Toyota's Tundra & Sequoia Are Out Of Production For Now
Wednesday, September 24, 2008SUSIE GHARIB: Toyota (TM) has slammed the breaks on production of its Tundra pick-up and Sequoia sport utility because of sluggish sales. Production of those vehicles will resume in mid-November, but while assembly work on those products has stopped, the workers who make them are still on the job. Diane Eastabrook explains how Toyota's strategy to keep workers busy during a shutdown could pay bigger dividends down the road.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Todd Brackin isn't performing a Japanese mime dance.
TODD BRACKIN, INSPECTION TEAM MEMBER, TOYOTA: Twelve, seven.
EASTABROOK: Brackin is actually part of an inspection team learning how to save time and improve vehicle inspections at Toyota's Princeton, Indiana, manufacturing plant.
BRACKIN: We're learning how to look at our individual jobs and finding where there's error, where there's room for improvement and where we can have cost savings.
EASTABROOK: Roughly half of Toyota's 4,500 Princeton workers are now retraining while the assembly lines they normally work on sit idle for three months. In August Toyota temporarily halted production of the Sequoia sport utility and pulled the plug on production of the Tundra pick- up in Princeton because of stagnant sales and bloated inventories. So until production starts again, workers on those vehicles are sharpening installation techniques and other parts of the plant where Sienna minivans are still being built, and spending time in makeshift classrooms learning or relearning better ways to do their jobs to prevent injuries.
UNIDENTIFIED MALE: I'm really not square to my work either, right? He's looking this way, but he's working over here. That's why we get the side bin.
EASTABROOK: Toyota has never idled production and retrained workers at any of its plants in North America, but it has in Europe and Asia. The company says in those instances, productivity, quality, and safety all improved once assembly lines began running again. Norm Bafunno is the Princeton plant's senior vice president of manufacturing production and quality planning. He admits it would be cheaper for Toyota to lay off workers during the shutdown, but he says in the long run, that could be more expensive.
NORM BAFUNNO, SENIOR VICE PRESIDENT, TOYOTA: Well, we look at the dollars and cents, it's one element. But it's also the element of how competitive are we going to be long term? And we're trying to position our company through this downturn, the expenditure that we're making in wages and training to position ourselves to be a higher-performing company in the future.
EASTABROOK: Experts say there is another compelling reason why Toyota is retraining rather than idling workers. James Schrager, management professor at the University of Chicago's Graduate School of Business, says Toyota's strategy encourages worker loyalty and discourages the United Auto Workers union from organizing the plant.
JAMES SCHRAGER, MANAGEMENT PROFESSOR, UNIVERSITY OF CHICAGO: And when the union comes knocking on the door, the Toyota folks will be able to make their pitch: We match benefits, we match wages, but we have job security.
CHARLIE WONNELL, ASSTISTANCE QUALITY MANAGER, TOYOTA: You guys are getting pretty consistent. And the key is, you're learning the challenges of the times here.
EASTABROOK: Back at the inspection area, assistant quality manager Charlie Wonnell is pleased by his team's progress. He's also optimistic the tools team members are getting now will improve their performances later.
WONNELL: Truly, when they get back on the line and apply it on the floor, they'll be able to better understand where there might be waste and opportunity for improvement.
EASTABROOK: Toyota managers in Princeton are confident that once the U.S. economy improves, sales of their vehicles will improve as well. And they're confident the workers at this plant will be better prepared to meet the demand. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Princeton, Indiana.
