When times are tough, what do most manufacturers do? Why, they lay off or send people home of course! If you’re part of the Detroit Three like GM, Ford, and Chyrsler, then you still have to pay people after they go home.
For years, Detroit’s Big Three car makers have paid their workers even when they aren’t needed on the assembly line. At GM, Ford and Chrysler, workers effectively are paid for not working when their assembly lines are idle, under terms of union contracts. If a plant is shut temporarily, as some were this summer, workers receive most of their pay but don’t have to show up.
This year, as the industry’s downturn intensifies, Toyota Motor Corp. finds itself doing the same thing.
Yes, even mighty Toyota is having a tough time, and is slowing down production. The difference is that Toyota isn’t unionized, so it doesn’t have to pay people sent home… but still does. And the more vital difference is that Toyota doesn’t send the workers home in the first place.
Instead of sending the workers home, as the Detroit makers often do, Toyota is keeping them at the plants, though. The employees spend their days in training sessions designed to sharpen their job skills and find better ways to assemble vehicles.
At its Princeton plant, Toyota is using the down time to hone its workers’ quality-control and productivity skills. The company has pledged never to lay off any of its full-time employees, who are nonunion.
How big is this investment in training?
Toyota is "facing a significant lack of production work for a significant number of workers," said Sean McAlinden, an economist at the Center for Automotive Research. He estimates the wage cost of idling the assembly lines at the two plants at $35 million a month.
How does that compare with your training budget? So what kinds of projects are the Toyota folks working on?
In Princeton, senior plant manager Norm Bafunno said he can already see the benefits of the training. Mr. Bafunno cites a Teflon ring designed by an assembly worker during the down time that helps prevent paint damage when employees install an electrical switch on the edge of a vehicle’s door.
Throughout the factory, workers sit in classrooms, repaint hazard areas bright yellow, lift weights, complete dexterity drills and get steeped in Toyota’s corporate philosophy.
Near one idle line, assembly worker Bob Mason sat with four others employees around a table looking at a flip chart with PowerPoint printouts on it. The employees went through a problem-solving module based on a technique in Toyota’s production system.
Toyota understand the value of knowledge, and that employees are more than simply a pair of hands.
Jim Lentz, president of Toyota Motor Sales, the company’s U.S. sales unit, said the company believes keeping employees on the payroll and using the time to improve their capabilities is the best move in the long run. "It would have been crazy for us to lose people for 90 days and [then] to rehire and retrain people and hope that we have a smooth ramp-up coming back in," Mr. Lentz said.
Mr. Mason, a 40-year-old former firefighter, added: "One of the major things that everyone is grateful for is that they thought enough of us to keep us here.""
Indeed. Respect for people, pure and simple.