Handling a Downturn the Toyota Way [slideshow]

How much of Toyota's operation is financed or supported by debt?

What does Toyota's balance sheet look like? How much cash in the bank do they have?

What is their line of credit, and who provides it to them?

How much financial support does Toyota get from the Jap gov't?

How many tax breaks, loans, incentives have various US states given to Toyota?

I noticed that one of the ways was to sit down with parts suppliers early in the design process.

This reminds me of what some Australian govt. dept. did with the car manufacturers a few decades ago: banged heads together and got them to reduce the number of parts that were unique to a particular model or manufacturer. One result was that they ended up with only two different window-winder mechanisms, and those two were of a new design far superior to any of their predecessors. There were said to be significant cost savings because of the volume.

Perce

Toyota is *NOT* on the dole as Chrysler and GM are. Toyota is hiring Americans and building plants here while the Detroit Duds are exporting jobs and plants. That makes Toyota an American company while the Detroit Duds are busy stealing our tax money and raping the American taxpayer. I will NOT buy from the Detroit Duds, criminal conduct and stupidity should not be rewarded.

From the US federal gov't, Toyota is not (that we know).

Do you disagree that Toyota has recieved millions in form of tax breaks and incentives from various US State gov'ts?

And what do we know about any aid (or lack thereof) that the Jap gov't is giving domestic auto makers back home?

And in Ontario, Canada

------------------

Asian automobile manufacturers Hyundai and Toyota are planning to invest in new facilities in Mexico in the near future, primarily to assemble vehicles for the export market. South Korean-based Hyundai has proposed constructing a new facility in the port city of Veracruz to assemble trucks and buses for export to Central and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . Toyota is considering several sites in Mexico to place a new automobile assembly plant, with Queretaro state a possible location. The Toyota plant would complement the Japanese company's new facility in Tijuana, which assembles automobiles and trucks for the US market.

-------------------

Contrast that with the fact that at GM, if cost-cutting measures were attempted and would eliminate any union jobs within their plant, by union agreement, they could not be implemented. I witnessed that first-hand when I worked for a supplier to Delphi and participated in what GM calls a PICOS team (cost-cutting brainstorming exercise). When a potential cost-cutting idea was initially brought up, the first gate it had to pass thru before any further consideration or analysis was if it would reduce headcount back at the Delphi plant. If 'yes', that idea was immediately round filed.

And why, exactly, was that any business of the Australian gov't?

I thought one of the duties of government was to work for the benefit of the people. If reducing the cost of cars was the end result, was that responsibility not fulfilled?

It was the manufacturers (and the parts supplier) that made the final decision. No coercion, the way I heard it.

Similarly, the Australian Commonwealth (federal) Govt. got the various state traffic authorities together and persuaded them to adopt uniform traffic laws. E.g., previously, in one of the states (no longer recall which) a "Stop" sign meant only "stop," whereas everywhere else it meant "stop and give way."

Would that the USA had uniform traffic laws. The number of US states makes head-banging more difficult.

Perce

Um, ok.

Why not just give cars to people then? Wouldn't that be a benefit?

"banged heads together and got them to reduce the number of parts that were unique to a particular model or manufacturer."

That sounds like coercion, like they had no choice.

Most likely accomplished by withholding federal money for road maintainence projects. Happens in the US all the time. Most notable use was to achieve a national 55 mph highway speed limit in the 1970's.

Is there a particular rule or regulation that you feel requires more uniformity?

Your use of the term "head-banging" is not common in North America. I'm not sure what you mean by it.

When used here, it usually indicates some form of frustration - as in banging one's head against a wall.

When companies treat workers as a dispensable drain on resources, is it any wonder that the workers can often be be less than fully cooperative?

Note that one of the items in the piece about Toyota's approach says that Toyota is doing all it can to retain its workers even when they are not building cars -- involving them in training programs and even sending them out to work in the community, not firing them.

Moreover, not so long ago, likely in this newsgroup, an employee (or perhaps former employee) of one of the "Big Three" said that when they suggested changes that would improve efficiency they were often treated like idiots.

Perce

That may be a chicken and egg thing. That still doesn't mean that you codify by legal agreement to make your company less competitive by design. It's one thing for people on either side to be jerks for whatever reason they feel justified (which I agree that in a non-adversarial situation should be handled by responsible people on both sides), but to formally agree to damage your company by prohibiting efficiency is economic suicide for both the company and the job-holder - especially when your competitor, unionized or not, doesn't have that millstone hanging around their neck.

Say what?

As the prior poster also stated (but you snipped):

"Moreover, not so long ago, likely in this newsgroup, an employee (or perhaps former employee) of one of the "Big Three" said that when they suggested changes that would improve efficiency they were often treated like idiots."

I could have included it or I could have snipped it - it was supporting the statement that I was directly addressing, but I left what I was directly addressing - nothing malicious in snipping it. Even so, my ellipsis showed that I had in fact snipped it - truth in posting. And my saying "...It's one thing for people on either side to be jerks for whatever reason they feel justified (which I agree that in a non-adversarial situation should be handled by responsible people on both sides)..." addressed what I was directly addressing *as* *well*

*as* his supporting statement that I snipped.

People not listening to employee suggestions is not unusual. Doesn't make it right, but it's not unique to union or non-union environments. But, again, that particular problem should be addressed by responsible people, not used as justification for creating mechanisms that put your company and jobs at a competitive disadvantage (and I don't know if things like that were the justification for that particular rule, but that seemed to be the implication).

Fair enough.

Sadly, it is not unusual. In thirty-plus years of business process consulting I've seen it destroy companies either via failure to adapt or ruination of labor-management trust.

It would be a costly benefit. Getting the manufacturers to see the advantages of cooperating as far as possible wouldn't have cost very much.

The example of the window-winder (by which I mean the whole window-raising and lowering mechanism) was, I think, only the first of many cost-saving rationalizations.

Does a car manufacturer typically design a collection of cars as a whole, with as many common parts and sub-assemblies as possible? E.g., use the same engine in the top variant of a smaller car and in the low-end variant of a larger car?

How many different brake pads do there *need* to be? Isn't there room for some standardization/rationalization?

Maybe my language was a little strong. Most likely what happened is that the govt. told them something like, "The number of different parts is unnecessary and ridiculous (especially considering the size of the market). Supposing you all sit down together and talk to each other and your suppliers and see if there aren't ways of reducing the number of unique parts and saving yourselves (and the repair facilities, which will now have to stock a smaller parts inventory) money."

Uniform speed limits, especially on the Interstates, would be a good start. I don't know whether NY has changed its speed limits since we left 5 years ago, but driving on I-95 in CT at the 70mph limit and then suddenly having to slow to 55mph at the NY state line made no sense to me. Even some states that have the same speed limit for passenger vehicles have different limits for trucks and may also have different criteria for determining to which vehicles those lower limits apply.

Some states, I understand, allow more trailers than others.

I meant it as in "banging heads together" above.

Perce

There is some of that going on. But I can tell you from an engineering standpoint that the more tightly integrated, lighter, and compacted things are made, the less commonality you can do for slightly different vehicles. By that, I mean that the more you have to engineer every ounce of weight out of and performance into a given part, the less likely that a slightly different application can use the same part (if other goals are to be met). You've decreased your safety margins down as far as your manufacturing tolerancing capabilities will allow, so the chances of *some* aspect of the part not quite working in the other application are greatly reduced. None of what I said is an absolute, but it is generally true that the more exacting design is forced to become, the less able different applications are to share parts and maintain performance and reliability goals - something will have to be compromised.

For vehicles that squeeze every last bit of efficiency (thru weight reduction, power management, etc.) for the "green" movement, the more true it will be that commonization of parts for a different but similar vehicle will be less likely.

That should have said "...so the chances of *some* aspect of the part not quite working in the other application are greatly increased...".

there are some actual good reasons for speed differences between vehicles. When i lived in Texas the speed limit was 65 for cars (which translated to texan means 85) and 55 for trucks. When loaded 18 wheelers go over 55 they tear up the roads and texas does a fairly good job of keeping their roads in good condition. And you right about NY of course NY is a socialist state where the laws are so silly that you can't even use the john in fear of using a toilet paper that's in violation of a statute somewhere.

Short answer: Worldwide, they're in about the same shape as GM. Just took out a huge loan. Also still living on the backs of Texas taxpayers who financed the ill-timed factory for the biggest gas-sucking poseur pickup on the market in San Antonio. Hard to say, we don't get to see as much of their dark underbelly as we've seen of GM's lately.

As someone else recently said, "this could be Ford's time in the sun."