As reported recently, even though Toyota halted Tundra production for a while, the company pledged not to lay off its workers. At a total cost of potentially $1 billion to the company, Toyota instead placed the employees in retraining and civic works programs during a Kaizen and Development Period.
What kinds of civic programs? One of them, in San Antonio, is called the City-Toyota Green Clean-Up Project, which has put up to 340 workers on the streets to "clean, paint, and plant." Factory staffers have painted curbs, picnic tables and trash cans, trimmed trees and plants, and cleaned up lots. While employees do want to get back to the factories, they're enjoying the time away and being able to give back to the city -- all the while earning their regular wages and benefits.
A second round of city improvement will begin next month. After that, Toyota expects to have all hands on deck again at the factory in November, building 2009-model-year Tundras.
Giveth, and taketh away, isn't that always the story? On the taketh away side, GM has recently lost a serious chunk of change. On the giveth side, The General received a $56 milion package of tax credits and grants to keep an SUV factory open in Ohio. It has also just received another package of tax credits from the city of Flint, Michigan to aid its investment in a factory that will build engines for the new Volt and Chevy Cruze. Approved over some constituent disapproval by the Flint City Council, getting GM to build the factory there will keep 300 jobs in the city. GM is now looking to the state of Michigan for more tax incentives.
We wrote about it earlier, just as a rumor, but it looks like an announcement is imminent: the Wall Street Journal says that Ford is going to make European cars on this side of the pond. However, it isn't merely North American plants that will be changed over, but American plants. The Journal doesn't give any further indication of where those plants might be or what those cars might be, only saying that the strategy could be revealed during Ford's Q2 earnings announcement this Thursday. But we'll say again: come on, Mondeo! (And Focus and Focus Coupe and Ka and...)
Volvo, once the success story in Ford's Premier Automotive Group, has hit choppy waters. And according to Wall Street Journal insiders, Ford is preparing to treat the Swedish automaker the same way it did the English ones: slap some floaties on it and keep the brand bobbing long enough to sell it.
Volvo made $94 million in profit in Q1 of 2007, but lost $151 million in Q1 of this year. In total, over the past two years, the once smiling Swede has lost $1.7 billion, part of which is due to exchange rates, and another is due to selling fewer cars. To combat the decline, Volvo is shedding up to a third of its work force at one European plant, and cutting back on production at another. As you would suspect, both of those plants make the largest vehicles in Volvo's lineup.
A couple of weeks ago, Ford was intriguingly -- or deceitfully -- still in "Volvo's not for sale" mode. Now it appears that Mulally has admitted to some Ford execs that Volvo is about to wear the "Needs a Caring Home" sign. Jerry York, the right hand man of Kirk Kerkorian, maintains that Volvo will probably be sold in 18 months. The way things look now, we'd be surprised if it took that long.
VW hasn't yet publicly committed to building one or even two factories in the U.S. (though it's apparently considering the South, specifically South Carolina), but is making statements that sound like it's definitely on the way. VW's head of production, Jochem Heizmann, has said that the requirements for a factory are that: it not be in a hurricane zone, it be near a major airport, and that there be "no other production car in the vicinity" -- or at least, Google Translate said that for him.
The factory that will might be coming in 2011 will also source, according to Heizmann, 80% of its parts locally, or at least, in the dollar zone, which again rules out a factory in Mexico. The first couple of years it will produce up to 150,000 cars, with full production being 250,000. The boon to whatever region is chosen should obviously be significant. The reason for all this, according to Heizmann, is that in addition to developing cars with U.S. tastes in mind, the current Passat is too expensive by at least $4,000.
Over 2006 and 2007, Ford lost $15.3 billion. Over that same time and in light of those losses, the company also shed 33,600 union workers through buyouts and early retirement. Still working through the uphill part of the turnaround, Ford has announced it wants to eliminate another 8,000 to 9,000 factory jobs through buyouts. If 8,000 workers end up leaving, that's almost 12 percent of Ford's current workforce walking out the door. They'll leave with benefits and a buyout that ranges from $50,000 to $70,000 depending on whether the position is a skilled trade. While it might seem like a lot of money, the point is that with the new labor agreement, Ford can hire new workers -- when the time comes -- for $26 to $31, instead of the $60-per-hour it pays now. The UAW figures the salary change could save Ford $1,000 per car.
Although 8,000 buyouts is Ford's target, the company is willing to accept more workers leaving. The offer has been extended to workers at four shuttered factories, and will be expanded next week to others. Those who don't want buyouts can be transferred to another factory. And if they don't accept the buyout or relocation, then they "will be placed on a 'no-pay, no-benefit leave,'" which sounds a lot less appealing than a 5-figure check.
