Toyota Executive Leaving After Sexual Harassment Accusations

The president and CEO of Toyota Motor North America, accused last week in a sexual harassment lawsuit, is leaving the post, the automaker said Tuesday.

In response, the world's No. 2 automaker chose its first American as president of the region's operations.

Hideaki Otaka, 65, who had been scheduled to leave his post in June, has voluntarily left earlier. He said his staying on went against the company's interests, but said he was innocent of the charges.

Jim Press, now president of Toyota Motor Sales USA, Toyota's U.S. sales unit, will replace Otaka as president.

Otaka was accused in a $190 million sexual harassment lawsuit filed last week in New York. In that lawsuit, Sayaka Kobayashi accused him of harassing her when she worked as his personal assistant, making repeated unwanted sexual advances after she began working for him last summer. She said the conduct continued until winter, when she was involuntarily transferred out of the job.

Toyota Motor Corp.'s (TM) U.S. unit also named Yuki Funo, 59, now chairman of Toyota Motor Sales, as the new chairman and chief executive of Toyota Motor North America, which oversees the company's manufacturing and sales operations and 31,500 employees in the United States, Canada and Mexico. Press reports to Funo, according to Toyota.

Press, 59, joined Toyota Motor Sales in 1970, and worked in advertising, customer services, marketing, product planning and distribution. He has served as president of Toyota Motor Sales since June 2005 and is a managing officer of Toyota in Japan.

Toyota said it will strengthen measures against harassment and discrimination, including thoroughly reviewing Toyota's practices and increasing training for senior executives to prevent misconduct.

"At Toyota, we have zero tolerance for sexual harassment or discrimination of any kind," said Toyota Motor Corp. President Katsuaki Watanabe, adding that the company hoped to build its reputation for excellence under the new North American team.

Toyota said former U.S. Secretary of Labor Alexis Herman will head a special task force that will study company practices to make sure they comply with anti-discrimination standards. Herman, who also chairs the board advising Toyota on diversity, will report its findings to the presidents of Toyota's U.S. affiliates, it said.

The sexual harassment allegations come at a time when Toyota is briskly boosting sales in North America on a solid reputation for mileage and quality. Some analysts say Toyota is on track to overtake General Motors Corp. (GM) as the world's top automaker in the next couple of years.

Kobayashi's lawsuit said Otaka manipulated her travel and work schedules so they were alone together, had her accompany him to social functions, and groped her at a Washington D.C., hotel and in New York's Central Park.

When she reported the inappropriate conduct to Toyota officials, they urged her to work it out privately with her married boss, the lawsuit says. Kobayashi, 42, said that as a result of her complaints she was removed from the job and told she could either leave the company or return to a former position in the planning department.

Toyota, which is also targeted in the lawsuit, has not commented on the lawsuit.

"While I expect to be fully vindicated in the recently filed litigation against Toyota and me, I have regretfully come to the conclusion that my continued service as president would serve as a distraction and ultimately not be in the interests of the company," Otaka said.

Japanese companies have often been castigated for their slow cultural changes regarding views on the role and advancement of women in the workplace.

Sexual harassment cases are still relatively rare and Kobayashi's lawsuit has been viewed with alarm and surprise by the Japanese media, partly because of the amount of her claim.