Page 65 - Toyota Under Fire

TOYOT A UNDER FIRE

Toyota manufacturing team member has been involuntarily laid
off. Unfortunately, NUMMI, the joint venture with GM, had to
be shut down when GM declared bankruptcy and walked away
from its obligations to the venture and its workers (see page 35
for a discussion of NUMMI). NUMMI’s loss was ultimately a
gain for San Antonio, Texas, where the Toyota plant took over
production of the Tacoma and added more than 1,000 jobs, and
eventually for Mississippi, where the Blue Springs plant, whose
opening had been delayed when the recession hit, took over pro-
duction of the Corolla, creating 4,000 jobs in the process.*
It is interesting to note that the media seemed to respond
with indifference or even negatively to this no-layoffs strategy
during the recession. For instance, an article in Automotive News
lamented, “As Losses Mount, No Bold Plan at Toyota.”† The ar-
ticle criticized Toyota for its outmoded policy of “slow organic
growth” (which is somewhat ironic, given the attention that
would be paid to the company’s “growing too fast” just a few
months into the future), noting that the company hadn’t can-
celed new model introductions, closed down plants in Japan,
laid off large numbers of people, or shifted R&D to lower-wage
countries. Radical restructuring and massive layoffs were the only
plans that made sense to many of the people covering the indus-
try. For Toyota, letting go of workers who had received years of
training in continuous improvement and problem solving would
be self-defeating. It was these well-trained, experienced employ-
ees that the company needed if it was to find ways to cut costs
and improve efficiency.
* Chester Dawson, “Toyota Revives Dormant Plant,” Wall Street Journal, De-
cember 27, 2010.
† Hans Greimel, “As Losses Mount, No Bold Plan at Toyota,” Automotive News,
March 2, 2009.

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