Article — From the August 2009 issue
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Article — From the August 2009 issue
Toyota’s Georgetown facility sits on 1,300 acres of land that—like the entire surrounding area, where ten hotels, housing developments, several malls, and three successively larger Walmarts have now bloomed—was undeveloped bluegrass right up until the carmaker’s arrival. It once was thick with canebrake, ash, hickory, and burr, at the time when white settlers from Virginia would have encountered Shawnee or Creek there. For a century, farmers and their slaves worked hemp and tobacco; cattle and horses grazed the fields. Today, what grows on the land are Camrys, Avalons, and Venzas, about half a million in most years.
The past year, of course, has not been like most. Toyota’s U.S. sales have dropped by roughly 40 percent, and at the start of this year the carmaker posted its first ever operating loss, a $4.4 billion deficit for 2008. On the day I saw the Georgetown plant, the assembly line was moving at an octogenarian’s amble, about 60 percent off its normal pace. “You have to look carefully and say to yourself, ‘Is that line really moving?’” a worker on engine assembly said to me. In Toyota’s “lean” production system, any wasted motion or activity, known as muda, is anathema, and workers are expected constantly to seek ways to increase efficiency and productivity. At the reduced line speed, however, muda seemed a little more tolerable and continuous improvement a less pressing concern. A few team members smiled and waved as I was driven by on an electric cart. A young worker in a University of Kentucky basketball jersey leaned rakishly against a slowly moving hull, while an older redhead seated directly beneath him dangled her crossed legs out the car’s doorless frame. I watched another worker perched atop a giant mechanical arm, which extended to thrust him into each passing car. The contraption, originally built from a bass-boat seat and then repeatedly improved upon, allowed the worker to reach all four windows of a car in a matter of seconds with almost no shifting of his body. Because assembly-line work generally involves tasks that are not difficult to perform one or two times but that become arduous, even painful, when done hundreds of times over many hours, an apparatus like this reduces physical strain as well as production time. When the arm retracted, the worker used the extra time between cars to pick up an ongoing conversation with the team member one step up the line. I heard the other worker, a tall man wearing safety goggles, say emphatically, “And that’s why you use Shake ’n Bake.”
I was introduced to the plant president, Steve St. Angelo, as he walked alone near the assembly line, past little robotic delivery carts and men on three-wheeled bicycles. St. Angelo recently was named a managing officer of Toyota, one of only a handful of non-Japanese among the elite group of fifty, and I was told that his presence on the factory floor epitomized the unique democratic culture of the plant. Toyota’s North American factories have no separate parking spaces, bathrooms, or cafeterias for executives. Upper management and line workers dress similarly and receive the same benefits. The second tenet of the “Toyota Way,” after “continuous improvement,” or kaizen, is “respect for people.” And as part of its commitment to workers, the Georgetown facility includes a credit union and pharmacy, a fitness center, a picnicking area, a nature trail, twenty-four-hour child care, and a memorial site, where the names of deceased employees are etched into a marble obelisk. Businesses have long spent lavishly to win the devotion of workers and to weaken the appeal of competitors and labor agitators. But Toyota also claims that its workers take part in decision-making at the plant—through their ability to pull an “andon cord,” which stops the line when a problem is spotted; the open communication with team and group leaders; and the roundtables at which randomly chosen workers are asked to share ideas and concerns with St. Angelo. “Team members here have a voice,” Rick Hesterberg, the plant spokesman, told me. “Workers ask themselves over and over, ‘What can a third party do for me that I’m not already getting?’”
Hesterberg had arranged for me to meet with two workers at the factory visitors’ center, which is set up as a sort of museum of the company and plant. Eric Everhart leads a team on the same engine-prep line he has worked on for the last twenty years. His wife has been an employee of Toyota for nearly two decades as well, and all four of their children have moved through the company’s on-site child care. “We’re a Toyota family,” Everhart said with a bit of a laugh. Through a Toyota program, he took college classes for free at the plant, and he was now just a few credits shy of a degree in business management. Renee Brown worked at a Dairy Queen in eastern Kentucky before coming to Toyota ten years ago as a temp; it took three years for her to be hired full time. The plant has an unwritten policy that a temporary worker’s stint lasts only two years, at which time the worker is either sent back to the temp agency or, less likely, hired full time. This time limit was set in 2003, after the company was publicly criticized for keeping some workers on temporary status for five and six years. Brown believed that the precariousness of temping was still well worth the potential reward of a full-time position. “You know the stats as a temp,” she said. “You make less, you know there’s a chance you won’t be needed, but you hope. We all look for the bright light at the end of the tunnel.”
In February, just weeks before my visit, the plant had announced it would cut executive pay, eliminate overtime and bonuses, and offer a buyout to its hourly employees. Worse, all of the plant’s 650 temporary workers, roughly a tenth of the total workforce, were let go. When I asked Everhart about these cuts, he seemed unfazed. “If you’re not making changes—not just here, but in America—you’re setting yourself up for disaster,” he said. “We’re preparing as a family.” It’s true that everywhere in the country, and especially in the automotive industry, companies and their employees were rewriting the rules. In 2007, workers at the Georgetown plant were suddenly required to pay a portion of their health-care premiums, and that same year an internal report, leaked to the Detroit Free Press, revealed that the facility planned to reduce hourly wages so that they were more in line with central Kentucky’s industrial average. And these changes were undertaken even before the downturn, which has seen the plant eliminate many of the small perks of the Toyota work culture. In April, it took away the petty cash allotted to work units for lunches together, and in the weeks after Everhart and I met, it would end the on-site college classes he was attending.
 Although cost-saving measures at union automakers have been far more severe, union rules require that workers at least agree to cutbacks first. In fat times or lean, Toyota's explanation of changes has remained the same: To ensure long-term financial stability, management is considering the following. Details will be shared in the upcoming months with team members. Also, unlike UAW members, workers at Toyota and other non-union plants have no one representing their interests in the larger political sphere, no one lobbying on their behalf for a redesign of the health-care system or the enforcement of stricter occupational and health standards.
On a Saturday morning, with temperatures in the low forties, I drove the twenty minutes from Georgetown to Lexington to watch a group of Toyota workers immerse themselves in wintry waters for a Special Olympics fund-raiser. I had anticipated a rustic bluegrass setting for the Polar Bear Plunge—a misty lake or secluded swimming hole; a glen, undulating hills, a banjo, maybe thoroughbreds. Instead, a circular pool fifteen feet in diameter had been set up in the parking lot of a Texas Roadhouse restaurant, which was situated in a vast strip mall off of Man o’ War Boulevard. A banner on one of the mall’s two anchor stores announced the availability of its 22,000 square feet of retail space. The identities of other shuttered businesses could be made out from the ghosted lettering of signs recently removed. About two dozen Toyota employees, many in costume, had assembled at a company tent near the restaurant. When Toyota was announced as a Polar Bear Plunge sponsor, a crowd of two hundred or so cheered politely. The applause was significantly louder when Steve St. Angelo presented the event’s organizers with a poster-board check for $14,459.
Like countless other companies, Toyota knows that increasing the number of people and institutions invested in its future prosperity is good for both public relations and business. When the carmaker first moved to Georgetown, the seat of Scott County, it had to work especially hard to demonstrate that its own prosperity could be a boon to others. Initially, locals feared that the new plant would compromise their small-town way of life, and Toyota faced lawsuits not only from union activists but also from landowners and municipal officials. The company responded to the ill will by inviting every local dignitary imaginable to the plant’s dedication ceremony, at which it presented the city of Georgetown with ten new white Camrys. Toyota also quickly announced a $1 million gift to the city, which was used to purchase an old monastery and convert it into a community center. The plant’s president at the time, Fujio Cho, bought a house in Georgetown and joined several community organizations. His son enrolled at Georgetown College, which soon was able to convince the Cincinnati Bengals to choose its campus (home of Toyota Stadium) as the site for their summer training camp. Additionally, Toyota requested that the plant, officially located just outside the city limits, be annexed to Georgetown, thus helping to fund numerous development projects. (Georgetown’s revenues from payroll taxes increased from $531,000 in 1985 to $6.8 million in 1996.) On Main Street, aluminum siding was torn from buildings and their Victorian-era features were restored; wires were moved underground, sidewalks bricked; walls were painted with signs for defunct, turn-of-the-century stores, the advertisements carefully designed to look like time-faded originals. The major newspapers in the region, at first critical of the Toyota deal, now extolled it. A 1988 editorial in the Lexington Herald-Leader declared Toyota’s presence in Scott County a “match made in heaven, come to reality in the rolling fields of Kentucky.”
At the Polar Bear Plunge the Toyota team members reached a platform above the pool and jumped in twos and threes, the women often with linked hands. One of them didn’t fully submerge, and the crowd emitted a low groan. “She didn’t go under,” a man next to me said, as if registering a personal insult.
I spotted three Japanese men standing on the perimeter of the parking lot, bundled in parkas and heavy leather coats, and I walked over to say hello. All managers at the Toyota plant must attend at least one volunteer event a year, and these engineers had decided today would be their day. All three men lived in sections of Lexington that were popular among the Japanese expats from Toyota and its various suppliers, areas that, over the years, had seen the arrival of a nearby Japanese language school as well as many Japanese restaurants and groceries. When, in a rehearsed manner, one of the three praised Kentuckians for their friendliness, the other two nodded in agreement. At no point during the event did I see any of them share a single word with a co-worker or a local.
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