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.
Toyota is struggling to sell trucks and SUVs like everyone else, but unlike the competition, no full-time workers from stalled factories are getting laid off. The 4,500 workers at idled plants are instead bettering themselves through eduction by taking classes on safety, diversity, and Toyota history. They're also doing community service while on the clock and even some gardening. The workers will be learning how to work faster and smarter during the down time, and are even being shifted to busier plants on a temporary basis to help plants that are working beyond capacity to keep up with demand. Toyota's plan to keep its workers busy at all costs isn't cheap, as about $50 million is being spent to keep workers busy with training programs. Of course, you can't please everyone and the plan isn't sitting well with all of Toyota's workforce, as workers at running factories don't like the fact that laid off workers are getting a leg up on training. A more skilled plant could have an advantage over others in getting earmarked for future products, so unaffected workers also want the extra training. While expensive and a bit of a logistics nightmare, Toyota's plan is a good one if you can afford it. It should help create a more loyal, better trained workforce that also forges ties with the surrounding community. We bet Toyota hopes it will prevent any talk of unionizing, as well. And with Toyota's record profits over the past few years, $50 million is a drop in the corporate bucket.
The Toyota Tundra is the most competent pickup Toyota has ever produced, but the two-year-old truck has been hit hard by the harsh reality of the US auto slump. Gas prices and a sluggish housing industry have conspired to put a wet blanket on the Tundra party, and the San Antonio plant will be closed from August 8 until mid-November to allow dealers to clear out Tundra inventory. When the Texas plant does come back online, a portion of its production could wind up overseas.
At the Management Briefing Seminars, Toyota Motor Manufacturing Kentucky Inc. President Steve St. Angelo said some Tundras and Sequoias could be produced in the US and shipped overseas. While markets like Europe and Asia aren't likely to turn to trucks and SUVs in large numbers, both the Tundra and Sequoia could be a welcomed addition in the Middle East, where cheap gas prices makes big vehicles more acceptable. While the overseas truck market isn't likely to produce huge demand for the Tundra and Sequoia, the currently untapped markets could help the San Antonio plant come closer to running at its peak efficiency.
Toyota posted a 10% sales decline for its bread-and-butter brand of over the month of June, with numbers that are even worse -- an 11.5% drop -- when the Scion and Lexus brands are added into the equation. In response to these very un-Toyota-like sales declines, the automaker is now revamping its vehicle production in the States. Though it has already introduced measures to slow the production of full-size Tundra trucks and Sequoia SUVs, reports indicate the further cuts will be made at the San Antonio truck plant. The Indiana plant, which also produces Tundras, will see workers transferred to other lines where more popular vehicles are assembled. Even plants in Japan that export vehicles to the U.S. could be affected. Toyota is hardly used to seeing double-digit drops in sales in the U.S., so it will be interesting to see how the giant Japanese automaker responds in the months to come.
The full-size pickup truck woes continue to worsen, leaving even mighty Toyota little choice but to slow production of its Tundra model. In fact, Toyota's brand new plant in San Antonio that was built just for the Tundra will be shutting down a total of 14 days between now and October. Full-time workers at the plant will be able to use vacation days, take the time off unpaid or find something else at the plant to do while the assembly line is halted.
Unfortunately, temp-to-hire workers aren't so lucky. Two-hundred employees who were hoping to land full-time positions at the plant will be laid off this summer. Toyota spokesman Mike Goss says, "We have a very long-term view of that factory in Texas. We're trying not to overreact. We're trying not to shut it down." Whoa... back up. Shut it down? We hadn't heard any such thing until it was spoken by Goss. Sounds like things are just as bad for Toyotas with beds as they are for pickups from Detroit.
As of today, production of the Tundra full-size pickup is split between Toyota's facility in Princeton, Indiana, and the automaker's brand new San Antonio plant in Texas. According to a Wall Street Journal report, Toyota is considering moving all production of the Tundra to just the Texas plant. Just over two weeks ago, Toyota announced it was slowing production on the Tundra (and Sequoia) due to lagging sales. The move to consolidate all Tundra manufacturing in one location may be seen as a sign Toyota only expects to sell 200,000 full-size units or less this year, as that number represents the production capacity of the Texas facility. You may remember that Toyota boldly claimed it would sell 200,000 units of the Tundra in 2007, the newly redesigned truck's first year of sales. It missed that target, but not by much with 196,555 units sold. Toyota hasn't officially commented on the rumor yet, but we'll let you know when it breaks the silence.
