It’s never a good thing to hear the words “cost-cutting” but that’s pretty much what some Toyota workers in Kentucky have to do if they want to keep their jobs.
It’s hard to believe that it’s cheaper to make a product in Japan and export it for sale to the United States then it is to build the product in the United States in the first place but according to Bloomberg on their report on Toyota of Kentucky they dropped earlier today (Nov. 20, 2017) that’s exactly the facts. In a two minute internal video Bloomberg obtained and addressed to factory workers at that Toyota plant made by the plant’s president, a spirit of heightened awareness was the main takeaway from the video.
“I’m not sharing this to scare you, but to heighten your awareness of the current risk we now have.
In his internal video, he promises that Toyota doesn’t plan to close the factory and actually plans to invest in it for the next three decades but all of those claims lie on the fact that they will be able to make improvements in cost reduction and efficiency while keeping the same quality and safety records that Toyota demands.
It is no secret that Toyota is pouring large amounts of money into research and development, money presumably well spent in the fight to stay on the cutting edge of what their customers will need from Toyota in the future. To do that, Toyota must find money in all sorts of places within their company, and that means slimming down.
In Toyota’s latest report to its investors, Toyota states a shift in where their research and development will take them, namely automated driving, electrification of its engines and connectivity of its cars to either each other or other networks. Presumably, all that research will need large amounts of money.
It is sort of good news that Toyota is willing to let even their American factories in on their cost-cutting strategies.
It’s a bit of tough love but is a stark reality of the times. If it makes business sense to make a car elsewhere at the exact same quality, if not better, and for cheaper, why wouldn’t Toyota do that?
It’s now up to the workers to brainstorm ways that they can justify their existence to their bosses in Japan.
