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Toyota Tells Camry Plant Employees to Cut Costs — Now

Cheaper to build Camry in Japan and ship it to U.S.

by on Nov.21, 2017

Employees at Toyota's Georgetown, Kentucky, plant were told that they needed to find ways to cut costs at the site.

Employees at Toyota’s largest plant in North America were just delivered a message from Japan: cut costs or lose jobs.

The company’s plant in Georgetown, Kentucky, produces the Camry, which is the best-selling sedan in the U.S., was told in a video from the company’s plant manager that currently it is cheaper for Toyota to build the Camry in Japan and ship it to Kentucky than it is to simply build it in Kentucky.

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“I’m not sharing this to scare you, but to heighten your awareness of the current risk we now have,” Wil James, Georgetown’s plant, said in the video dated this month, according to Bloomberg News. 

He said Toyota isn’t planning to close the factory and continues to invest in it for the next 30 years. “But all of this is on the assumption that we can make as much progress in cost reduction and efficiency as we’ve made in quality and safety.”

(Toyota investing $1.33 billion in Kentucky plant. For the story, Click Here.)

In fact, the company nixed plans to invest $1 billion in a plant in Mexico after coming under fire from President Donald Trump. Later in the spring, the company announced plans to invest $1.33 billion in the Georgetown facility, much to the delight of Trump.

Toyota can build a Camry in Japan and ship it to Kentucky cheaper than it can build it in Kentucky.

The 2.5-minute long video, which was acquired by Bloomberg, feature James talking about the new urgency for employees to find ways to cut costs now that quality issues have been resolved. James also promises that more information will be coming about the company’s senior management believes savings can be achieved.

However, it’s clear that the automaker wants its U.S. employees to be a full participant in this process — or else, potentially.

The reason Toyota’s Tsutsumi plant in Japan, which also makes the Camry, produces the sedan more inexpensively is that it was the first factory to implement Toyota New Global Architecture, Bloomberg reported. That notion was reinforced by James in the video.

(Click Here for details about Toyota’s denial of plans for a new U.S. plant.)

“If you can make more profit from a Tsutsumi Camry than a Kentucky-built one, which plant would you pick to build it?” James said, adding workers would learn more about the cost gap and asked for “a lot more ideas to reach parity.”

The video may have been just the spark the United Auto Workers needed. The plant has a contingent of employees who have been pushing for a representation vote at the facility. However, recent losses in Ohio and Mississippi have left the UAW looking battered, bruised and ineffective at transplant facilities.

Some saw the video as a way to push away a lingering pro-union presence at the 9,500 employee plants. However, the threat — real or imagined — to the jobs of the workers in Kentucky may send many running to the protective embrace of the UAW.

 “It actually made people mad,” said Joe Smiddy, who works in Georgetown’s welding shop. “We’ve had a spike in the number of people coming to sign union cards.”

(Alabama, North Carolina finalists for new Mazda/Toyota plant. For the story, Click Here.)

Smiddy is a member of a committee of workers within the Georgetown plant who are pressing the UAW to arrange a vote for the union to represent them, Bloomberg reported. He declined to say how soon one may be arranged. The UAW declined to comment.

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