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RBA
07-10-2005, 07:04 PM
Toyota to build 100,000 vehicles per year in Woodstock, Ont., starting 2008
05:58 PM EDT Jul 10

http://www.cbc.ca/cp/business/050630/b0630102.jpg
New President of Toyota Motor Corp. Katsuaki Watanabe said that the automaker plans to build a new plant in Canada. (AP/Shizuo Kambayashi)

STEVE ERWIN







WOODSTOCK, Ont. (CP) - 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.

Tanguay said Toyota's decision on where to build its seventh North American plant was "not only about money."

"It's about being in the right place," he said, noting the company can rely on the expertise of experienced Cambridge workers to help get Woodstock up and running.

Premier Dalton McGuinty said the money the province and Ottawa are pledging for the project is well-spent. His government has committed $400 million, including the latest Toyota package, to the province's auto sector, which helped finance $5-billion worth of industry projects.

"I think that's a great investment that will more than pay for itself in terms of new jobs and new economic returns," McGuinty said.

The provincial funds for the auto sector were drawn from a fund set up to attract investments specifically in that industry. McGuinty said no similar industry funds are being planned for other sectors, but added the province wants to attract biotechnology companies - those working on multibillion-dollar advanced medical research.

"What we have done for auto we would like to be able to do for biotech," he said. "That's where we're lending some real focus to at the present time." Similarly, Emmerson said Ottawa is looking to help out industries that create "clusters" of jobs around them - such as in aerospace, shipbuilding, telecommunications and forestry - where supply bases build around a large manufacturer.
http://www.cbc.ca/cp/business/050630/b0630102.html

Unassisted
07-10-2005, 07:21 PM
I'm sure that's going to be well-received around these parts, since Toyota is building a pickup truck plant in San Antonio that's scheduled to open in 2007.

San Antonians must be smarter or at least less-illiterate than Alabamans or Mississippians. ;)

Jaycint
07-10-2005, 07:23 PM
Sounds like Toyota did what was best for their business, can't blame them there. The people are more well prepared and they don't have to pay them as much. Also sad considering the money and jobs a plant could have brought into the economy of one of those southeastern states.

Joseph
07-10-2005, 07:29 PM
I hate to agree, but is anyone surprised? There is an increasing gap in the intelligence levels in America. There are certainly more college educated peoples than in the past, but it seems there is also an increase in the amount of Americans who are icapable of following basic direction. I think it's due, in part, to the increased push for non-standardized testing and curriculum in schools. It's become more and more segmented, A level, B level, C level style courses instead of forcing students to learn the same things across the board. Basically doing things like I've mentioned say to people, 'If you can't learn what we want you to, then we'll just teach you something you are capable of learning.' It gives people no incentive to get better as students, then in the real world they are often viewed as ignorant, illiterate, or just plain dumb.

I don't blame Toyota one bit.

GAC
07-10-2005, 07:49 PM
Buy Honda! :D

I've worked for Honda for 11 years. As far as Honda is concerned - the American Honda worker out produces and is far more efficient then their Japanese counterparts.

And Honda's building new plants where?.... in the good ol' US of A. ;)

RBA
07-10-2005, 07:54 PM
Buy Honda! :D

I've worked for Honda for 11 years. As far as Honda is concerned - the American Honda worker out produces and is far more efficient then their Japanese counterparts.

And Honda's building new plants where?.... in the good ol' US of A. ;)

From the article above. Apparently Honda workers have trouble reading too. ;) I'm just joking.



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.

Falls City Beer
07-10-2005, 08:22 PM
While this may be true about the illiteracy, etc, why would Toyota say something like that, alienating their workforce? Why wouldn't you just say, "we dont' have to pay Canadians as much"?

GAC
07-10-2005, 08:45 PM
From the article above. Apparently Honda workers have trouble reading too. ;) I'm just joking.



It's not an illiteracy problem with our Alabama plant. I know because our plant is heavily involved in helping them get off the ground. We have reps/engineers from both plants going back and forth. Training? Sure. But training takes time and familiarity with new processes. It really has nothing to do with illiteracy IMO. I find that insulting. The Honda plants here had a hard time initially. We are currently at our plant trying to get new models ready for an August launch. As it has been before, we are having alot of troubles. We're working Saturdays and Sundays, and will get them worked out. Has more to do with locating and resolving logistical problems, and has nothing to do with one's illiteracy. Simply normal manufacturing problems when trying to do an initial ramp up.

I'm the Training Auditor in my department at the Anna Plant. And we use visual aids all the time during our production processes in certain instances. They are simply used as quick references and a valual tool. Doesn't mean that the worker is illiterate. There is an awful lot to remember in order to run/operate alot of these processes. It can take an associate up to a year to become familiar/comfortable with running a process. And then they must be trained on numerous processes in order to be moved around.

But I agree with FCB... why would their President say such stupid comments publically?

Reds Nd2
07-10-2005, 09:12 PM
While this may be true about the illiteracy, etc, why would Toyota say something like that, alienating their workforce?

Or potential customers?

M2
07-11-2005, 01:20 AM
San Antonians must be smarter or at least less-illiterate than Alabamans or Mississippians. ;)

You know, they probably are a much better educated, more skilled workforce in San Antonio. There's a lot of companies that went running into the sunbelt for cheap labor and have discovered it's bleeding them dry and degrading their name brand. David Stockman, who's become one of the most interesting people around, pushes the theory that much of the American drop in manufacturing is due to companies that didn't understand the value of skilled labor. He argues that our nation should have seen a bump in high-end manufacturing, but too many companies went chasing short-term cash in Right to Work states and wound up getting beaten on quality.

RBA, good highlight on the healthcare point. I'm routinely amazed national health care isn't the at the top of the priority list for small and medium businesses. I understand why big box retailers like it, it crunches their would-be competition, but for most other businesses it's just a cost center.

redsrule2500
07-11-2005, 03:05 AM
Meh that's just the owner.

So now I don't respect the owner.

RedsBaron
07-11-2005, 08:00 AM
RBA, good highlight on the healthcare point. I'm routinely amazed national health care isn't the at the top of the priority list for small and medium businesses. I understand why big box retailers like it, it crunches their would-be competition, but for most other businesses it's just a cost center.
I'm generally a croos between conservative and libertarian on most political issues, but health care is one issue where I'm mostly confused and conflicted. I'm usually against centralization, but I also know that health care costs are a huge burden on employer and employee alike. The cost of providing health has put big American auto manufacturers such as GM at a real cost disadvantage. It is also a huge concern of small companies. At our firm, we pay 75% of our employees' health care premiums; we felt like having a celebration last March when we learned that the premium was "only" going up this year by about 12% instead of the 20-25% it had in some years. Meanwhile, our employees understandably grumble about the increases in their 25% share of the premium.
National health care? It goes against my usual instincts and I'm not ready to say yes, but I'm sure not a solid "no" either.

GAC
07-11-2005, 09:14 AM
I'm generally a croos between conservative and libertarian on most political issues, but health care is one issue where I'm mostly confused and conflicted. I'm usually against centralization, but I also know that health care costs are a huge burden on employer and employee alike. The cost of providing health has put big American auto manufacturers such as GM at a real cost disadvantage. It is also a huge concern of small companies. At our firm, we pay 75% of our employees' health care premiums; we felt like having a celebration last March when we learned that the premium was "only" going up this year by about 12% instead of the 20-25% it had in some years. Meanwhile, our employees understandably grumble about the increases in their 25% share of the premium.
National health care? It goes against my usual instincts and I'm not ready to say yes, but I'm sure not a solid "no" either.

Good post. And me neither. I acknowledge that it's a growing problem and at some point it must be dealt with. It's unavoidable. I just don't like the "models" some are examining and holding up, such as in Canada and Europe. IMO, there has to be a better way.

And on the illiteracy problem this Toyota owner alluded to. I was wrong about Honda workers in Alabama. I went into work and did a little research with some of the management people who have been involved in the on-going process of getting this Alabama plant ramped up. It seems they are having a HUGE turnover problem down there. And the problem(s) that are contributing to this could very well stem from illiteracy, unfamiliarity with a manufacturing environment (the south is not known for it's manufacturing sectors), and absenteeism. They can't keep the people coming to work on a reliable and consistent basis upon hiring them. This amazes me.

M2
07-11-2005, 10:34 AM
I'm generally a croos between conservative and libertarian on most political issues, but health care is one issue where I'm mostly confused and conflicted. I'm usually against centralization, but I also know that health care costs are a huge burden on employer and employee alike. The cost of providing health has put big American auto manufacturers such as GM at a real cost disadvantage. It is also a huge concern of small companies. At our firm, we pay 75% of our employees' health care premiums; we felt like having a celebration last March when we learned that the premium was "only" going up this year by about 12% instead of the 20-25% it had in some years. Meanwhile, our employees understandably grumble about the increases in their 25% share of the premium.
National health care? It goes against my usual instincts and I'm not ready to say yes, but I'm sure not a solid "no" either.

I think the key is to make sure the government only handles the payments and the identity verification, not the administration of the care.

I fully understand the resistance to creating big government. I share that reluctance in many cases. Ideally small government folks would be integral to instituting a national health care system so that it isn't a massive, inefficient tax drain. The real trick here is figuring out how to use government to alleviate what's become a noose around the neck of American businesses. It would seem to be the great challenge in front of classical conservativism, demonstrate how you can use government in a positive way. The free market solution is choking the life out of the free market.

registerthis
07-11-2005, 11:09 AM
While this may be true about the illiteracy, etc, why would Toyota say something like that, alienating their workforce? Why wouldn't you just say, "we dont' have to pay Canadians as much"?
That's what I was wondering. Very strange that they would choose this way to describe their decision.

Rojo
07-11-2005, 03:16 PM
GAC, RB,

You guys are making my day.

We don't have to have a Canadian-style, British-style or anything else. The advantage we have is, that by getting into the game late, we can learn from everyone else.

Clinton's Labor Secretary Robert Reich I think has the best idea. He would consolidate all-levels of government and the military into one plan. This group would have such huge leverage that they could bargain for much better deals and, combined with little overhead, profit margins, advertising and PR costs, allow businesses and individuals at a very low cost. It would definitely lower healthcare costs for the government, probably lower them for everyone else and provide much greater access.

PickOff
07-11-2005, 06:18 PM
I don't think 'dumb' is a good choice. Uneducated, yes. Dumb speaks to intellect or the ability to speak, neither of which are in question here.

The primary issue, I believe, is how educaton is related to poverty/near poverty stricken communities, and to a large degree, states. I think it is just fine that Toyota gave their true reasons for their new plant decision. Perhaps we in America will learn something about our worsening education system.

Missisippi and Alabama are two of the poorest states in the Union and they have both recently faced large cutbacks in education, when that is the last thing that the states need. This is a clear example of how poorly run education systems hurt states and the USA as a whole. It further demonstrates that our education system is particularly failing those at the bottom of the economic scale. Statistics are clear, the less money your home brings in the less successful you are in school and the more likely you are to drop out.

It is a vicious cycle. Poor education = poverty = poor education = poverty = less ability to hold down a job = poverty......etc

The lesson, if you ask me is that our education system must be reformed and made more efficient. We also can't give up on those not doing well, because that just perpetuates the situation in terms of how a community or society sees itself and also what it values. Once the system has been made more efficient, then we must invest a higher percentage of GDP into education. Health care is also an issue for education and the poor. One must be healthy to learn.

Unfortunately for us, Canada does have more successful education and health care systems.

RBA
07-11-2005, 07:05 PM
PickOff,

Well said!

registerthis
07-11-2005, 07:22 PM
They could begin by appropriately funding the misappropriately-titled No Child Left Behind Act, which has actually left a good many children behind.

This move by Toyota is but a sympton of a much larger problem.