Filed under: Hirings/Firings/Layoffs, Toyota
Toyota refuses to lay off workers, but has great flower beds
Toyota is struggling to sell trucks and SUVs like everyone else, but unlike the competition, no full-time workers from stalled factories are getting laid off. The 4,500 workers at idled plants are instead bettering themselves through eduction by taking classes on safety, diversity, and Toyota history. They're also doing community service while on the clock and even some gardening. The workers will be learning how to work faster and smarter during the down time, and are even being shifted to busier plants on a temporary basis to help plants that are working beyond capacity to keep up with demand.
Toyota's plan to keep its workers busy at all costs isn't cheap, as about $50 million is being spent to keep workers busy with training programs. Of course, you can't please everyone and the plan isn't sitting well with all of Toyota's workforce, as workers at running factories don't like the fact that laid off workers are getting a leg up on training. A more skilled plant could have an advantage over others in getting earmarked for future products, so unaffected workers also want the extra training.
While expensive and a bit of a logistics nightmare, Toyota's plan is a good one if you can afford it. It should help create a more loyal, better trained workforce that also forges ties with the surrounding community. We bet Toyota hopes it will prevent any talk of unionizing, as well. And with Toyota's record profits over the past few years, $50 million is a drop in the corporate bucket.
[Source: Automotive News - Sub. Req., Image: Junko Kimura/Getty]
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Reader Comments (Page 1 of 2)
Xaijin 6:52PM (8/18/2008)
Nice to see Toyota cares a little more about their employees livelihood than the bottom line. They could have just as easily fired those employees and saved money, in addition to the $50 million they're spending.
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Geeky1 6:56PM (8/18/2008)
That's one way to look at it. The more cynical view, of course, is that they saw this as a PR opportunity; "Hey look what we're doing for our employees... Ford/GM/Chrysler/etc. aren't doing this!" etc.
Rick 7:17PM (8/18/2008)
BUT, they are doing it. And it's also head shaking to read that other factory workers are angry over this.
MemphisNET 7:18PM (8/18/2008)
I don't think its a case of any other manufacturer not caring about their employee's, its just that they're in a better position to do it right now.
What about cycling the workforce so everyone gets the new training?
i8urchicken 11:01PM (8/18/2008)
My husband works for the Toyota plant in Indiana, and they are doing just what Chris Shunk mentioned. They are indeed doing vast amounts of restructuring, training, and even exercise. Those who don't understand this, and want to put it off as "PR" have no clue what they are talking about.
Toyota is doing this for many reasons. Here are a few:
Reason #1 - The training program at the TMMI plant aims to make that plant their #1 plant in quality and efficiency. Spend the money now in training, and recoup in later in saved time. Better trained workers = less vehicles to take offline for repairs to make it perfect. It will happen.
Reaon #2 - Do you have any idea how much it costs to layoff someone, only to have to retrain a newbie a year later to fill the same position?? Lots! Keep you employee. Train them. Make even better quality vehicles.
Reason #3 - By keeping their PERMANENT Team Member employees... Notice I said TEAM MEMBERS, not TEMP workers, Toyota builds even more of a trust/respect relationship with each employee. In turn that employee puts in more effort and is a better worker all around.
Not to long ago the Toyota plant over in Turkey was shut down for 10 months because of a natural disaster. But those workers still worked. Not making vehicles, but training, exactly the same way they are now doing in the states. When the plant reopened for production, the effeciency of the plant surpassed all other Toyota plants. Why? Because of the training and relationship built.
And as far as pay is concerned... I have no idea what companies like Ford and GM paid their employees, but Toyota isn't chump change. My husband makes around $68,000/year just in base pay. Add on insurance and the excellent benefits they offer, and it's 6 figures.
I have alot of respect for the company. Not only do they treat their employees well, as proved in this original post, but they also make great vehicles. We own 2, and will never own anything else.
Rally Man 6:54PM (8/18/2008)
Well that's nice of them!
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Xcountryflyer 7:09PM (8/18/2008)
As others have said, they could easily dump the idled workers into the unemployment lines. I think additional training and education is a great idea and will create better goodwill with the workers and its great press. As Toyota switches production to more fuel efficient vehicle product in the US, they should need the extra workers. They have probably figured it is cheaper to keep these workers on then to have to start from scratch and hire.
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Brent 7:14PM (8/18/2008)
I wish the people who put my car together took diversity classes.
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a 7:14PM (8/18/2008)
this has got to be one of the best ways to deal with this kinds of situation. creative and efficient.
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imoore 7:23PM (8/18/2008)
This is why Toyota is successful. Everyone should take a page from Toyota's playbook.
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compy386 7:29PM (8/18/2008)
So Toyota has a jobs bank. Interesting.
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mark.hinman 7:51PM (8/18/2008)
Funny, they didn't mention anything about all the temporary workers they let go.
Brian W 8:28PM (8/18/2008)
These were full timers.
If they were temps, they would be out the door already.
Nice PR move Toyota.
Dirk 7:31PM (8/18/2008)
What hypocrisy from the Toyota fanboys . If it was GM, Ford or Chrysler doing this you would be screaming about the lazy, useless workers and their cushy contracts.
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maccve 8:56PM (8/18/2008)
The difference is that GM, Ford and Chrysler HAVE to do it because of the Union Contract. Toyota is doing it to better their company.
Temple 11:09PM (8/18/2008)
I would be pissed if any of the Big 3 didn't lay off idle workers when they are losing billions each year.
However, sometimes its best to keep workers loyal and well trained during hard economic times, and swallow short-term loses for long-term workforce stability. The bing-and-purge labor employment does neither the company nor the worker any good. For Toyota this makes sense.
Hell, VW spent $384 million on R&D alone for the Veyron project, which has been negative for the companies bottom line and has only benefited the ego of Pierch. $50million for keeping workers trained during a dip in the economy is more then reasonable.
The Other Bob 11:30AM (8/19/2008)
"The difference is that GM, Ford and Chrysler HAVE to do it because of the Union Contract. Toyota is doing it to better their company."
The Big three agreed to the jobs bank, because at the time it made buisness sense to be able to call them back at a moments notice.
stratojet 8:11PM (8/18/2008)
In short, this is called a Job bank that UAW negociated with the manufacturers.
A system like this works and is laudable when it is temporary. Toyota has experienced continuous growth for many years. When the demand for your product stalls (ie when competition grows their market share as for ex Hyundai) then you run the risk of having a permanent Job bank.
The employment for life has been a way of life for Japanese corporations. More and more you see that they hire temporary workers or sublet the work. This way, they don't look as if they made a layoff so typical nowadays.
This is good public relation and will remain so until they have a reality check. No corporation is immune from an economy slowdown.
If you train your workers, have them gardening or do university, especialy the younger ones, you run the risk of alianating the more senior employees. When the senior employees get mad, you may get an industrial disease called UAW.
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why not the LS2LS7? 10:42PM (8/18/2008)
Employment for life only applies to top-tier Japanese companies. Most of the work in a Japanese car is subcontracted, and those companies (like NipponDenso) do not have "employment for life".
It has been this way since the 80s.
jesda 8:44PM (8/18/2008)
Much more affordable when your non-union employees cost half as much to begin with.
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