Toyota has begun production of the 2011 Sienna minivan at Toyota Motor Manufacturing, Indiana (TMMI) in Princeton. Fully redesigned for North American buyers, the model was styled at the automaker’s Calty Design Research Center in California and developed at its technical centre in Michigan.
The Sienna joined the Highlander – production of the SUV began in the US last October, replacing imports from Japan – and boosted output at the plant which, Toyota said, had been “underutilised during the current economic downturn”. The Highlander was originally planned to be built at the currently mothballed Mississippi factory.
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Improvements made by the 4,200 workers at Indiana assured successful Sienna and Highlander production launches, Toyota said.
“Already grappling with the sales impact of escalating gas prices following Hurricane Katrina, the plant faced an uncertain future when the banking and housing crisis brought the economy to its knees and the auto industry with it,” the automaker said.
After the credit crunch started to bite in mid-2008 Toyota found it had significant overcapacity in North America and began to make changes such as consolidating production of the Tundra full-size pickup – originally built in Indiana – into its then-new Texas factory outside San Antonio, shifting the Highlander to Indiana for a late 2009 output start and planning to complete the then under-construction new Mississippi plant but not fit it out with production equipment until sales recovered. That plant, eventually, will build the Prius for North America.
Toyota ended 2009 with US sales off 20.2% year on year to 1.78m, according to WardsAuto.com.
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By GlobalDataBefore starting Highlander production last October, TMMI was temporarily left with only two vehicles – the Sienna minivan and the Sequoia full-size SUV – on its pair of assembly lines and consequently was significantly over-staffed for more than one year, Toyota said.
“Without a doubt, our team members were worried,” said TMMI head Wil James. “Layoffs were happening all over the auto industry. It would be many months before Highlander production began. As a result, half of our team members were not building vehicles.”
Toyota spent about $450m to upgrade the plant for the new SUV and minivan and said the plant’s outlook had improved dramatically now the new models are on the lines.
Unlike the Detroit Three, which usually hire and fire – in accordance with union agreements – as demand rises and falls, TMMI and other Toyota plants in North America (including San Antonio, which closed for three months), “capitalised upon the skill and know-how of team members rather than conduct layoffs”.
“It made more sense to further invest in our experienced team members,” James said. “We refocused our work. When we weren’t building vehicles, we were preparing for a brighter future.”
TMMI implemented a training programme to give workers a deeper understanding of the Toyota Production System and fundamental auto manufacturing skills. The anticipated result was even stronger application of this knowledge to the production line, it said.
Texas staff also performed work in their local community, such as painting park benches.
“It’s difficult to roll out such comprehensive training when the line is moving,” James said. “Our company spent a lot of time developing the best way to do every job in the plant, so the downturn was actually a great opportunity to complete this training in order to sharpen our skills.”
TMMI also encouraged team members to further kaizen, a Japanese term for continuous improvement. No ideas for improving processes and reducing waste were too small; hundreds of improvements were implemented resulting in an estimated savings of more than $7m.
Other worker ideas bolstered safety and ensured consistent quality. For example, the installation of the lower front console on the new Sienna put the assembler in an awkward position. Colleagues found a small power tool that ensured the console snapped securely in place every time while eliminating an ergonomic issue.
“Our team members know better than anyone else how to do their jobs and they always have the flexibility to change processes in order to improve safety, quality and efficiency,” James said. “Again, big improvements are difficult when the line is running. But the downtime allowed for significant advancements.
“The power of more than 4,000 people working together on this type of activity is incredible. Our decision to fully utilise our team members was expensive, but it’s paying off already. Currently, our quality is much better than it’s ever been and our safety is among the best in Toyota.”
Toyota offset some of the cost by adopting a “shared sacrifice” approach, including the elimination of executive and salaried staff bonuses, executive pay cuts, production team member bonus reductions, overtime elimination and a hiring freeze.
“These were responsible, step-by-step measures designed to help us protect employment security and strengthen our company over the long term,” James said. “Now, as the market slowly returns, we are in a great position.”
Toyota currently operates 14 manufacturing plants in North America, employing about 41,000 in total. It produces 12 models there plus engines, transmissions and many other parts.
