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Toyota Invests In Workers Instead of Laying Them Off
July 16, 2008

1) Guardian (U.K.) Story | 2) Houston Chronicle Story |
3) Chicago Tribune Story

I'll expand on this post tomorrow (off to bed, U.K. time) but how amazing is this illustration of the "respect for people" principle. You can treat people as expendable costs or an asset to train and invest in. Even as Toyota's truck sales have plummeted, are they resorting to layoffs? Nope!!

Even though full-sized Tundra pickup trucks won't be rolling off the production line of Toyota Motor Corp's factory here next month, the world's biggest automaker is keeping 2,000 plant workers on the payroll while it waits out a downturn in demand for its biggest gas-guzzling models.

While its Big Three U.S. rivals are shutting down truck plants and laying off workers, Toyota is hunkering down to keep its foothold in the heart of U.S. truck country.

Toyota will suspend Tundra production at its sprawling San Antonio factory in early August for three months due to slow sales, which are down nearly 50 percent for the first six months of 2008 versus a year earlier. Record U.S. gasoline prices over $4 a gallon have sent consumers scrambling for smaller, more efficient models.

But that doesn't mean the plant's workers won't be busy.

"Team members will continue to report to work and will continue to work as a two-shift operation, and they will continue to be paid 100 percent of wages," said Toyota spokesman Mike de la Garza.

But instead of building trucks, workers will spend their time in "training and development, to continue quality improvement activities, and to perform community service work," Toyota said.

The Tribune article points out that over 4,000 workers in Indiana won't be laid off while that plant is retooled from trucks to smaller SUVs.

From a Business Week article:

"This is not an inexpensive proposition to pay them for no production," Toyota spokesman Michael Goss said Thursday, but the company wants workers ready when production resumes. "We have a long-term optimistic view of the truck. It's going to take some time to get through this economic downturn." (The Guardian)

Many people would look at this story and think Toyota's being stupid, right? Not the "Lean thinkers" out there, though. Bravo to Toyota.

Note: Toyota *did* layoff 200 temporary workers. But that's different, right?

Posted by Mark Graban on July 16, 2008 | Comments (0)