Generally, automakers save money by producing vehicles in the markets where they’ll be sold. But apparently Toyota hasn’t quite found this to be the case with its plant in Georgetown, Kentucky.
The president of the Kentucky factory painted workers a scary picture of the situation earlier this month. It’s more profitable to build a Camry in Japan and ship it to Kentucky than build one at the Toyota factory in the state, Wil James said in an internal video discovered by Bloomberg.
James said that Toyota plans to keep investing in the plant for the next 30 years, but only if cost cutting can be achieved. Workers will learn more about efforts to reduce costs in the coming weeks, the plant president said.
“I’m not sharing this to scare you, but to heighten your awareness of the current risk we now have,” James said. “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 is looking to cut production costs in order to invest heavily in electrification, autonomous cars, and other technologies. Earlier in the year, Toyota President Akio Toyoda set up a team make sure any new investments are matched by cuts to other areas.
Moving to the Toyota New Global Architecture will help the automaker dramatically decrease production cars. Toyota’s Tsutsumi plant in Japan was the first factory to adopt the flexible new production method, which helps explain why it’s less expensive to produce a Camry at that plant than in Kentucky, Toyota spokesman Rick Hesterberg told Bloomberg in an email. In June, Kentucky began producing the new 2018 Camry on TNGA.
Those who support the United Auto Workers call the video that was shown to workers a way to prevent union sentiment from brewing. Hesterberg, however, said “We’re here for the long term. In keeping with a long-term mindset, cost competitiveness is always top of mind.”
Source: Bloomberg
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