Toyota expands -- and tends to growing pains

Lindsay Chappell | Automotive News / April 23, 2007 - 1:00 am

TUPELO, Miss. -- Toyota's frenetic growth in North America has a dark
side that worries senior executives. The company is wearing out its
engineers and manufacturing managers, causing an alarming number of
them to quit.

Now Toyota -- which last week broke ground on one plant and cut the
ribbon at another -- plans to do something about it. The company says
it will decentralize its manufacturing and engineering command and
expand its project management staff.

The restructuring is a sign of growing pains as Toyota adds plants in
North America at a pace of about one a year. Toyota's Kentucky-based
corps of project managers, engineers and supplier support staffers are
being run ragged. Midlevel managers crisscross the continent on
far-flung assignments - from Ontario to Mexico - and it's taking a
toll on the employees and their families, according to an internal
company document.

The solution: Toyota will set up regional centers on the West Coast
and in Texas by 2010. Personnel in the satellite offices will get more
authority to tend to nearby projects.

"It will keep engineers from having to travel so much," says Gary
Convis, executive vice president of the North American manufacturing
headquarters in Erlanger, Ky. "It will enable them to stay close to
home so that we're not putting so much strain on their families."

Losing people

Over the past decade, Toyota has centralized its North American
manufacturing headquarters in Erlanger, just outside Cincinnati. But
according to the company document obtained by Automotive News, the
pace of work at Toyota is proving too much for too many.

"We continue to experience high turnover" reads a PowerPoint
presentation given in 2006 by Seiichi

Sudo, COO at Toyota Motor Engineering & Manufacturing North America
Inc. in Erlanger.

According to the document, Toyota lost 5 percent of its "experienced
members" in 2006 after losing 10 percent in 2005. It is not clear from
the document how many employees those percentages represented. Toyota
won't comment on the document.

About 1,400 employees are assigned to Toyota Motor Engineering &
Manufacturing North America, including clerical staff.

The reasons for the turnover, according to Sudo's presentation:
excessive overtime and travel, an imbalance between work and personal
life, insufficient authority for managers operating in the field and
poor communication within the organization.

Sudo's presentation also said managers suffered from "lack of self
development opportunities" and an "unclear future vision."

Toyota will set up a satellite office in Fremont, Calif., to help
manage vehicle projects and supplier issues out west. The California
office will oversee Toyota's plants in Fremont, Baja Mexico, the Los
Angeles area and British Columbia. A third regional center will be
established at Toyota's new Tundra plant in San Antonio.

The satellites will report to Erlanger, but personnel stationed in
Kentucky will focus on projects in the Midwest, South and the Great
Lakes region.

Each center will have project engineers who work with suppliers and
Toyota's U.S. vehicle development teams.

More factories

Last week, Toyota officials gathered in Tupelo, Miss., to break ground
on a $1.3 billion factory that will produce 150,000 Highlander SUVs a
year. Production will start in 2010. And on Friday, April 20, the
officials gathered a second time in Lafayette, Ind., to cut the ribbon
on an assembly operation that will build 100,000 Camrys a year. The
Camrys will be produced at Subaru of Indiana's plant.

The Lafayette plant and a new factory in Woodstock, Ontario, will
bring to eight the number of Toyota assembly operations in North
America.

Toyota is expected to announce another project soon - production of an
all-new crossover at its plant in Georgetown, Ky. The company also is
ramping up its Tundra pickup plant in San Antonio and in 2008 will
launch RAV4 production at Woodstock.

Convis, who will retire in June, will have responsibility for the
satellite office program, serving in a consulting role. He will move
his office from Erlanger to Fremont. The company operates New United
Motor Manufacturing Inc., a 50-50 joint venture with General Motors,
in Fremont.

C. E. White wrote:
I didn't even have to look to know who posted this. <G>

Zzzzzzzzzzzzzzzzzzzzzz, Ker-plunk! The ripples radiate in a ring from
where the lure hits the water!

Be very, very, quiet...

"B A R R Y" <beech23pilot (AT) yahoo (DOT) com> wrote

It is just an article related to Toyotas I thought was interesting.

Did you even bother to read it? Mostly positive stuff.

Ed

Toyota has been experiencing growing pains. They had some quality issues in
the last few years. They also have had some issues with getting Americans to
buy into their company culture (like having any assembly line worker having
the power to stop the line to fix quality issues).

That they're having issues with figuring out how to manage their new
engineering staff in a different country and culture when the country is so
much bigger (land-wise) than Japan in no big surprise. The only thing that
is a bit of a surprise is that they don't use teleconferencing more. There
is nothing like sitting in the next office or cube, and being able to point
to a computer screen or paper diagram and talk about it. So some travel is
helpful. But, teleconferencing is very effective, especially if you want to
tuck your kids in at night. I used to work as a software engineer. Most of
the trips I made out to the home office where unnecessary. We could have
done it over teleconferencing without any problem. Oh well. My brother lived
about 2 hours away from the home office, so I got a free trip out to see him
and his kids.

Jeff

"C. E. White" <cewhite3 (AT) removemindspring (DOT) com> wrote

Jeff wrote:

Yeah, but at least they have been busting their asses to rectify those
quality issues, which is A LOT more than one can say for the big 3.

"High Tech Misfit" <me (AT) privacy (DOT) net> wrote

Why would you say that? All the domestic manufacturers have shown
improved quality in recent years. Even CR has noted this. In the JD
Powers Rankings, Toyota is still doing well, but the difference in
quality has been in the noise range for years. In the 2006 JDP Initial
Quality Study, Toyotas averaged 1.06 problems, the industry average
was 1.27. I doubt 0.21 problems was statistically significant. In the
2006 Vehicle Dependability Study (a study of three year old models),
Toyota finished behind Mercury, Buick and Cadillac. The average three
year old Toyota had 1.79 problems. The industry average was 2.29
problems. For people that trust CR, Camrys were claimed to less
reliable than Ford Fusions.

Toyota builds reliable cars, but the question is, how much extra are
you willing to pay to avoid 0.21 or even 0.5 problems?

Ed

It is more likely their engineers are leaving because of their poor pay
scale. Engineers and scientist in the US are in great demand. A good
engineer or scientist can name their price and Toyota is not know for paying
their US workers very well. Toyota is have problems filling all of the
positions their new assembly plants, like the one in Texas, as well.



mike

"C. E. White" <cewhite3 (AT) removemindspring (DOT) com> wrote

"Jeff" <news (AT) googlemail (DOT) com> wrote

That is probably why Toyota was number in recalls in 2006. Every
manufacturer makes some that are not up to their standards on occasion.
That is why they all offer a warranty, even Rolls Royce.

When one is selling thousands, or even hundreds of thousands of anything,
fewer of the bad once are noticed, but when you sell in the millions like
the domestics more of the bad ones get noticed

As to stopping the line, workers on domestics assembly lines can do the
same, and have been able tot do so you at least 20 years, that I know of.

mike


"Jeff" <news (AT) googlemail (DOT) com> wrote

As are friend Jeff would ask... Your source for your opinion is......... ?

mike


"High Tech Misfit" <me (AT) privacy (DOT) net> wrote