Toyota Camry Is Cheaper To Produce In Japan Compared To The US – THIS IS A PROBLEM
Kentucky Plant Will Be Restructured In Some Way Despite The $1 Billion Investment
Published December 6, 2017
In the wake of Trump’s largest push to ensure foreign investments in the country, the president of the largest Toyota plant in the world – the one in Kentucky, revealed that it is cheaper for Toyota to produce the Camry in Japan than in America.
Despite the fact that the last Camry became the most American car currently in production, plant president James said they risk a lot with continuing production on US soil. He shared this information with plant workers, obviously subtly informing them of some inevitable changes that will come their way.
“I’m not sharing this to scare you, but to heighten your awareness of the current risk we now have. 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.”
In short, Kentucky plant has to diminish some of the extreme production-related costs. They already did it in the Tsutsumi plant in Japan with the introduction of the cost-cutting production system.
Toyota Kentucky Plant Workers Warned
Interestingly enough, Toyota did invest $1 billion in the Kentucky plant. Yet, the investment did not prepare the company for the cost-cutting production system. If it did, freed up cash would end up in the Research and Development division for electrification and artificial intelligence. Obviously, this is a big part of the car world of tomorrow and companies have to seek out new ways to challenge the issue. In that regard, we may actually expect some serious changes in the short-term. They could make the largest Toyota plant eligible for acceptance of the new cost-cutting production system.
I still do not know will this affect the number of workers or the salaries at the company. Yet, Kentucky plant is a secure place for Toyota production. Latest investment transformed the production lines and prepared workers for Toyota’s New Global Architecture. This platform will underpin a number of new models.
Let’s get back to the business at hand.
It seems that Toyota may have a rather serious problem. They have to find a way to cut the production costs at the plant.
Harley Shaiken, a labor professor at the University of California Berkeley commented the issue – “Toyota is trying to make the choice not between joining a union or not, but between voting for a union or having a job.”
Will James even added this – “If you can make more profit from a Tsutsumi Camry than a Kentucky-built one, which plant would you pick to build it?”
All of the information included here was spruced from a video obtained by Bloomberg.