Toyota opens door wider for black empowerment with R42m trust
TOYOTA SA Motors (Tsam) has created an empowerment trust to which it has seeded R42 million for skills and enterprise development.
Tsam president and chief executive, Andrew Kirby, said this week that the trust would start its operations in January and its first initiative would involve supporting the training of skilled technicians in the automation field.
Kirby stressed this initiative was completely unrelated to the one launched recently by seven original equipment manufacturers (OEMs) to create a R3.5 billion transformation fund.
“That is really is to try and support the master plan in terms of being able to support black industrialists purchasing into our supply base as a priority,” he said.
Kirby said transformation was a key challenge for Toyota SA and the industry and something Toyota SA took very seriously.
“We have been accelerating the number of initiatives over the last few years, but we need to do a lot more.
“There are two aspects to it. We need to make sure that the broad-based black economic empowerment (BBBEE) scorecard does not detract from the real challenges around transformation and we also have to look at the whole value chain and not only our Toyota SA company,” he said.
Kirby said the group would look at their value chain, including all their suppliers, Toyota SA as the assembler and OEM and also its dealer network.
“We have to think carefully about how we go about this in a way that is sustainable and can accelerate the rate of transformation.
“We have more than 40 000 people who are dedicated to supporting Toyota and our supplier base and that is where the largest portion of industrialisation and growing black industrialists can take place,” he said.
Kirby said Toyota SA had achieved recent success and had 17 suppliers that it had been able to incubate, of which 10 were only black-owned. Toyota SA already had 248 black-owned suppliers, of which 101 were female black-owned.
“But there is a lot of work to be done to support that and our key approach is to localise more parts so we can also bring some transformation into the component suppliers,” he said.
Kirby added that Toyota SA had more than 7 500 employees and a number of initiatives for these employees.
He said the company’s graduate trainee programme, for example, took on about 16 new graduates every year, of which about 85 percent were African females or males.
“We have had some very good successes as we see them move up into middle and senior management and will continue with that,” he said.
Kirby said Toyota SA also had a huge training programme where it had more than 450 learnerships, including production learners and programmes to support the disabled and unemployed.
“We can’t absorb all of those people and that is our contribution to society and the industry at the same time,” he said.
But Kirby said Toyota SA’s biggest challenges from a BBBEE scorecard perspective was on the enterprise and supplier development side, where one of the key targets was to gain points for using the very small suppliers, the exempted micro-enterprises (EMEs) and qualifying small enterprises (QSEs).
Kirby said EMEs had turnovers of less than R10m a year and QSEs R50m a year.
“We already have 207 EMEs and 195 QSEs, but for us to get the full points, we need to grow that to 600 EMEs and 900 QSEs, which is enormous.
“Quite frankly that just doesn’t exist in South Africa and we are going to have to incubate a lot more of these suppliers, develop the people, have some creative ways in which we can develop more of those types of organisations.
“Unfortunately the threshold does not really work for the motor industry. That is something we really need to think about,” Kirby said.
He added Toyota SA would also from a service or even parts supply point of view look at opportunities to bring in new small suppliers.