest in funds tend to focus on putting their money into groups of issues (SRI indexes) selected in accordance with the CSR evaluation criteria used by various appraisal institutions (institutions that provide indexes). As a result of its proactive efforts to promote its business and stabilize its financial position, Toyota Industries earned bond rat-ings of AA- from S&P and AA+ from R&I in FY 2005.

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Promoting Corporate Value and Enhancing Communications

Responsibility to Our Shareholders

Graph 1, 2, 3

Table 1


Encouraging Better Individual Investor Understanding of Toyota IndustriesIn FY 2005, Toyota Industries participated in Nomura Asset Management Fairs held in Nagoya and Tokyo and sponsored by Nomura Securities. This IR event for individual investors was attended by approximately 1,000 investors that visited our booth at the fair to hear explanations of the company’s business. In order to enhance understanding of the company, we are striving to achieve even more proactive disclosure of corporate information.

Information Disclosure Committee: Examining the Coverage, Appropriateness and Timeliness of Important InformationToyota Industries Corporation established the Information Disclosure Committee in March 2005. Based on the Securities and Exchange Law and the timely disclosure provisions of the stock exchanges where the company’s stocks are listed, the committee endeavors to gather information and examine the appropriateness of disclosure, as well as ensure the coverage, appropriateness and timeliness of financial statements, business reports and annual reports.

Ensuring Comprehensive Communications with Shareholders and InvestorsTo further ensure appropriate disclosure of information to shareholders and investors, Toyota Industries established the Investor Relations Office in July 2002 to engage in IR activities. This step effectively provides shareholders, investors and analysts with the information necessary for investment judgments in a timely, impartial and ongoing manner, and ensures that the company is evaluated fairly in the capital markets. Since then, the office has come to play a central role in promoting communications with shareholders and investors. In order to fulfill its responsibilities to its shareholders, Toyota Industries must not only work on disseminating information about itself, but also constantly endeavor to identify the sort of information shareholders want, as well as what they expect of the company. To ensure this occurs, we have established a contact point for shareholders and investors on our IR website where we can respond to shareholder and investor opinions and questions. Meanwhile, some members of top management make visits to major overseas investment institutions and shareholders to exchange opinions with them. The General Meeting of Shareholders is timed in such a way as to avoid the concentrated scheduling of listed company meetings within a short period of time so that shareholders with interests in multiple companies can participate in as many meetings as possible.

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��，��，��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Nomura Asset Management Fair (Tokyo)Nomura Asset Management Fair (Nagoya)

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Promoting Corporate Value and Enhancing Communications

Graph 4

Table 2


Responsibility to Our Shareholders

• ReportsFinancial Statements (Japanese)Business Reports (Japanese)Annual Report (English)

• IR Site on Toyota Industries’ Website (Investor information page) Key management indicator trends IR Library IR Calendar Latest Stock Price Information FAQ Contact Us (Inquiries related to investor information)

Information Disclosed for Shareholders and Institutional Investors

��

��

��

��

��

��

��

��

��

��

Overview of IR Activities in Fiscal 2005

Annual Report

[Events]• Results briefi ngs for institutional investors and analysts (four times a year)

• Briefi ngs for salespersons from securities companies (twice a year)

• Factory tours and business briefi ngs for institutional investors and analysts (as required)

• IR events sponsored by a securities company for individual investors (twice a year)

• Management policy briefi ngs for institutional investors in Europe and the United States (once a year)

[Routine operations]• Responses to requests for interview from institutional investors and analysts

Investor information page

Business Reports

Financial Statements

IR calendar

IR site map

IR calendar

IR site map

Annual Report

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��


Toyota Industries conducts a wide range of business operations and procures components, material, and equipment in a variety of areas from business partners all over the world.

We work toward the realization of co-existence and co-prosperity with business partners from a long term perspective. In addition to purchasing goods at lower costs and with better quality at the time they are needed based on fair trading practices, we cooperate with our business partners in responding to social demands, including environmental conservation.

Toyota Industries Is Working to Realize Co-Existence and Co-Prosperity with Our Business Partners, Based on Fair Trade and Transactions

Toyota Industries continuously offers open procurement opportuni-ties on our website to achieve broad and open procurement. Togeth-er with offering a marketing opportunity for suppliers all over the world, we facilitate fairness and equity by ensuring that suppliers understand this process through public notification of our standard procurement procedures, from marketing to the conclusion of con-tracts. To apply, potential business partners must register the status of their environmental certifications, such as ISO 14001, as well as some basic items such as their business scale and results.

Fair competition based on an open-door policy We provide open, fair, and equal trading opportunities to any company that wishes to do business with us, regardless of nationality, company size, or past trading history with Toyota. When selecting business partners, we judge in a comprehensive manner the quality, price, lead-time for delivery, technical capabilities, details of management policies, and responses to environmental issues.

Co-existence and co-prosperity based on mutual trust We strive to ensure co-existence and co-prosperity based on mutual trust with our business partners by promoting communication throughout our procurement activities.

Manufacturing environmentally friendly products by promoting green procurement

Toyota Industries purchase components, material, and equipment with low adverse environmental impact from business partners that maintain a high level of environmental consciousness in ensure our products are as environmentally friendly as possible.

Promoting regional businesses based on good corporate citizenship

For regional production overseas, we promote procurement from local businesses to contribute as a local corporate member of the community.

Compliance with relevant lawsToyota Industries pays great attention to the handling of mutual confidential information as well as complying with societal norms, regulations, and the spirit of the law.

Conducting Procurement Policy Explanatory Meetings Toyota Industries strives for communication with business partners in various forms in order to enhance mutual trust. The company holds procurement policy explanatory meetings for major business partners in order to explain annual procurement policies and to gain their understanding and cooperation with our efforts.

Offering Marketing Opportunities through Open Procurement

Toyota Industries has established a consultation center to enhance communication with its business partners. We mainly handle com-plaints and consultations from business partners regarding subcon-tracting laws, and make use of this information to maintain mutual trust and improve our procurement activities.

Personnel in a neutral position who are not responsible for the business transaction manage the consultation center within the Purchasing Department. In this way, we can respond to our business partners in a fair, non-discriminatory manner.

Establishing a Consultation Center for Business Partners

Of our approximately 1,500 business partners in Japan and overseas, about 800 companies are subject to laws concerning subcontract-ing, which account for more than half the total number. Our focus is, therefore, on compliance with the Japanese law (the Act Against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors), while working to ensure trade is conducted on an entirely fair basis.

We determine the department responsible for ensuring that Toyota Industries complies with relevant laws and regulations. The Purchasing Department, which is the department responsible for subcontracting laws, implements audits of each department as well as company wide education programs divided by classification and education of personnel responsible for procurement. It also pub-lishes a newsletter entitled, “News Concerning Subcontracting Law” to provide complete notifications of the letter and the spirit behind subcontracting laws. All employees were immediately informed of

Conducting Entirely Fair Trade

Furthermore, we hold individual explanatory meetings for important matters, such as our response to social responsibilities and other issues, in order to share information about our respec-tive needs and reinforce our relationships with our business partners.

In March 2005, we held an Environmental Response Ex-planatory Meeting with almost all of our business partners. We explained our ideas and the importance of corporate social re-sponsibility, and our requirements for their cooperation regarding the use of substances of concern, and other matters.

Toward Co-Existence and Co-Prosperity with Business Partners

Responsibility to Our Business Partners

Procurement Policy


In June 2005, two of our business partners acquired Toyota Industries Environmental Management System certification. They also positively evaluated some incidental effects, as described by the following comments: “We reduced energy consumption by 10% and hence reduced costs”. “We assigned these tasks to new employees. They worked diligently on them and it became an opportunity to raise awareness among all our employees”. “The inside of the plant became much cleaner and contributed to the improvement in the quality of our products”.

Case Study Two Business Partners Acquired Toyota Industries Environmental Management System Certification

Toyota Industries supports business partners’ efforts to improve their financial standing in order to consistently procure better products. For Hoeikai, which is comprised of 68 cooperative companies working with Toyota Industries, we proactively support quality and cost improvements, safety and health management, and environmental conservation.

In a concrete manner, we implement quality training, provide instruction, cooperate in improvements of processing techniques at production sites, and by conducting a Safety and Health Environ-ment Convention.

Supporting Business Partner Reforms

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

In order to manufacture environmentally friendly products, we need to implement cooperative initiatives with our business partners.

We require our business partners to establish an environmental management system and to work on reducing the use of substances of concern based on our green procurement guidelines. In addition, we have the same requirements for our affiliates in Japan and over-seas.

Establishing an Environmental Management SystemToyota Industries recognizes that it is essential to acquire an en-vironmental management system certified by external authorities, such as ISO 14001.

We require business partners who are having difficulties in acquiring certification from external authorities in the interim to implement the Toyota Industries Environmental Management System, which is regulated by Toyota Industries. We fully support our business partners in their efforts to implement this system.

Initiatives for Substances of Concern In order to meet regulations regarding the use of substances of concern, such as EU-ELV (the European Union’s end-of-life vehicles directive), we require the suspension or reduction of use, and the management of usage of these substances that are included in products or in manufacturing processes.

Our procurement system requires our business partners to submit a banned substances declaration and environmental data including a report of substances contained in components and other facts. We procure items upon confirmation by our Quality Guarantee Department for products, and after confirmation by the Safety, Health and Environment Department of Toyota Industries for production. We also implement inspections of the processes employed by business partners, as necessary.

We have been utilizing analysis equipment that measures substances of concern since FY 2004 to reinforce our management of these substances. We also implement random inspections of supplied products. We will work on increasing the use of analysis equipment in the future.

Promoting Environmentally Friendly Procurement

the details regarding the revisions to Japan’s Subcontracting Act in April 2004.

Toyota Industries’ Environmental Management System, certification ceremony

Chart 1


Based on the Guiding Principles for Corporate Citizenship, Toyota Industries is committed to a wide range of social contribution activities that benefit local communities, mainly in the area of social welfare, education of young people, and environmental conservation. These activities include the provision of human resources to welfare facilities, traffic safety activities, donations to welfare events, community programs for the education of young people, community events, sports events, environmental conservation activities, and provision of company facilities for use in various community activities.

Toyota Industries also continues its support to the Toyota Commemorative Museum of Industry and Technology, Sculpture d’ Esaka (art museum), and Kariya General Hospital. Toyota Industries is also involved in the management of these establishments.

In FY 2005, Toyota Industries proudly cooperated with the planning and operation of EXPO 2005 AICHI JAPAN and made contributions to the victims of the Niigata Chuetsu (a region in central western Japan) earthquakes, as well as to victims of the earthquakes that occurred off the coast of Sumatra and the Indian Ocean tsunami.

Toyota Industries Is Committed to a Wide Range of Social Contribution Activities that Benefit Local Communities

Basic PhilosophyToyota Industries is respectful of the people, culture, and traditions of each region and country in which it operates. It also works to promote economic growth and social development in these regions and countries.

Basic PerspectiveWhile achieving corporate development and longevity, Toyota Industries strives to fulfill its role as a good corporate citizen so that the regions that provide a foundation for its corporate activities and the life of its employees become more prosperous and more comfortable to live in. To accomplish this, Toyota Industries actively promotes cooperative support activities with the objective of contributing to local communities through the provision of human resources, facilities and funds. Toyota Industries’ employees also endeavor to be of service to the community through such means as volunteer activities.

Guiding Principles for Corporate Citizenship

Social Contribution Activity SystemTo promote its social contribution activities, Toyota Industries has established a volunteer unit called Heartful Group in its General Administration Department. This group drafts annual plans to strengthen the voluntary planning of social contribution activities, communication with local communities, and in-house education and enlightenment activities. As a secretariat for the volunteer organization Toyota Industries Heartful Club, the group also promotes and supports the club’s activities.

At present, Toyota Industries and its affiliates at home and abroad are undertaking social contribution activities in accordance with local circumstances. To balance the activities of the group as our business operations become even more globalized, Toyota Industries established the Corporate Citizenship Subcommittee in FY 2006, which has already begun to study plans for medium-term activities for social contribution.

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

In-House Employee Education and Enlightenment ActivitiesTo increase employee awareness of social contribution activities and to encourage their positive participation in volunteer programs, Toyota Industries provides employees with education aimed at increasing their understanding of a company’s social responsibilities and the meaning of activities for social responsibility.

Information about volunteer activities and recruitment is provided to all employees through Toyota Industries’ intranet.

Communication with Local CommunitiesTo realize a harmonious coexistence with local residents and communities, Toyota Industries holds regular meetings with the members of the local community for the purpose of exchanging opinions and sharing information and solutions to various problems. The participants in the meetings are representatives of local communities and those of related departments, such as General Administration, Environment, Public Affairs and Human Resources. Administrators and legislators also attend the meetings whenever necessary. The subjects Let’s visit production sites

Achieving Coexistence with Local Communities

Responsibility to Our Local Communities

Toyota Industries’ in-house Gino Senshu Gakuen (Technical Training School) organizes an unforgettable volunteer activities program to help employees experience welfare service and learn the working conditions of people with disabilities. In June 2005, the program was implemented at Ohisama, a welfare facility, and at Akebi-En, a workplace for the disabled, with 77 people taking part and learning through the practical experience program.

Case Study Learning through Experience at Welfare Facilities by the Students of Gino Senshu Gakuen

Graph 1


discussed include Toyota Industries’ business activities, environmental risks, community events, crime and disaster prevention and traffic safety.

In addition, Toyota Industries participates in an annual event entitled “Let’s visit production sites.” This event offers people in local communities the opportunity to tour the factories of the seven companies comprising the Toyota Group, including Toyota Industries, based in Kariya, Aichi Prefecture.

Inter-Affiliate Meetings on Corporate Citizenship with Domestic AffiliatesTo promote participation and cooperation with its social contribution activities, and to increase the activities undertaken by its domestic

Toyota Industries Heartful Club—Volunteer Organization Composed of the Toyota Group’s Present and Retired Employees and Their FamiliesIn 1997, Toyota Industries established the Toyota Industries Heartful Club, which is comprised of present and retired employees (and their families) of the company and its affiliates who want to take part in volunteer activities for building a more prosperous society.

The club’s aim is to plan and manage various volunteer activities in which the club’s members play a central role. In addition, the club intends to encourage its members to take part in these volunteer programs for the purpose of raising their awareness and contributing to the realization of a more prosperous society.

As the club’s secretariat, the Heartful Group in the General Administration Department supports the club’s activities by, amongst other things, performing related business procedures, providing information, and serving as a contact point for outside organizations. The group also offers the club financial assistance for the cost of volunteer activities, volunteer insurance policies and other expenses. The club’s activities are informal and are, in principle, performed outside the company and after office hours.

The result of a questionnaire directed at club members shows that many of them hope the company will reinforce the system for supporting their volunteer activities. Toyota Industries will examine this issue in an attempt to meet the members’ needs.

In FY 2006, Toyota Industries established the Corporate Citizenship Subcommittee under the Corporate Code of Conduct Committee—the committee directly controlled by the President. The subcommittee has begun to study plans for mid-term activities for the group as a whole. The problems discussed by the subcommittee are “promotion of global activities for social responsibility” and “examination of the major activities for increasing corporate value”. In 2005, the subcommittee carried out a fact-finding survey on the social contribution activities by each domestic and overseas member company. It is currently considering group policies for activities and opportunities to expand the scope of activities through reinforcement of exchange and cooperation with NGOs, NPOs and community organizations in Japan and overseas.

Corporate Citizenship Subcommittee Established to Promote Global Activities

Toyota Industries undertakes a variety of activities for supporting people with disabilities. These activities include events planned by the employees of Toyota Industries themselves.

Social Welfare Activities

Positively Supporting Social Welfare Events Planned by Toyota Industries’ EmployeesToyota Industries positively supports the social welfare events planned and managed by the Toyota Industries Heartful Club. Major annual events include clam digging, Social Welfare Get-Together Festival in Shines, and strawberry picking and sweet potato harvesting programs.

The clam digging event is held every spring by people at the workplace to give disabled local residents the chance to enjoy nature. The event has also become an occasion for friendly exchanges with people from other social welfare facilities. In FY 2005,

affiliates, Toyota Industries has been holding the Inter-affiliates Meeting on Corporate Citizenship twice a year since 2004. At present, eight domestic affiliates take part in the meeting, and we will continue to work to increase the number of participating affiliates. At the meeting, Toyota Industries publicizes the policy and details of its business activities, examines the activities which can be carried out jointly, encourages participation in the Toyota Industries Heartful Club, drafts the plans of each affiliate’s activities and checks the results of these activities.

Participating affiliates: Sun Valley, Co, Ltd., Taikoh Transportation Co., Ltd., Taikoh Taxi Co., Ltd., SKE, Shine’s Co., Ltd., Sun Staff, Inc., Toyota High System Co., Ltd., and SK Maintenance Co., Ltd.

Michigan Automotive Compressor Inc. (MACI), a manufacturer of compressors for car air conditioners is based in Parma, Michigan, in the U.S., a village with a population of 800. MACI appoints a community coordinator in an effort to build good relationships with the local community.

MACI’s community coordinator attends the village’s monthly meetings and also takes part in the summer parade and other special events. The company also makes donations to the village’s various projects and is working to become a community-based company by building a relationship of mutual trust with the community.

Case Study Building a Good Relationship with the Community— Michigan Automotive Compressor Inc. (MACI) [U.S.A.]

Toyota Industries Heartful Club general meeting

The clam digging event

Social Welfare Get-Together Festival


Toyota Industries is a sponsor of the Special Olympics (SO), an international organization that gives individuals with intellectual disabilities an opportunity to have daily training in sports and to show the training results at annual athletics meets, thereby assisting them to participate in society. We also volunteer our athletic grounds and gym facilities for use at these meets, as well as make donations to SO and support its activities and events. As a supporting company,

Every year, Toyota Industries invites local children who have been orphaned as a result of traffic accidents to the grand sumo tournament held in July in Nagoya through the Chunichi Shimbun Charity Organization. In 2005, 250 children watched the tournament.

In addition, Toyota Industries takes this opportunity to ask Shibatayama stable master Onokuni (62nd Yokozuna) and the wrestlers of his stable to visit local welfare facilities and offer support and encouragement to local residents. In July 2005, the stable master and wrestlers visited Akebi-En, a workplace for the disabled in Obu, Aichi Prefecture; Hidamari, a small workplace for the mentally and physically disabled in Obu; and Handa-dohoen, a social welfare corporation in Handa, Aichi Prefecture. The Shibatayama stable master and

wrestlers visit welfare facilities

Kariya General Hospital is operated by Toyota Medical Corporation, an organization invested in by 7 companies of the Toyota Group as part of their corporate responsibilitiy ativities. In Kariya City, which has no public hospital, Kariya General Hospital plays a leading public role in, among others, providing first-aid medical service. Since its foundation in 1963, Toyota Industries has continued to provide human resources and financial support to the hospital. The aim of Kariya General Hospital is to become an institution more trusted by and more popular among people in the area. The hospital ranking (overall evaluation) by Nihon Keizai Shimbun gave this hospital the highest score “AAAA” and the eighth place in the country.

Participation in the Management of Toyota Medical Corporation’s Kariya General Hospital

about 300 people took part in this program, with new students of Toyota Industries’ Gino Senshu Gakuen working as volunteers.

The Social Welfare Get-Together Festival in Shines is an event held in collaboration with the Kariya City Social Welfare Council (Kariya, Aichi Prefecture) where local Kariya residents with disabilities and their families are invited to Shines, the company’s employee leisure and entertainment facility. During the day, participants enjoy handicrafts, self-made games, singing and dancing together with the company’s volunteers. The eleventh festival held in February 2005 was attended by 206 guests and supported by the assistance of 127 volunteers.

The strawberry picking and sweet potato harvesting is a joint event with volunteers from Aisin Seiki Co., Ltd. Local residents with disabilities are invited to a citizens’ farm in Denpark (a flower and greenery theme park in Anjo, Aichi Prefecture) where strawberries and sweet potatoes are cultivated. This event gives participants the chance to have contact with nature and is held twice a year. In spring, participants enjoy strawberry picking, and in fall, sweet potato harvesting.

Sweet potato harvesting in Denpark

Toyota Industries is engaged in a variety of support activities for building its friendship with people in local communities, such as traffic safety activities, involvement in local town-building plans and provision of facilities for community activities.

Community Activities

As an automotive-related manufacturer, Toyota Industries proactively provides its employees with traffic safety-related educational programs and cooperates with local traffic safety activities to promote model traffic safety practices and achieve the goal of zero traffic accidents.

Toyota Industries’ Central Traffic Safety Committee decides the traffic safety programs to be implemented, with the Traffic Safety Committee at each plant responsible for promoting these activities at the plant. At every workplace, the members of the traffic safety committee play a major role in holding monthly meetings to promulgate traffic rules to all employees and to prevent traffic accidents. Educational activities include the publicity of the action policy, decision on the workplace’s activities, written oaths on safety driving by employees and prediction of dangers using actual cases

Traffic Safety Activities Aiming to Achieve the Goal of Zero Traffic Accidents


Sumo Field Trips for Orphaned Children; the Shibatayama Stable Master and Wrestlers Visit Welfare Facilities

Support to the Special Olympics

Taikoh Taxi Company’s primary business has mainly been in taxi operation and offering its customers the best possible transportation service. In anticipation of an era of lowering birth rates and an aged society, the company has commenced a welfare taxi business to support the lives of elderly local residents. The company has taxi cabs with revolving seats for easier entry and exit, that are capable of taking wheelchairs, and bed-type cabs. Taikoh Taxi has also obtained a licence qualifying it as a business covered by Long-term Care Insurance. The company has drivers qualified as Grade 2 Home Helpers and, using these drivers, has begun offering a service for those who find it difficult to have a bath at home by themselves, whereby the driver transports a special bath tub by car to their home and assists them to take a bath.

Case Study Welfare Taxi Business for the Future Aged Society—Taikoh Taxi Co., Ltd. [Japan]

Toyota Industries gave a donation to the Special Winter Olympics held in Nagano in February 2005.


Cooperating with and Participating in Community Events and Contributing to the Protection of Traditional CultureToyota Industries supports Kariya City in holding the Mando Festival (which has been officially recognized as an intangible cultural asset by Aichi Prefecture) in July each year. Employees and students of Gino Senshu Gakuen, together with Kariya residents, repair the giant mando lanterns, practice flute playing and drum beating and make other preparations as early as three months in advance. In 2004, about 170 employees participated in lantern-carrying parades on the day of the festival. Toyota Industries also supports other local summer festivals and Bon Festival dances, such as the Kariya Wansaka Festival and Fireworks Display.

Toyota Industries volunteers the use of its athletic grounds, gym facilities, tennis courts, judo halls and training rooms for various sports activities, school club activities and other community activities. We also offers our corporate buses for social welfare programs and lend trucks for environmental conservation activities to support these community activities.

Providing Facilities for Community Activities

Providing the company’s gym facilities

Mando Festival (which has been officially recognized as an intangible cultural asset by Aichi prefecture)

of traffic accidents.Toyota Industries also works to improve its traffic safety

education through new employee education, driving simulations and lectures on traffic laws conducted by local police.

During the nationwide traffic safety campaigns conducted in spring, summer, fall and winter, Toyota Industries carries out the Yellow Stop Campaign in cooperation with the Toyota Group and local governments. Our employees station themselves at the streets near the company’s plants to encourage drivers to drive safely. They also carry out this activity on Zero Traffic Accident Day, and in FY 2005, a total of 1,745 employees took part in this campaign.

Obu Festival of Industry and Culture. In addition, in cooperation with the Obu Invention Club, Toyota Industries holds the Summer Vacation Loom Course every year to give elementary school children in the city the opportunity to experience the pleasure and sense of achievement of making products in handicraft and experiment programs. The Kariya Invention Club for Boys is operated by the Toyota Institute of Physics and Chemistry, and 11 companies of the Toyota Group provide financial assistance to the club’s management.

Educational and Cultural ActivitiesToyota Industries supports educational activities in the community, including youth education programs and sports events, as well as donations to universities. In addition, we proactively sponsor cultural and art activities.

To help foster youth education, Toyota Industries supports the Obu Invention Club for Boys and Girls and the Kariya Invention Club for Boys. We offer financial assistance to the management of the Obu Invention Club and give support to the Invention Club Booth at the

Supporting the Invention Club for Boys and Girls to Help Youth Education

Invention Club Booth at the Obu Festival of Industry and Culture


Sun River is a company that operates sports facilities, restaurants and other establishments. This company cooperates with learning through vocational experience programs aimed at developing the autonomy and independence of youths, and accepts junior high school students every year for this purpose.

In the programs, junior high school students do cleaning work and load commodities into automatic vendors at golf courses and other location. Examples of comments from participating students include, “the program allowed me to realize how hard work is and provided me with a valuable experience”, while the community rates Sun River’s commitment to youth education quite highly.

Case Study Cooperating with Vocational Experience Programs for Junior High School Students

—Sun River Co., Ltd. [Japan]

The Children’s Museum in Columbus was established as a facility for developing children’s inquiring minds, creativity and cooperativeness, and for learning about the world and community around them. The museum has several places for displaying various exhibits and providing entertainment, with “Our House” being one

Case Study Contributing to Child Education through Cooperation for the Our House Children’s Museum—Toyota Industrial Equipment Mfg. (TIEM) [U.S.A.]

Kirloskar Toyoda Textile Machinery Private (KTTM) in India is the manufacturer and seller of spinning machines and automotive parts. The company provides environmental education to teachers and students at local high schools. The aim is to have young people who will lead in the future understand the need for environmental conservation and to promote exchange between the company and the community.

In FY 2005, Kirloskar Toyoda provided environmental education to 160 students at local high schools. At Jingai High School, the teaching programs included environmental changes in the area, such as lake pollution and dust pollution caused by granite industries; the importance of forests; and the negative effects of plastic shopping bags. This education is helping increase the students’ awareness of the environment; with one student commenting that, “environmental conservation should be promoted not only by individuals but also by people’s concerted efforts”. Education at a local high school

Case Study Providing Environmental Education at Local High Schools—Kirloskar Toyoda Textile Machinery Private Ltd (KTTM) [India]


Toyota Industries supports the management of the Sculpture d’Esaka, an art museum operated by Sun River, one of our affiliates. We also give financial assistance and provide exhibits to the museum.

Supporting the Management of the Sculpture d’Esaka (Art Museum)

Environmental Conservation ActivitiesToyota Industries supports a variety of environmental conservation activities through the volunteer efforts of its employees, including community cleanup events and nature conservation activities.

Toyota Industries carries out a company-wide environment beautification campaign in which its employees volunteer to clean the areas surrounding its plants. This campaign has gradually been expanded to or affiliates, and in FY 2005, a total of about 2,300 employees, including those from 9 affiliates, took part in the event. In addition, the company’s Managers’ Council conducts environmental beautification activities, while the Toyota Industries Council of Retired Employees (an organization comprising retired Toyota Industries employees) takes part in cleanup events in the areas around public facilities, such as parks and stations.

In FY 2005, Toyota Industries began to participate in the cleanup campaign in the area around Aburagafuchi, the largest natural lake in Aichi Prefecture. About 100 Toyota Industries’ employees and their families took part in the lake’s cleanup event held in July, 2004.

Community Cleanup EventsThe Toyota Group, including Toyota Industries, sponsors charity concerts held by the Nagoya Philharmonic Orchestra entitled Box Seats Full of Dreams. The group invited local residents with disabilities and their families to the concert held in October 2004 at the Kariya Citizens’ Hall in Kariya, Aichi Prefecture.

Toyota Industries is also a supporter of the annual New Year’s Concert sponsored by Aioi Insurance Co., Ltd. The concert was held in January 2005 at the Aichi Prefectural Concert Hall of Arts and Culture as a partnership project for EXPO 2005 AICHI JAPAN.

Sponsoring Classical Music Performances


of these locations. Every year, the house holds an exhibition of the living environment, culture and life of countries around the world, and chose Japan as the first country for the show. Employees and families of employees of Toyota Industrial Engineering Mfg. (TIEM), a Japanese affiliate in Columbus, volunteered to assist with displaying Japanese culture and lifestyle correctly at Our House. The company made both financial and non-financial contributions (display items) to the exhibition. In June 2005, TIEM’s employees took charge of the show and helped hold the opening event of Our House.

Toyota Industries contributes to the development and promotion of sports activities through donations to and sponsorship of sports promotion organizations and sports meets, mainly those in the local area.

In FY 2005, Toyota Industries supported the Sports Promotion Fund, Kariya Physical Education Association, Kariya Softball Federation, Central Japan Student Nanshiki Baseball Federation and other sports promotion organizations. We also sponsored the Higashiura Marathon Race (in Obu, Aichi Prefecture), National Invitational University and Business Sumo Tournament in Kariya, World Orienteering Championships, Toyota International Youth Football Championship, Student Formula SAE Competition of Japan and other sports events.

Contributing to the Development and Promotion of Amateur Sports

The Toyota Commemorative Museum of Industry and Technology was jointly founded by 13 companies of the Toyota Group. Its purpose is to increase the understanding of young people about the spirit of research and creation and the importance and pleasure of making products. The museum also aims at conserving and utilizing as an historic industrial object the museum building, which has been designated as an important building for cityscape by Nagoya City. (The building was once part of the former Toyoda Automatic Weaving Co. and was constructed in 1911 by Sakichi Toyoda, the founder of the Toyota Group, for use as an experimental factory for developing new automatic looms.) Toyota Industries provides the

Participating in the Management of the Toyota Commemorative Museum of Industry and Technology

Children’s Museum Our House

The Adopt-an-Area Program is a new type of town beautification program implemented by citizens, businesses and the local government. The word “adopt” means “to take someone else’s child as your son or daughter.” Under this program, citizens and businesses regard a certain public area as an “adopted child” and clean and beautify that area as its “foster parents”. The local government supports the program by, among other means, providing cleaning equipment and collecting rubbish. At each area selected as an “adopted child”, a signboard showing the name of the “foster parents” is put up, which helps to inform citizens about the program. Toyota Industries has four “adopted children” in Handa and Obu, where it carries out cleanup and beautification activities. We are now also considering participation in the program in Kariya.

Participation in the Adopt-an-Area Program

Cleanup and beautification activities

A signboard

museum with human resources, funds for covering management costs and exhibits, and also participates in its management.


Topics in FY 2005

Eco-Talk Session

The Toyota Group Pavilion

EXPO 2005 AICHI, Japan, was held from March to September 2005 under the theme of “Nature’s Wisdom”. Toyota Industries participated in the hosting of the Expo in various ways.

Toyota Group PavilionAs a member of the Toyota Group, Toyota Industries exhibited at the Toyota Group Pavilion. The booth displayed near-future equipment for distribution within premises, developed using our original ITS technology. Exhibits included a Warehouse Management System that supports the distribution center, information technology that increases the effi ciency and safety of forklift operations, and technology for assisting picking operations, which are essential for distribution.

Toyota Industries’ technology also played an active role in many locations at the Expo site. For example, our technology for operating an unmanned carrier was utilized in the development of the automatic control system for the unmanned i-unit—a single-seater futuristic concept vehicle. In addition, our zero-emission battery-operated industrial vehicles were also used as rubbish collection cars at the Expo site.

The i-unit—a futureconcept vehicle


Toyota Industries’ employees volunteer to participate in nature conservation activities in local communities and help conserve forests and protect wild life. For example, they are engaged in the campaign to conserve the habitats of wild Japanese rises, which are government-designated protected species, such as Kozutsumi-nishiike Pond in Kariya, Aichi Prefecture.

Nature Conservation Activities in Local Communities

Nature conservation activities in Kozutsumi-nishiike Pond in Kariya, Aichi prefecture

Toyota Industries gives donations to organizations such as the Keidanren Nature Conservation Fund and the Fund for the Promotion of the Proper Disposal of Industrial Wastes. We support the Nordic-Japan Environmental Conference, Honokuni Forest Festival, Council for the Development and Water in Chubu, and Nationwide Festival of Children’s Eco-Clubs.

Supporting Environmental Conservation Activities

Aid to Disaster-Stricken Areas

Toyota Industries collected contributions from its employees for the victims of the Niigata Chuetsu earthquakes and sent its employees to the area as volunteers to assist with recovery efforts. Toyota Industries and its affi liates also made contributions to the victims of the earthquakes off Sumatra and the Indian Ocean tsunami.

Assistance Disaster-Stricken Areas in Japan and Overseas

The Toyota Group Disaster V (Volunteer) Net is a group formed to help the victims of natural disasters and disaster-stricken areas become independent and restore themselves. In collaboration with the local government’s volunteer headquarters, the network supports the quick implementation of volunteer activities by providing disaster information to registered volunteers via the Internet. The network now has 96 employees registered as volunteers that take part in events and other programs aimed at helping to prepare them for relief activities in the event of a disaster.

Disaster Volunteer Net

Cooperating with the Hosting of EXPO 2005 AICHI JAPAN

In June 2005, the Environmental Partnership Organizing Club sponsored an Eco Talk Session held at the EXPO Hall at the EXPO site. Toyota Industries, together with Toyota Motor Corporation, DENSO Corporation and Aisin Seiki Co., Ltd., participated in the talk session with the children from Takahama Municipal Tsubasa Elementary School and discussed environmentally-friendly cars as part of the common theme of, “establishing an environmentally-friendly motorized society for the future”. The Vice President of Toyota Industries attended the session and answered the childrens’ questions and responded to each of their energy saving and water pollution prevention proposals. In response to the Tsubasa Elementary School’s declaration, “We will work together to realize an environmentally-friendly lifestyle and to keep the air and water clean,” the company gave them its message, “We will contribute to the creation of an earth and prosperous society that is comfortable to live in through the production of environmentally-friendly products and services”.

Participation in the Eco-Talk Session Sponsored by the Environmental Partnership Organizing Club (EPOC)*

* Environmental Partnership Organizing Club (EPOC)Founded in 2000 and comprised of approximately 300 businesses and other organizations in Chubu, including Toyota Industries. The club provides various kinds of information about environmental measures being implemented in the Chubu region and aims to make the region an advanced area in the fi eld of environmental conservation and aims to build a safe and comfortable recycling-type economy and society.


Creating Comfortable Workplaces Based on Respect for Human RightsToyota Industries’ basic philosophy with regarding to its employees is to “nurture the individuality and capability of each employee based on employee-management, mutual trust and self-responsibility, in order to create a dynamic corporate climate where collective strength is exercised in full.” With this in mind, Toyota Industries is endeavoring to create a healthy and habitable workplace, as well as ensuring employment and maintaining/improving the long-lasting stability of working conditions. (In creating a healthy and habitable workplace, it is essential to achieve a working environment where the human rights of each individual are respected, and everyone has a rewarding job and can work at ease.)

Toyota Industries believes the most important things for making our offices comfortable are to respect human rights and to provide job satisfaction for employees. Above all, respect for human rights is a fundamental element, and Toyota Industries stipulates in its action guidelines that privacy of individuals is respected, and discrimination or harassment on the basis of race, religion, belief, gender, nationality, disability, illness or any other reason are not tolerated. (In addition, as the globalization of our business operations continues, Toyota Industries endeavors to eliminate global issues such as child labor and forced labor within the group, as well as complying with laws and social norms in each country.)

Employee-Management Relations Based on Mutual TrustToyota Industries aims to achieve both the well-being of individuals and development of the company through active discussions between employees and management. This is only possible if mutual trust between these two parties exists. Overseas affiliated companies also adopt a similar approach to employee-management relations, with both groups cooperatively engaging in the business.

Toyota Industries provides many opportunities for interation with management, such as employee-management discussion sessions and sectional meetings to promote active and varied discussion between employees and management.

Ensuring a Workplace Where Each Employee Can Work Safely with Enthusiasm

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Responsibility to Our Employees

Employment SecurityToyota Industries places high value on stable employment. The number of people employed by Toyota Industries has been steadily increasing from year to year as a result of business expansion. We currently employ 30,990 people, as at the end of March 2005, with approximately half of these personnel employed at overseas affiliated companies. Overseas affiliated companies actively recruit local staff, thereby contributing to the local economy.

Diversification of Employment and Equal OpportunityWith the expansion of our business operations and increased globalization, the employees of Toyota Industries have become more diversified over time. It is the company’s belief that provision of a fair and just working environment is of the utmost importance, where diversity of individuals is respected regardless of gender, age, nationality, disability or otherwise.

Toyota Industries is promoting equal opportunity and creating workplaces where all the employees can fully engage their talents.

Employment of Disabled PersonsToyota Industries employs people with disabilities every year on a continual basis and assigns them to various workplaces. It is our view that disabled people and others should work together and share job satisfaction and the purpose of life. The employment rate of people with disabilities was 1.83% as at the end of March 2005 (legal requirement is 1.8%).

Toyota Industries is endeavoring to improve the work environment by organizing a Settlement Promotion Team within the company and by holding informal discussions with disabled persons to hear their opinions on a regular basis. These steps are intended to ensure a workplace where disabled people can work at ease.

Re-Hiring After RetirementToyota Industries has the Super Career Program, a post-retirement re-hiring program. The purpose of this program is to address the issues of falling birthrate and aging population, as well as to pass down skills and expertise from experienced to less-experienced employees.

Retiring employees who wish to be re-hired are selected through this program to work a maximum of three years as highly skilled technical workers or mentors for junior employees.

We also have a system in place whereby retired employees can register with our affiliated company, Sun Staff, Inc., as dispatch workers.

The Law concerning the Stabilization of Employment of Older Persons is expected to be revised in FY 2007 when introduction of continuous employment until 65 years of age will become obligatory and the company is reviewing the way to enhance its re-hiring program.

Graph 1


Ensuring Equal OpportunitiesIn order to promote equal opportunities at the workplace, Toyota Industries is striving to create a transparent and satisfying human resources system, as well as a workplace where employees can exercise their capabilities to the full, regardless of gender. Measures implemented so far include active recruitment of women on professional-track jobs, abolition of job classifi cation of main career track and general level, and various other schemes to support balancing work and family life.

The Equal Opportunity Manual clearly stipulates guidelines that explain the purpose of the law and the content for compliance for employees. In addition, the company provides consultation services concerning equal employment opportunities for both sexes, to ensure prompt responses to issues.

Increasing Workplace Strengths by Nurturing a Sense of Unity and Teamwork through Human Resource DevelopmentIn order for each employee to be enthusiastic about their work, and for the company to continue developing, increasing workplace strengths (organizational ability) is essential.

—Toyota Industrial Equipment Manufacturing, Inc. (TIEM) [U.S.A.]Toyota Industrial Equipment Manufacturing, Inc., (TIEM) implements an affi rmative action (proactive discrimination dissolution program) to ensure equal opportunities for females, minority groups, and the disabled, etc. TIEM has Affi rmative Action Programs and checks its employment procedures, promotions and transfers every year. It also analyses various data (regarding gender, ethnic groups, race, religion, and nationality) of job applicants and employees.

The ratio of minority groups to total employees was 6% as of 2005 (the ratio of the minority group living in the surrounding area was less than 5%).

TIEM intends to continue its efforts toward enhancing the program.

Case Study Efforts at an Affi liated Company in North America to Promote Diversifi cation

��

��

��

��

��

��

��

��，��

��

��

Toyota Industries interprets “workplace strengths” as being the power to identify the company’s mission and role, to pursue improvements without giving up until the fi nal goal is achieved, and with which employees develop and results are achieved on a continuous basis. In order to increase workplace strengths, specialized techniques (such as expertise, skills and know-how) need to be raised, as these techniques provide the starting point in manufacturing. In addition, management techniques such as TPS (Toyota Production System), QC, and SQC need to be employed to take full advantage of these techniques by uncovering problem areas and resolving them. When a spirit of harmony, such as motivation, teamwork and well-rounded humanity is secured as a foundation, and specialized techniques and management techniques are added to it, only then will workplace strengths be increased. Furthermore, when the workplace leader exercises leadership at the center of these three rings, workplace strengths can be improved and increased on a continuous basis.

During the year, the Global HR Department invited executives and managers in charge of personnel from overseas affi liated companies (25 persons from 10 countries) to Japan and held a Global HR Conference.

Participants gave presentations and had panel discussions on Labor Management and HR Development. They visited the company’s plants and Technical Training Center, and enjoyed hands-on activities relating to the Toyota Production System.

The conference promoted the participants’ understanding of Toyota Industries Corporation’s and Japanese corporate systems, as well as fostering a strong sense of unity between the various HR departments.

Global HR Conference

Nurturing a Sense of Unity and Teamwork to Strengthen the “Spirit of Harmony”Toyota Industries believes that well-rounded humanity and teamwork evolve from human relationships and communication, which lead to a strong workplace with a lively and fresh atmosphere. This is why the company actively promotes the PT (personal touch) movement—to nurture a sense of unity and teamwork in the workplace. Specifi c activities implemented as part of this PT movement include the ST system (steward system, which is provided by the seniors in the workplace) for new employees, the fosterer system (by superiors in the workplace), recreational activities, sports day, summer festival, and relay road race.

In addition, a variety of informal discussion sessions are held to listen to opinions, requests and concerns of employees appropriately and to deal with them without delay.

Case Study

Chart 1



“Forum TIESA”

��．

��

��

��

��．

��

��

��

Human Resource Development to Strengthen Specialized Techniques and Management SkillsToyota Industries endeavors to develop human resources so that each employee can exercise their ability in full in a variety of fields, while maintaining their independence and understanding the management philosophy and company policy. The company provides guidance and nurturing on an individual basis through the Challenge Sheet Interview to promote individual development, as well as providing an array of educational programs.

Human Resources Development ManagementToyota Industries employs the Challenge Sheet Interview system for its human resource development management, where guidance and nurturing are provided on an individual basis through communication between the employees and their superiors.Under this Challenge Sheet Interview system, the employee and the superior meet on a one-to-one basis once every 6 months to discuss the role of the individual in achieving the targets of the company or the department and the development plan until both sides are satisfied, while also reflecting on past achievements and processes. The result is used to set targets for the next period as well as to form a development plan for the individual. The employees’ own preferences regarding transfers and suggestions for the workplace are also discussed at the meeting.

As for managers, the company strives to promote human resource development by setting tasks and targets in terms of development and guidance of the employees, and by assessment that focuses on personnel development.

Education and Training ProgramsToyota Industries provides multi-layered and specialized area education and training to employees in technical positions and those in office and engineering positions, as well as a range of other programs.

ST System and Fosterer SystemThe ST system aims to help new recruits settle into the workplace smoothly and to build relationships of mutual trust. A senior employee at the workplace acts as a steward for the new recruit, and provides appropriate advice and guidance on a one to one basis for the first 6 months after posting to ensure a smooth start free of any difficulties. There is also the fosterer system where a superior in the workplace acts as a parent figure for another employee.

Workplace Communication ActivitiesIn order to promote communication activities in the workplace, each Head of Department is appointed as a recreation promotion committee member. Caretakers and recreational leaders are then appointed, and organizational efforts are made to promote communication activities.Toyota Industries subsidizes and promotes social get-togethers by members of the workplace, as well as recreational sessions and activities to nurture a sense of unity and teamwork among all employees and their families. In addition, various events are held at plants, for example, sports days, summer festivals and a company-wide relay road race, etc., to actively promote communication.Participation in supporting company sports, such as softball, rugby and marathon, is also encouraged as a way to raise a sense of unity through support in unison.

Discussion SessionsA variety of discussion sessions are held throughout the year, including President-Manager discussions, discussion sessions with career-track recruits, discussion sessions between workplaces and the HR department. Efforts are made to adopt constructive opinions, requests, and to address the concerns of each employee through these communication sessions, as well as to resolve any issues that may present themselves.

—Toyota Industrial Equipment, S.A. (TIESA) [France]Toyota Industrial Equipment, S.A. (TIESA) in France held “Forum TIESA” in 2004 to share the Toyota Group’s philosopy and values as well as the company’s achievements with all its employees. This forum provided the first opportunity for all the employees at TIESA to communicate directly with general managers. The forum was received very favorably by the employees as an opportunity to think afresh about the Toyota Group’s philosopy and values. The forum is scheduled to be held every 6 months.

A Forum Concerning the Value of the Toyota Group Was Held at an Affiliated Company in Europe

Case Study

Chart 2


Article 35 of the Patent Law (concerning the system of invention by a corporate researcher) was amended and came into force in April 2005. The amendment aimed to clarify the determining criterion for the value of invention. The new law specifies that the value of the invention by a corporate researcher should flexibly reflect the situation of the company and the inventor, and that it is appropriate to leave the decision to the voluntary agreement between the company and the inventor.

Toyota Industries has reviewed this system of invention by a corporate researcher to encourage the willingness to invent and for the further development of the company.

Details of review:• Establishment of internal regulations regarding discussions between the company and the inventor (employee)

• Inform inventors (employees) of regulations established• Established system for submitting opinions and comments regarding determining value of inventions

Review of the System of Invention by a Corporate Researcher Following the Amendment of the Patent Law

In April 2004, the “ Technical Training Center” was newly opened in order to provide a better educational base for technicians who support manufacturing. A wide range of skills training and courses for obtaining safety certifications are provided at the center. The center plans to develop technicians for the entire Toyota group in the future.

Case Study Technical Training Center is Newly Opened

Development of Global Human ResourcesAiming to develop global human resources, Toyota Industries has introduced two programs. One is the Global Human Resources Registration and Development Program, which implements planned human resource development to realize the overseas corporate strategy. The other is the Global Challenge Registration Program, which supports the self-development of employees who aspire to take an active part in our global operations.

The Global Challenge Registration Program is for employees who are voluntarily improving their language ability and basic international understanding. Any employee can register for this program with the approval of their superior. Once registered, the employee can receive financial support to attend a language school or to take part in distance learning, and participate in study sessions to promote understanding of different cultures.

Business Manner Follow-upsAs the number of opportunities to be in direct contact with clients increases, and corporate ethics responsibility becomes more important, Toyota Industries is providing follow-ups concerning business manners. Employees who have attended business manner training act as manner leaders to improve manners at each workplace.

We are also promoting mutual communication by introducing many activities.

Toyota Industries has been providing Management Training once a year since FY 2004, for our 1,500 executives and managers to ensure that they are fully familiar with and understand the details of issues they should be aware of as a manager concerning human resources development, industrial relations, and compliance. Similar training is also provided to approximately 40 agents and 40 affiliated companies in Japan.

Case Study Management Training

In multi-layered education, knowledge and skills required for each layer is clearly defined according to the length of service and qualification of the employee. Then education and training are provided to suit each level. Specialized area education promotes the attainment of highly specialized knowledge and skills with the help of internal and external instructors who have extensive knowledge in their respective fields.

In addition, Toyota Industries provides a range of programs. These include a global human resource development program, the License Power Qualification Attainment Support Program for acquiring official certifications, and the Trade Certificate Attainment Support Program for acquiring both national and company trade certificates.

The training structure and all education and training are explained to all employees in the Guide to Education and Training.

Development of TPS (Toyota Production System) Human ResourcesSince the establishment of Toyota Industries by Sakichi Toyoda and subsequent management by Kiichiro Toyoda, manufacturing processes have incorporated the concepts of jidoka*1, or “automation”, and Just In Time*2. These concepts are fundamental to the Toyota Production System (TPS), which the company employs to ensure efficient production through continuous improvement. The development of human resources that will lead the company into the next generation is promoted by adhering to these concepts. There is also the TPS School, where fundamental education and practical experience are provided to strengthen human resource development.

*1 Jidoka is a feature of the manufacturing process where machines and lines stop automatically when machine trouble or a defect occurs.

*2 Just-In-Time is an original Toyota Production System concept whereby only the necessary quantity of products is manufactured when required

Development of Young Technicians“Manufacturing is about developing people.” Based on this idea, Toyota Industries has long been addressing the development of young technicians who have both highly advanced and practical skills. The company established the “Gino Senshu Gakuen (Technical Training School)” in 1982 where training is provided in three areas, namely the academic training to acquire knowledge, practical training to acquire skills, and mental training for character building. 1,267 employees have completed the course as of the end of FY 2005, which accounts for approximately 20% of technically oriented employees.

Technical Training Center (in the grounds of the Obu Plant)




Supporting Balance between Family and WorkDeclining birth rates, an aging society, and the increasing prevalence of nuclear families have led to an increasing number of cases where the company’s employees are the supporter of children and care provider for an aged person. An increasing number of employees have to engage in child raising and nursing care for the elderly due to the declining birth rate, aging society and spread of nuclear families. Toyota Industries is actively involved in creating programs and encouraging a workplace culture that enables employees to balance their family and workplace commitments, without having to sacrifice one for the other.

Furthermore, in response to the implementation of Policies and Measures to Support Fostering Next-Generation Youth (effective from April 1, 2004), which clarifies the responsibility of the central and local authorities, business proprietors, and citizens to ensure an environment where the next generation of youth can be born and grow up in good health, Toyota Industries has formulated the Action Plan (2005 – 2007) in accordance with the guidelines stipulated in the law to further improve the employment environment to ensure balance between child-rearing and work.

Family-Work Balance ProgramsAs part of the Family-Work Balance Programs, Toyota Industries introduced the Child Care Leave Program in 1991. A total of 347 employees have utilized this program as of August 2005.

The period for child care leave was extended in 2003 until the child reaches two years of age. After this change, the number of employees on leave for more than 1 year accounts for approximately 40% of employees on leave. In principle, employees coming back from leave go back to their original workplaces. Male employees are also encouraged to take child care leave via participation in a training program.

In addition to the child care leave program, Toyota Industries has introduced the Emergency Child Care Leave program in 2003 to enable employees to take a leave of absence in case a child is ill or injured in an accident.

Encouraging a Workplace Culture that Supports the Family-Work BalanceIn order for the various support programs to balance family and work to function effectively, a workplace culture is needed that makes the utilization of these programs easier. For example, in order to promote utilization of the child care leave program, employee concerns regarding returning to work need to be resolved as well as ensuring the superior’s understanding. Hence, Toyota Industries ensures that the details of the programs and the application process are well understood through information provided on the intranet and handbooks. In addition, when the application for child care leave is made, the employee who is applying for the program, and his/her superior, and HR Division staff meet and talk in order to improve the workplace awareness of the support programs.

Furthermore, regular communication is maintained with employees on leave through invitations to workplace recreational events, informal get-togethers, company newsletter, and other information provided concerning the workplace, in order to provide an environment that makes the employee’s return to the workplace trouble-free. When an employee returns to the workplace after a period of leave, the superior adjusts the employee’s workload to ensure a smooth return.

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Focus on Safety and Health ManagementHigh standards of health and safety at all workplaces and the health of all employees are essential for a healthy and habitable work environment. Toyota Industries is addressing health and safety management with an emphasis on the prevention of industrial accidents and illnesses.

Improvement in Health and Safety StandardsToyota Industries is continually implementing activities for the prevention of industrial accidents and creation of a pleasant work environment led by the Health and Safety Committee, according to the policy to improve the health and safety standard based on the Occupational Safety and Health Management System (OSHMS)*.

In FY 2005, the company proceeded with its effort to improve the health and safety management standard by establishing the OSHMS and to promote activities to build OSHMS at affiliated companies. Each department was assessed and progress status verified in terms of the OSHMS establishment. Emphasis was placed on core

Toyota Industries also has other measures, such as a Flexible Time Program, No Overtime Day, Family Day, and a Half Day Paid Holiday program, in order to encourage an environment that supports balance through modulated working patterns.

BenefitsToyota Industries offers a wide range of programs in order to promote a sense of reassurance and the confidence of employees and their families through effective benefit packages. The company endeavors to provide opportunities to interact at workplaces and with families and support life plans.

Table 1

Graph 2, 3


��

��

��

��

��

��

��

��

��

�

��

��

��

��

��

��

��

��

��

��

��

��

safety activities which reduce risk factors existing in operations and facilities, rather than relying on the attention of the operator, and on improvement to the work environment by addressing the issues of dust and noise. For affiliated companies, training and guidance are provided for the establishment of OSHMS.

As a result of these activities, Toyota Industries is maintaining a lower rate of industrial accident occurrence than the industry average.* The Occupational Safety and Health Management System is a safety and health

management framework that aims to reduce latent dangers that exist in the workplace and improve the standard of workplace safety.

Employee HealthToyota Industries aims to better equip its employees and workplaces to cope with risks such as aging and increased stress, and is promoting health activities that include prevention of lifestyle-related illnesses and mental health care.

Prevention of Lifestyle-Related IllnessesToyota Industries is implementing a broad range of programs aimed at preventing lifestyle-related illnesses among employees. These include health education such as health improvement seminars and backache prevention classes, as well as various events such as hiking and non-smoking campaigns.

In FY 2004, the company established the Employee Health Promotion Committee in collaboration with the corporate

health insurance society and the labor union to actively promote educational activities. Toyota Industries is committed to promoting employee health across the board.

Promoting Mental HealthAs for mental health care, Toyota Industries focuses on prevention, early detection and care.

Mental health education is included in the layered education for newly-appointed managers, and workplace counselors are appointed at 19 model workplaces, achieving steady results. Specialist consultation services are provided both internally and externally so that employees can talk freely to someone about their problems.

In addition, a company-wide meeting was held concerning mental health during the industrial health week to help each employee detect stress and take early action to resolve the situation. Educational articles were also published in the Monthly News section on the intranet as a 12-part series.

In parallel with these activities, efforts are also made to provide an environment where employees who have been away from work find it easier to return to the workplace. As part of this effort, the Preparatory Work System was introduced on a trial basis in September 2004.

This system allows for shortened working hours (i.e., work in the morning only) for a specified period (based on the judgment of an industrial physician) to reduce the psychological burden on employees when they return to the workplace after a long absence, by gradually re-acclimatizing them to the normal working pace.

Management of Working Hours and Encouragement to Take Paid Annual HolidaysToyota Industries is endeavoring to manage working hours and encouraging the taking of paid annual holidays for the continued health of employees and to ensure efficient business operations.

With regards to working hours, excessive working is prevented by maintaining close communication about work matters with superiors and by reserving a day to leave work on time.

When overtime worked exceeds 40 hours in a month, the employee concerned is encouraged to fill in a questionnaire and consult an industrial physician for advice and guidance. When overtime exceeds 60 hours a month, or overtime exceeding 40 hours a month continues for 4 consecutive months or more, a health check and consultation with the industrial physician is given to check the mental and physical health of the employee.

Toyota Industries also encourages employees to take paid annual holidays in a planned manner. The average number of days taken in FY 2005 was 18.3 days.

Support for Employees on Overseas AssignmentAs the globalization of workplaces progresses, the importance has grown of managing the health of employees on overseas assignment. Toyota Industries provides medical examinations before, during and after the overseas assignment for employees as well as their families. In addition, industrial physicians of Toyota Industries visit overseas workplaces on a regular basis to provide health consultation.

Toyota Industries provides site checks and guidance for affiliated companies both in Japan and overseas (13 companies in Japan and 9 overseas) in order to improve their health and safety standards. A compliance workshop was provided to the domestic sales agent of TOYOTA Material Handling Company (industrial vehicle business). In addition, study sessions were provided for 13 affiliated companies in Japan with a view to introduce the Occupational Safety and Health Management System (OSHMS) at affiliated companies. Toyota Industries will provide support on a continuous basis for the establishment of the system. The company will also provide guidance to affiliated companies overseas to introduce the system.

Case Study Supporting Health and Safety Activities at Affiliated Companies


Responsibility to the Stakeholders of the Toyota …...Toyota Industries considers measures to...

Documents

Transcript of Responsibility to the Stakeholders of the Toyota …...Toyota Industries considers measures to...