Toyota chooses Canada for new plant

[Balta1701]

Toyota corp has been one of the Japanese companies that has worked the hardest to try to build up goodwill amongst the Americans by opening factories over here, in accordance with a law passed during the Reagan years encouraging Japanese companies to do so.

 

Which is why I think this is so damn tragic...this is a company that actually likes to operate here, but they don't think they can any more.

 

Ontario workers are well-trained.

 

That simple explanation was cited as a main reason why Toyota turned its back on hundreds of millions of dollars in subsidies offered from several American states in favour of building a second Ontario plant.

 

Industry experts say Ontarians are easier and cheaper to train - helping make it more cost-efficient to train workers when the new Woodstock plant opens in 2008, 40 kilometres away from its skilled workforce in Cambridge.

 

"The level of the workforce in general is so high that the training program you need for people, even for people who have not worked in a Toyota plant before, is minimal compared to what you have to go through in the southeastern United States," said Gerry Fedchun, president of the Automotive Parts Manufacturers' Association, whose members will see increased business with the new plant.

 

Acknowledging it was the "worst-kept secret" throughout Ontario's automotive industry, Toyota confirmed months of speculation Thursday by announcing plans to build a 1,300-worker factory in the southwestern Ontario city.

 

"Welcome to Woodstock - that's something I've been waiting a long time to say," Ray Tanguay, president of Toyota Motor Manufacturing Canada, told hundreds gathered at a high school gymnasium.

 

The plant will produce the RAV-4, dubbed by some as a "mini sport-utility vehicle" that Toyota currently makes only in Japan. It plans to build 100,000 vehicles annually.

 

The factory will cost $800 million to build, with the federal and provincial governments kicking in $125 million of that to help cover research, training and infrastructure costs.

 

Several U.S. states were reportedly prepared to offer more than double that amount of subsidy. But Fedchun said much of that extra money would have been eaten away by higher training costs than are necessary for the Woodstock project.

 

He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment.

 

"The educational level and the skill level of the people down there is so much lower than it is in Ontario," Fedchun said.

 

In addition to lower training costs, Canadian workers are also $4 to $5 cheaper to employ partly thanks to the taxpayer-funded health-care system in Canada, said federal Industry Minister David Emmerson.

 

"Most people don't think of our health-care system as being a competitive advantage," he said.

How sad is all of this? Toyota is offered more money by several U.S. states to put their factory here. And you know what? They decide on Canada...because other companies have opened here, and have found the work force terrible.

 

An illiterate workforce in the southern U.S. Man, those states that spend so little on education...they really get their money's worth don't they.

 

And if you want even more evidence about who's health care system hurts their population more...Canada's or the U.S's, Toyota just decided it would be far cheaper for them to run workers under Canada's system than under the U.S. system. So let's ask...what's better...hundreds of people employed and receiving health care from the government, or hundreds of unemployed people without health care in the U.S.?

[3E8]

Not surprising. Toyota doesn't mess around. Plants worldwide aim for the level of efficiency that they've created and are constently improving. They time their plant operator's exact movements down to TENTHS OF SECONDS in order to figure out where they can cut down on cycle times and improve overall lead time. I don't blame them one bit.

[Balta1701]

Not surprising.  Toyota doesn't mess around.  Plants worldwide aim for the level of efficiency that they've created and are constently improving.  They time their plant operator's exact movements down to TENTHS OF SECONDS in order to figure out where they can cut down on cycle times and improve overall lead time.  I don't blame them one bit.

Neither do I, given the points above, I just think it's quite a statement about the situation here in the U.S., where Toyota believes they can't even find literate workers.

[KipWellsFan]

Imagine if I had posted this topic.

[LowerCaseRepublican]

Why do Balta, Kip and Toyota hate America so much?

[Rex Hudler]

Toyota corp has been one of the Japanese companies that has worked the hardest to try to build up goodwill amongst the Americans by opening factories over here, in accordance with a law passed during the Reagan years encouraging Japanese companies to do so.

 

Which is why I think this is so damn tragic...this is a company that actually likes to operate here, but they don't think they can any more.

 

How sad is all of this?  Toyota is offered more money by several U.S. states to put their factory here.  And you know what?  They decide on Canada...because other companies have opened here, and have found the work force terrible.

 

An illiterate workforce in the southern U.S.  Man, those states that spend so little on education...they really get their money's worth don't they.

 

And if you want even more evidence about who's health care system hurts their population more...Canada's or the U.S's, Toyota just decided it would be far cheaper for them to run workers under Canada's system than under the U.S. system.  So let's ask...what's better...hundreds of people employed and receiving health care from the government, or hundreds of unemployed people without health care in the U.S.?

 

It certainly doesn't help that they put these plants out in the freakin boon docks in small towns. Is it really a surprise they aren't getting the cream of the crop? Mercedes has a plant just outside of Birmingham and I have never heard anything other than raves about their production and success.

 

Honda opens in Lincoln, AL in the middle of freakin nowhere. Not sure where the Nissan plant is.

 

On the flip side, New Era Cap Co., the maker of all Major and Minor League baseball caps, opened a plant in Demopolis, AL (middle of BFE) and that non-unionized plant was outproducing their two Buffalo NY plants by its second year. It was so successful that they opened another plant in Jackson, AL which is closer to Mobile. Both Alabama plants outproduce their Buffalo plants. IF Buffalo were not the corporate home of New Era, they would probably shut down and move south completely.

 

I'm sure making cars is different than making hats, but I think New Era's success here has to show that not everyone down here is illiterate and stupid. LOL

[Rex Hudler]

The other thing this article fails to mention is the Toyota plant in Indiana. Are they having problems with it too? Do they just want the people in the South to sound stupid? Or is Toyota dumb for trying to find a location away from one they have now that is successful?

 

Either they are having problems there and failed to mention Hoosiers are illiterate and hard to train too or they were looking in the wrong damned places!!!

[southsider2k5]

I am sure it is nothing to do with this...

 

In addition to lower training costs, Canadian workers are also $4 to $5 cheaper to employ partly thanks to the taxpayer-funded health-care system in Canada, said federal Industry Minister David Emmerson.

 

Or this...

 

with the federal and provincial governments kicking in $125 million of that to help cover research, training and infrastructure costs.

 

By my calculations not only does Toyota get the $125 mil from Canada to build there... They also are going to save $10,000 an employee by making the employees pay their own health care through Canada's higher taxes, which by my math makes Toyota save $130,000,000 per year in employee costs in Canada (1300 employees x $10,000[$5hrx 2000 hrs worked for typical employee year]). Higher training costs my ass.

 

But I am sure it was just how smart Canadians are... :rolly

 

We as employees make companies rich by contributing billions to their bottom line, and we as American's are greedy to expect them to actually contribute what they promise to pensions, or to pick up some of their employees health costs... f*** that, and f*** Toyota. It'll be a cold day in hell before I ever own one.

[jackie hayes]

I am sure it is nothing to do with this...

Or this...

By my calculations not only does Toyota get the $125 mil from Canada to build there... They also are going to save $10,000 an employee by making the employees pay their own health care through Canada's higher taxes, which by my math makes Toyota save $130,000,000 per year in employee costs in Canada (1300 employees x $10,000[$5hrx 2000 hrs worked for typical employee year]).  Higher training costs my ass.

 

But I am sure it was just how smart Canadians are... :rolly

 

We as employees make companies rich by contributing billions to their bottom line, and we as American's are greedy to expect them to actually contribute what they promise to pensions, or to pick up some of their employees health costs...  f*** that, and f*** Toyota.  It'll be a cold day in hell before I ever own one.

To be fair, the article does also say that "Toyota turned its back on hundreds of millions of dollars in subsidies offered from several American states in favour of building a second Ontario plant." If true, those incentives may nearly balance out.

[southsider2k5]

To be fair, the article does also say that "Toyota turned its back on hundreds of millions of dollars in subsidies offered from several American states in favour of building a second Ontario plant."  If true, those incentives may nearly balance out.

 

Balanced out to the tune of about $1.5 billion over ten years when you factor in Canadians are forced to pay their own health care costs? Somehow I doubt it. Their subsidies to build the plant today might have been higher, maybe even significantly higher, but I doubt they come close to the $130 million a year in perpituity that Toyota would be saving according to their own numbers.

 

All this is, is the corporate world forcing American's to pay their own health care costs through higher taxes, dispite the label of "government" health care making it sound like we are getting something for free. With the trillions of dollars of profits that corporate America makes off of their employees backs I think 10k a year towards the health of their employees isn't that big of a deal.

[jackie hayes]

Balanced out to the tune of about $1.5 billion over ten years when you factor in Canadians are forced to pay their own health care costs?  Somehow I doubt it.  Their subsidies to build the plant today might have been higher, maybe even significantly higher, but I doubt they come close to the $130 million a year in perpituity that Toyota would be saving according to their own numbers. 

 

All this is, is the corporate world forcing American's to pay their own health care costs through higher taxes, dispite the label of "government" health care making it sound like we are getting something for free.  With the trillions of dollars of profits that corporate America makes off of their employees backs I think 10k a year towards the health of their employees isn't that big of a deal.

Well, not to nitpick -- but the $130 mil is too high. First, the big thing, you added an extra zero. 10,000*1,300=13,000,000. Second, 2000 hours is too high -- Canadians work, on average, about 1750 hours per year. And you took the high end of the $4-5 range. So it could well balance out, even considering the health care savings by their present value. Just saying.

[southsider2k5]

Well, not to nitpick -- but the $130 mil is too high.  First, the big thing, you added an extra zero.  10,000*1,300=13,000,000.  Second, 2000 hours is too high -- Canadians work, on average, about 1750 hours per year.  And you took the high end of the $4-5 range.  So it could well balance out, even considering the health care savings by their present value.  Just saying.

 

Yeah, my math was bad

 

Do Canadians not work a 40 hour week? What accounts for the 10%+ amount of work that Canadians don't do over American's? Also in that respect how many more Canadians would it take to do that work then with the lack of hours worked?

 

Also nice caveat at the end of that, assuming that health care will stay at presant value. Health care has been rising at a double digit clip forever now.

[jackie hayes]

Yeah, my math was bad

 

Do Canadians not work a 40 hour week?  What accounts for the 10%+ amount of work that Canadians don't do over American's?  Also in that respect how many more Canadians would it take to do that work then with the lack of hours worked?

 

Also nice caveat at the end of that, assuming that health care will stay at presant value.  Health care has been rising at a double digit clip forever now.

No, I meant the present discounted value of future health care costs. It's hard to guess how rising health care costs will affect things, so I'm not making any guess there. If they go up by a lot, Canada may have to increase taxes, but the supply of labor is based on the after-tax wage, so... Who knows what the overall effect will be?

 

Americans nearly work 2000 hr per year on average, but that's very high by world standards. We even exceed Japan now. (Old CNN chart. These data are a little old, but it hasn't changed dramatically.) Everyone has a theory why that's happened, I don't know which is right. I'd guess hours at this factory would be more than average Canadians, fewer than average Americans, but I could be wrong.

 

How many more Canadians it will take is really the whole question. Toyota is claiming that it won't take many more (if any), b/c they're better trained and therefore more productive.

[nitetrain8601]

I love it how Toyota doesn't f around. They don't like something and they'll fix it. That's how you become quality.

[JUGGERNAUT]

I agree with the assertion that the literacy is a smokescreen to hide the fact they really chose Canada because it is much cheaper to employ the workers there when you consider pay & benefits.

 

What the article totally ignores is that America is #1 in the world & everyone else is a distant 2nd when it comes to migration of workers. Even in the boonies of AL & MI Toyota can find more than adequately trained & literate workers from all over this nation to relocate & work there.

 

There is no dependancy on locality any more in America when it comes to the work force.

 

A self-employed worker in the states pays no less than $200/mo in premium costs for basic health insurance & it continues to rise. That's a burden Toyota & other companies have to share when employers in the states. Our rising health care costs are making America less friendly to do business.