Toyota is the most successful automaker on the planet, with monstrous profits and vehicle sales. A big reason for that success is the Japanese automaker's sterling quality image, and Toyota is boosting volunteer overtime pay at home to keep workers happy. The move to increase OT came in part because of mounting pressure over the Japanese culture of "service overtime", a practice which courts say led to the death of a 30 year old worker due to overwork. Toyota had been paying for only two hours of Quality Control Circle meeting hours per month, even though meetings are more frequent than that. Toyota has proven to be tough opponent for other automakers, and workers that are willing to sacrifice time free of charge certainly helped. At least now hard-working employees can still be just as dedicated as before, but with a little more money in the paycheck as a reward.
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Reader Comments (Page 1 of 2)
Eric Biran @ May 24th 2008 2:54PM
This is great news for Toyota employees burning the midnight oil, but won't increased pay *encourage* more overtime? This would seem to only give increased incentive for people to overwork themselves, if that is already a problem.
Mike Lee @ May 24th 2008 3:09PM
Man(!)... I really admire Toyota for doing this ("...and Toyota is boosting volunteer overtime pay at home to keep workers happy."). They're doing something for their employees that Wal-Mart wouldn't even consider. In fact, Wal-Mart would close and lock the store's doors before they'd ever do something as nice for their associates. Believe me, I know. I just left Wal-Mart(!).
Aprime @ May 24th 2008 3:46PM
Which did often did when we tried to unionize their stores in Canada.
Jim @ May 24th 2008 3:35PM
at least one automaker is being good to their employees. You know whats sad, My uncle just bought a new Chevy truck and he opened the door, and the car spec sticker said that it was put together in Mexico....wtf...meanwhile my mom Toyota Camry says made in America. Thats messed up. Guess when you buy american, you support the illegals. o well.
paul34 @ May 24th 2008 3:42PM
Oh yea. Those darn illegals getting checks from the Economy of Mexico, inc. every month!
Aprime @ May 24th 2008 3:47PM
Chevy Truck made in Mexico?
Is the HHR a truck now or is the Vue a Chevy?
Or perhaps you got your hands on the next-gen Aveo early, but calling it a truck?
MajorGeek @ May 24th 2008 4:04PM
Support the illegals? You mean Americans are illegally crossing the border into Mexico for the great paying jobs and free flowing delicious water? Oh, wait....
the friendly grizzly @ May 24th 2008 4:27PM
"...sterling quality image". Image is everything, right?
dakota @ May 24th 2008 4:38PM
Maybe if Aprime would actually do some homework, he'd figure out that GM's Sialo, Mexico's assembly plant produces:
Avalanche, Suburban, Escalade ESV, Escalade EXT, Yukon XL.... 2 of those are Chevy models....
Mike Lee @ May 24th 2008 4:48PM
You're right. And so does VW build cars in Mexico. Don't be surprised to see even more cars and trucks built down there. It's more economical for the manufacturers (unfortunately for workers here in the U.S.).
tenl @ May 25th 2008 5:04AM
And Toyota as well builds their Tacomas in Mexico. So if they all do it, might as well keep the profits in the country of origin of the company, even if the product was made somewhere else. Not to mention that most engineering is still made in the countries of origin as well. Factory workers don't come out with a full plan to build a car by themselves you know? there is plenty more people involved in a car company, which might be a shocking discovery for many here since all they argue about is where it was assembled. Factory engineering, car engineering, support, office operations, accounting, etc. Most of them are based in the country of origin of the company as is their impact in their local economies
AngeloD @ May 24th 2008 4:52PM
Toyota treats most of its employees in Japan very badly. Most will never see the benefits and lifetime employment that Americans erroneously believe that Japanese auto workers receive.
Most auto workers in North America, even those working for the Japanese firms, are treated better than those in Japan.
Wildgoosechase @ May 24th 2008 5:03PM
I'm sorry that "volunteer" OT is not so optional if the culture demands it. It is dangerously close to slave labor.
K @ May 24th 2008 9:24PM
As someone who is living and working in Japan, I can attest to how serious of a cultural problem "encouraged" (read: required) overtime is in Japan.
Most of my coworkers routinely work 75-80 hour weeks, and admittedly only receive compensation for less than half of the overtime they work. What's worse is that my university frowns on paying money for worked overtime and instead prefers to grant workers extra vacation time equal to the amount of overtime worked. The problem is, the workload is so great that nobody can afford to take time off of work. Taking a vacation usually only means working even more overtime afterwards to compensate for lost time.
Overtime is deeply embedded into Japanese culture, so there's no easy fix for the problem. I think it'll change as Japan (very slowly) adapts its business model to fit more in line with the western one, but for the millions of workers being taken advantage of today, it won't happen soon enough.
Good for Toyota for upping the overtime compensation. I just hope the employees actually see some of that money.
Ryan @ May 26th 2008 5:11PM
Then again, work ethic is something that differs culturally and I'm not sure it's necesarily true that one way is better than another. The French work ethic is famously lax (with their mandatory 75-hour work week limit) and consequently their economy isn't exactly something to be proud of.
stratojet @ May 24th 2008 11:21PM
I just visited a Toyota Dealer this week and here is my experience:
- I was in the showroom 10 minutes and nobody talked to me. They do not have better sales peoples.
- They sell tons and tons of iron. With no exciting products.
- Their vehicles are very very standard; nothing really outstanding.
-I also noiced that the fabric for the seats look a little bit cheap.
-BUT: they have, according to CR, stellar reliability.
Chevrolet used to build car like this: mainstream, nononsense. I agree with Leno. They just have to do it again.
Don't ask what customers want through focus groups. Save money. GM has the answer right in front of their eyes. Look at Honda and Toyota.
I was stunned to see that what sell in this store are Low Ball Camries with steel wheels and Hub caps (no fancy chrome or aluminum wheels).
-Conclusion: exciting products are nice; what sells is not on the focus groups wish list. Blend standard cars with plain plastic painted hub caps sell the most. Interesting isn't it?
Takeo @ May 25th 2008 12:16PM
"Bing, Bing" Your attention please:
Most car owners are not enthusiasts.
Toy Yoda @ May 25th 2008 3:15AM
"With monstrous profits..."
Last year they cleared about 6% profits. That's not monstrous at all.
simianspeedster @ May 25th 2008 3:39AM
6% profits aren't good in the auto industry? Really?
Relative to Porsche, maybe 6% isn't great, but Ford, GM and Chrysler would KILL for 6% net margins and consistent profitability. 6% margins are excellent in the mainstream auto industry once you're competing at this scale of operation.
Take a look at these figures and see for yourself:
Toyota
Gross Profit Margin (Last 12 Months) = 33.2%
Gross Profit Margin (5 Year Avg.) = 25.4%
Pre-Tax Profit Margin (Last 12 Months) = 9.5%
Pre-Tax Profit Margin (5 Year Avg.) = 10.3%
Net Profit Margin (5 Year Avg.) = 6.6%
http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=TM
Ford
Gross Profit Margin (Last 12 Months) = 24.5%
Gross Profit Margin (5 Year Avg.) = 23.5%
Pre-Tax Profit Margin (Last 12 Months) = -0.2%
Pre-Tax Profit Margin (5 Year Avg.) = -1.3%
Net Profit Margin (5 Year Avg.) = -1.0%
http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=F
GM
Gross Profit Margin (Last 12 Months) = 12.4%
Gross Profit Margin (5 Year Avg.) = 22.2%
Pre-Tax Profit Margin (Last 12 Months) = -4.5%
Pre-Tax Profit Margin (5 Year Avg.) = -2.2%
Net Profit Margin (5 Year Avg.) = -4.6%
http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=GM
Suddenly, those 6% margins aren't looking so bad, eh?
-SimianSpeedster
Toy Yoda @ May 25th 2008 11:44PM
Thanks for all those stats, but from an investment point of view, 6% is still pitiful.
You might as well park your money in a US government bond, get roughly same returns and none of the risk of losing your money.
A smart investor would not touch Toyota. Anyone who does buy stock in any car industry, save for the ones with brand moat (Porsche), is buying on emotions, because clearly, they aren't using their heads.
By the way, I do like Toyota, but not as an investment vehicle --at it's current price.