Nearly 60 years have passed since Toyota first entered the American cultural landscape. Our new factory in Guanajuato, Mexico, which was announced in April 2015, would not result in a reduction in production volume or jobs in the United States. Toyota looks forward to working with the Trump Administration to advance the interests of consumers and the automotive sector. With more than $21.9 billion in direct investment in the U.S., 10 manufacturing facilities, 1,500 dealerships, and 136,000 (direct and indirect) employees, Toyota has a significant presence here.
- Toyota has produced more than 25 million vehicles in the United States during the past 30 years.
- For the past 20 years, American facilities have received $2 of every $3 invested in North America.
- In 2016, Toyota was the lowest importer of vehicles into the United States from Mexico.
- Toyota contributed to the development of the United States as a major international export hub by exporting more than 135,000 automobiles to 40 nations in 2016.
- Our San Antonio, Texas facility, staffed by 3,300 workers, produced more than 230,000 Tundras and Tacomas in 2016. These vehicles are built at our Baja, Mexico, manufacturing facilities, which were created in 2002.
- Toyota has recently increased production capacity in the United States.
- Toyota’s Georgetown, Kentucky, facility received a $360 million investment, creating 750 new employment.
In This Article...
Which automaker has the largest American workforce?
It makes more sense for international automakers like Toyota and BMW to use U.S. manufacturing than it does to import their vehicles due to rules and taxes. Due to this, the majority of significant international manufacturers produce their vehicles in North America, with Toyota having many operations here.
Nevertheless, that number is still considerably lower than what Ford and GM use. Ford and GM continue to have the most American workers, despite significant progress made by Toyota, Honda, and other foreign automakers in hiring Americans. And Ford’s sustained dominance in the truck and SUV markets suggests that this will happen for some time.
How many people worldwide work for Toyota?
As Toyota grows, it must contend with a wider range of viewpoints from the expanding employee base and consumer base in numerous markets. Additionally, internal communications become less effective, making it more challenging to coordinate activities across markets and product groups. How does the business manage the risks of ongoing change and expansion? We identified three integrating forces that enable Toyota to adhere to its objective. They maintain the company’s culture and control its growth and evolution.
Three Forces of Integration
The company’s growth and change are stabilized by three integrating forces.
- principles of the founders
- shrewd human resource management
- Honest dialogue
Values from the founders.
Over the years, a number of people have contributed to the development of Toyota’s values, including Sakichi Toyoda, who founded the parent company Toyoda Automatic Loom Works, Kiichiro Toyoda, Sakichi’s son and founder of the Toyota Motor Corporation, Taiichi Ohno, the mind behind the TPS, Eiji Toyoda, Kiichiro’s first cousin and a former Toyota president, Shotaro Kamiya The values include a continual improvement mindset (kaizen), respect for people and their abilities, teamwork, humility, putting the needs of the customer first, and the value of first-hand experience (genchi genbutsu).
Toyota instills these principles in its workers by showing how applicable they are in real-world situations through on-the-job training and tales that managers pass down to future generations of workers. Despite the organization’s complexity, we think four core principles have prevented it from going astray.
Tomorrow will be better than today.
Toyota’s foolish confidence has contributed to its long-term success. Obstacles are seen as challenges by the company’s personnel, who are motivated to improve. They firmly think that Toyota will transform today into a better day tomorrow. Employee experimentation is constant because of a mindset that never accepts the status quo.
Everybody should win.
Since its inception, the business has emphasized teamwork as a driving principle. Each team member is responsible for finding a solution when a problem emerges and is empowered to do so. The corporation as a whole has adopted the practice, which first appeared on the production floor.
Genchi genbutsu.
During a recent meeting, Fujio Cho, the chairperson of Toyota, interpreted the phrase “Have you seen it yourself? The inference is that your understanding of something is questionable if you haven’t personally witnessed it. Senior leaders at Toyota hold themselves to a high level and stress the value of tacit knowledge that is derived from each employee’s actions and experiences. When Cho was in St. Petersburg, he went to a factory and a dealership because he demonstrated genchi genbutsu, not only by talking about it.
Customers first, dealers secondand manufacturer last.
Toyota goes above and beyond to build enduring connections with dealers and consumers because it feels that keeping their trust is essential to its success. Supervisors repeatedly emphasize to workers that it is customers, not the corporation, who are responsible for paying their wages, even on the factory floor.
Up-and-in people management.
Many businesses either urge employees to leaveup-or-out, as the technique is known, or promote them. Toyota focuses on enhancing the capabilities of underperformers rather than eliminating them. In actuality, Toyota continues to value long-term employment, as did all previous Japanese businesses. For instance, Toyota’s Thailand operation survived four consecutive years of losses without making any job layoffs during the 1997 Asian financial crisis. Cut all expenses, but don’t touch anyone, was the directive issued by Hiroshi Okuda, the country’s then-president. Toyota’s credit rating was downgraded by Moody’s in August 1998 from AAA to AA1, citing the lifetime job guarantee. Toyota’s interest payments went up by $220 million as a result of the downgrading, but corporate leaders assured the rating agency that the company would stick to its commitment.
Toyota favors in-house training over outside programs. Employees are given the opportunity to use judgment throughout their initial training. Instead of following a rigorous set of regulations, they must abide by a broad collection of guidelines. By requesting that they consider themselves to be two levels higher in the organization, the corporation gives employees’ viewpoints greater context. During the first ten years of employment, Toyota provides training to its staff on problem-solving techniques. The function of excellent employees serving as mentors is another aspect of its people management strategies. They are in charge of producing a group of managers who learn through trial and error and impart Toyota’s principles through sharing personal stories in the manner of a modern-day apprenticeship system.
Toyota often prioritizes process performance and learning over results when evaluating managers. The business examines how managers met their objectives, resolved problems, promoted organizational skills, and empowered and developed subordinates. The business uses five different types of criteria, all of which are ambiguous and arbitrary. Personal magnetism (jinbo), for instance, is one of the categories it uses to measure how much respect and trust a manager has garnered from others. Jinbo is a subjective standard that is difficult to measure and can only be used to judge someone if you have worked closely with them. Persistence or resilience are two further defining characteristics of Toyota measures of management performance. The corporation refers to this as nebari tsuyosa, which literally translates as “adhesive strength,” and views it as a component of its DNA.
Characteristics of Toyota Executives
- ability to hear and pick up on others’ ideas
- enthusiasm for producing improvements all the time
- Possibility of cooperating in groups
- the capacity to move swiftly to address a problem
- a desire to mentor other employees
- Modesty
Toyota’s evaluation standards are especially pertinent to the auto industry, since a variety of specialties are necessary for success. It’s not the kind of business where a select few excel. Watanabe asserts “Every single person on the stage is the lead actor. Toyota doesn’t give employees appreciation when it promotes them. Senior executives instead convey the following message: “Thank you for the promotion. There were a lot of people that narrowly missed being chosen. Remember that when you perform your duties. Employees are being reminded that their achievement is a result of the efforts of similarly accomplished coworkers in order to inculcate humility in them.
Open communication.
Toyota employs close to 300,000 people, sells automobiles in more than 170 countries, and runs 50 manufacturing locations outside of Japan. Toyota continues to operate like a small-town business despite its size and reach. Top executives there operate under the premise that “Everyone is aware of one another’s affairs.
Information readily moves up and down the hierarchy, across functional levels, and across seniority levels, reaching out to suppliers, clients, and dealers outside the organization. Personal connections come first, as is customary in Eastern business culture, and Toyota’s networks are physical rather than virtual. The ability to pay close attention to comments in a public setting is a skill that employees need to develop. The end result is a network of connections that Yoshimi Inaba, a former executive vice president, refers to as the “nerve network. Like the central nervous system of the human body, Toyota efficiently communicates information throughout the entire company.
Executives still personally visit the front lines to provide and receive information, even in Toyota factories. For instance, Takahiro Fujioka, the plant manager of the Takaoka and Tsutsumi plants, regularly joins workers for drinks in the evening (nomikai) and is present on the factory floor every day. Similar to this, senior sales representatives visit dealers to exchange information and discover more about client preferences. Toyota employs this technique to stay clear of the communication issues that plague large corporations. We determined that Toyota’s distinctive communications system is supported by five factors.
Disseminate know-how laterally.
In Toyota’s hallways, you can frequently hear the phrase “Let’s yokoten.” Yokoten, the abbreviation for yokoni tenkaisuru, literally translates as to unfold or open outward on the side. At Toyota, information spreads widely and communication is viral. The business has discovered that working together in a huge area without walls is one of the finest ways to ensure effective communication (obeya). The idea was developed in Japan due to the country’s ongoing office space problem, which we already noted, but the company now applies it globally. Project teams also use the mieruka technique of posting information on the walls of a designated situation room for everyone to see (visualization).
Give people the freedom to voice contrary opinions.
Toyota’s communication strategy is effective because the company welcomes criticism. Employees feel free to express opposing views and challenge managers, even feeling empowered to do so. Everyone at Toyota is required to conduct themselves in a morally upright manner. Every employee has the freedom to disregard or not take too seriously the boss’s instructions. Confronting your employer is okay, telling your boss unpleasant news is recommended, and avoiding your boss is frequently appropriate. Employees explained to us how local operations had succeeded by defying directives or disregarding what headquarters had recommended in numerous of our conversations. For instance, Yukitoshi Funo, president of Toyota Motor Sales in the United States, was open with us when he said: “Before I was transferred to the United States in 1997 [as senior vice president], I visited several senior executives in Japan. They advised me to add more retail locations. These were managing directors and executive vice presidents. To assess the situation, I went to the market. Adding more dealerships would have increased competition and jeopardized effective management of dealerships. I made the decision to disregard everything those senior executives said.
Confronting your employer is okay, telling your boss unpleasant news is recommended, and avoiding your boss is frequently appropriate.
Have frequent face-to-face interactions.
Refusing to listen to others is a significant violation, even yet there are no consequences if local operations don’t follow headquarters’ advise or if subordinates disregard directives from superiors. Only when all members of the organization have access to the information from the source does Toyota’s system work. Therefore, interactions in the scene are highlighted (genba). Tony Fujita, a former vice president of Toyota Motor Sales, U.S.A., for instance, thinks that Toyota sets itself apart from American automakers by paying attention to dealers. “Other automakers hold dealer meetings, but I believe Toyota is exceptional in the regularity and the severity of the topics we cover [with them].”
Make tacit knowledge explicit.
The process of transforming implicit or experiential information into an explicit form and disseminating it throughout the company is another component of Toyota’s nerve system. Toyota recorded the founders’ knowledge that had previously been passed down verbally during the presidency of Fujio Cho. Senior executives looked at proverbs and anecdotes and decided that continual development (kaizen) and respect for people should be the two pillars of The Toyota Way 2001.
Create support mechanisms.
The Toyota Institute and the Global Knowledge Center were established by the firm in Torrance, California, and Toyota City, respectively, in 2002. These institutional procedures, along with the University of Toyota, which Toyota Motor Sales, U.S.A. founded four years earlier in Torrance, assist Toyota’s communication networks by propagating industry best practices and corporate principles. Additionally, as we previously noted, employees are encouraged to join a wide range of informal groups. There are roughly 20 committees (iinkai), self-organizing study groups (jishuken), and other social clubs that each employee is a member of. This aids in building Toyota’s multilevel communication network.
Who is Toyota’s main competitor?
Honda, a well-known brand in the automotive industry, has its headquarters in Japan and produces motorcycles, aviation, and power equipment. It leads the globe in the production of powerful automobiles. Honda not only designs, manufactures, and sells the vehicles, but also offers fantastic after-sales support to their clients.
About 14 million internal combustion engines are produced by the company annually; Honda is the largest internal combustion engine manufacturer. One of the company’s greatest achievements is the Research and Development division of Honda, which is exceptional and constantly working to produce fantastic vehicles. The designs are a huge hit with consumers.
To keep up with the demands of technology, each of their vehicles is likewise equipped with cutting-edge equipment. About 100 different car models are included in their extensive product line, along with other vehicles like bikes and scooters. Honda is regarded as one of the main rivals to Toyota because of their reputation and significant market share.
Who in America produces the most cars?
Based on vehicle sales, Toyota surpassed Ford in 2021 to become the most popular automaker in the country, selling about 1.9 million vehicles to American consumers.
Is Toyota produced more domestically than Ford?
Vehicles with at least 75% American-made components are getting harder to find. The prerequisites for inclusion on the list are 75 percent domestic content and US construction. Any car assembled outside of the US or made with fewer than 75% American-made components was ineligible. Additionally, the list contains less than 10 vehicles for the first time in the index’s nine-year history.