Camry... Made In Kentucky
Friday, October 13, 2006SUSIE GHARIB: Gasoline prices may be sliding, but Toyota says demand for its gas-electric hybrids is not. That's why the Japanese auto maker is now building hybrids in Georgetown, Kentucky, its largest North American plant. Building near the buyer is a strategy Toyota has followed for decades and as Diane Eastabrook reports, Toyota has plans to expand that concept.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Toyota's first American-made Camry hybrid was greeted by cheering workers at its Georgetown, Kentucky plant this week. After selling more than 400,000 Japanese-built hybrids in the U.S. over the past six years, Toyota decided its largest North American plant should help build what could become its most popular hybrid ever.
DONALD ESMOND, SENIOR V.P., TOYOTA MOTOR SALES USA: At these kind of volumes it's no longer a niche. I think it's mainstream. I think the customers have answered and they like hybrid technology.
EASTABROOK: Toyota invested $10 million in its Georgetown plant for the hybrids. It has the capacity to build nearly 50,000 of the vehicles annually and expects it will build that many.
GARY CONVIS, EXECUTIVE VP, TOYOTA NORTH AMERICA: The time on the showroom floor is extremely short. So the demand is there. We just don't have enough product yet to fill that demand.
EASTABROOK: Thanks to hot technologies and designs, Toyota is growing at a time when its U.S. rivals are shrinking. Over the next couple of years, the Japanese auto company will open three new plants in North America to build an additional half million cars and pick-ups annually. Perhaps no other plant better reflects the breakneck pace of growth at Toyota than Georgetown. This plant has the capacity to build a half million Camry's, Avalons, and Solaras a year. But last year, demand for those vehicles was so strong, production exceeded capacity.
But industry watchers caution growing too big, too quickly carries risks. Last year Toyota recalled more than 2 million vehicles in the U.S., its largest recall here ever. Some experts fear that could indicate problems in recruiting and training as the company grows.
JAMES SCHRAGER, MGT. PROFESSOR, U. OF CHICAGO GSB: The Toyota system which looks fairly straight forward as you're standing in front of a gleaming car, has a lot of moving parts all around people. It's people that run that system. It's people that build those cars.
EASTABROOK: But Toyota claims attention to training and recruitment is not being compromised as it expands.
CONVIS: We devote a great number of resources to doing it well and doing it right and I'll guarantee you, we will not over-race our capacity to build in quality at these new operations.
EASTABROOK: Many analysts think Toyota could eventually become the largest auto maker in the U.S., unseating General Motors. But Convis argues that is not the company's goal. He says Toyota wants to build products like the Camry hybrid, that Americans want to buy. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Georgetown, Kentucky.
