Business and the Economy
Normalcy Returns to Toyota Plant
On Monday, things went back to normal at Toyota Motor Manufacturing, Kentucky. TMMK production has returned to 100 percent, up from 30 percent production levels the plant experienced from mid-April up to last week. The Georgetown production line was hurt by parts shortages caused by the continuing impact of the March 11 earthquake and tsunami in Japan. The largest Toyota plant in North America stopped the line for two non-production days each week in an effort to conserve parts supplies.
“We are back into what we consider a normal production model,” said Rick Hesterberg, TMMK spokesman. “We are calling it 100 percent production levels with no employee overtime.”
The bounce back to normal production comes earlier than the Japanese automaker earlier projected for plants in North America.
The ramp-up comes thanks to the company finding “countermeasure activities implemented by suppliers,” said Hesterberg.
Toyota’s Japanese plants’ production levels will be at 90 percent this month, company officials have stated.
Toyota is not alone in the challenges left by the quake. Nissan Motor Corp., Honda Motor Corp. and Mazda Motor Corp. halted production after the quake and tsunami damaged some factories and knocked out power, causing shortages of parts to be built and shipped to plants around the world.
According to the Japan Automobile Manufacturers Association, the island country’s automakers produced 292,001 vehicles in April; the corresponding figure from 2010 was 731,829 vehicles.
The production slowdown has been costly to Toyota. In May, company President Akio Toyoda estimated the earthquake’s financial impact to Toyota at nearly $1.23 billion.
The company reported sluggish American sales in May, which it attributed to production shortages.
In May, U.S. sales of the TMMK-built Camry dropped 30.4 percent from the previous year, making it only the nation’s 12th-best-selling vehicle. In May 2010, just a few months after the model was in the headlines for recalls, the Camry was the nation’s third-best-selling vehicle.
Toyota expressed optimism that ramping up production in June would drive sales as new vehicles begin to arrive at dealerships.
During the production halts and recent hard times, TMMK never laid off workers. Part of the Toyota culture is to never lay off employees during hard times.
“I think that shows we are committed to what we said,” said Hesterberg. “It demonstrates as a company our commitment to long-term employment for our team members. We looked at all possible avenues to be flexible during the challenging times.”
The Georgetown plant, which builds the Camry, Avalon and Venza models, was built with a capacity for 500,000 vehicles to roll off the line each year. Last year, 370,000 vehicles were produced. It is too early to determine the number of vehicles that will be built this year, but the company does not expect 2011 production to reach the half-million mark, said Hesterberg.
Some North American plants have returned to full production more slowly than TMMK. The company reports eight of 12 North American-produced models will be at 100 percent production this month.
On the days TMMK’s production lines were down, team members could receive training, participate in plant improvements, use paid vacation time or take unpaid time off. Additionally, the plant allowed team members to use nonproduction days to help area nonprofit organizations with various tasks.
“We have done everything we can think of to keep team members active and continue to improve in areas we can improve in when production stops,” Hesterberg said.