A Toyota Factory Revs Up in Tijuana
http://www.latimes.com/business/la-fi-toyotamex23jan23,0,417...
The automaker increases production and aims to boost Mexico sales. Local officials hope the plant will revive manufacturing.
By John O'Dell
January 23, 2005
Toyota Motor Corp. didn't rely just on the help-wanted section in the newspaper here when it was ready to begin staffing the assembly line at its
newest factory.
It also plastered fliers on fences and poles and dispatched a sound truck to neighborhoods in southeastern Tijuana and the nearby town of Tecate, its
speakers blaring out a recruiting message.
The campaign elicited more than 7,000 applicants for 700 jobs, and 90% were rejected largely because they lacked sufficient reading and writing
skills. The majority of those who ultimately landed positions have no manufacturing experience. And most can't afford cars. So each workday a fleet of
company buses fans out, often traveling unpaved streets in hubcap-deep mud, to pick up hundreds of workers and drop them off for the 6 a.m. shift.
But for all that, executives at Toyota ? and civic leaders here ? have big plans for the Baja factory.
This month, five months after it opened, it's ramping up to full production. The company's goal is to build 30,000 Tacoma pickup trucks annually,
mostly for the U.S. market, and to gradually increase sales in Mexico.
At City Hall in Tijuana, the hope is that the factory will revive Mexican manufacturing, which has been in a slump, partly because of the strong peso.
Indeed, a few Japanese companies have cut back or closed their Baja-area plants and moved operations to China or other lower-cost Asian countries.
Toyota's decision to build here could mean that "other auto companies will follow," said Gustavo Camarena, Tijuana's industrial development director.
The world's second-largest automaker has operations in 26 countries. Its reputation depends on its ability to wring the same exacting standards of
quality from a plant in Tijuana as it does from those in the United States and Japan.
Except for the Mexican flag flying outside the plant and the signs in Spanish inside, the plant here, painted a gleaming white, looks like most other
Toyota manufacturing facilities. But there are notable differences between this plant and a Toyota factory in, say, Kentucky.
One is the relative lack of automation. Production volumes are too low to justify the expense of automating the entire assembly line, said Robert
Ried, the plant's vice president for administration.
So in one part of the plant, truck beds are built from metal parts stamped at a Toyota facility in Long Beach and a bed structure made at another
factory in Tijuana. Elsewhere in the plant, workers put together truck frames and passenger cabs with parts shipped from throughout the United States
and Mexico.
For the final assembly, laborers fit the pieces into jigs mounted on wheeled carriers, weld and bolt them together and roll them down the assembly
line. Interior wiring harnesses are installed at one station, seats and instrument panels at several others.
This factory stands out in another way: Many of the people working here came from electronic assembly jobs at maquiladoras, the foreign-owned
factories that dot the border with the United States.
"Teamwork, personal responsibility and looking out for the other guy, all things Toyota's system values, are not what the maquiladoras have been all
about," said Gordon Hanson, an economist at UC San Diego's Center for U.S.-Mexican Studies. "The challenge Toyota faces is to get the workers to adapt
to its ways."
If wages are any incentive, the company has a head start. Toyota pays a 30% premium over the typical maquiladora wage of $2.80 to $3.20 an hour,
including benefits, according to Tijuana's industrial development office. Toyota declined to reveal its pay scale.
One of Toyota's hires is 20-year-old Oscar Rodriguez, a former welder from Tecate who used to work in his father's ornamental iron shop. He joined
Toyota last February. Rodriguez, who did not finish high school, passed the literacy and job skills tests and is seen as a fast learner.
He works in the truck bed unit, tackling several assembly jobs as he fills in for absent co-workers. Like all employees ? Toyota calls them asociados
? his day starts with a quality-control meeting at which problems are discussed and solutions brainstormed.
At first, Rodriguez indicated through an interpreter, the challenge of his job was as much cultural as physical.
Mexican culture emphasizes self-reliance while Toyota stresses cooperation, and "I would conceal problems and try to fix them myself, without help,"
he said. "But now I have learned to communicate. And I have learned that there is never a dumb question."
Adapting to the Toyota way has been made easier, he said, because the company has "good teachers and they are patient."
Toyota installed two Japanese executives as factory supervisors, and there are also two American managers, both Toyota veterans, who run most of the
day-to-day operations. Two dozen temporary Japanese trainers are also on hand to help tutor the new staff.
The goals for the Baja plant would be daunting if the workers weren't so enthusiastic, said Joe Da Rosa, the Tijuana plant's general manager and a
28-year Toyota veteran who commutes from his home in San Diego and has worked at plants in Long Beach and Indiana.
"You hear the stereotypes, the 'ma?ana' mentality, but you don't see it here," he said. "The enthusiasm to do well, to learn and to build a quality
product ? it's a level of motivation I haven't experienced anywhere else."
The other American boss is plant vice president of administration Ried, who has worked for Toyota since 1986, with stints in Kentucky and Canada.
"People here have limited resources," he said, "so they've become very creative."
For example, when workers found it hard to push their heavy carts full of parts over an electrical conduit, they didn't complain; they scrounged up
hammers and chisels and laboriously chipped a trough across the concrete floor. The electrical cable dropped into the channel, and moving the parts
across the floor became easier and faster.
The solution could have led to disciplinary action in many auto plants; carving up factory floors without permission might be frowned on. But Ried and
other managers applauded.
Workers at the plant put in a standard 48-hour Mexican week. The main shift runs from 6 a.m. to 4:06 p.m. (the extra minutes allow them to squeeze
their work into five days, instead of six). Employees receive two weeks of paid vacation, medical and life insurance, free uniforms (tan shirts and
blue pants) and a company-paid hot lunch.
Managers Ried and Da Rosa said they were in Tijuana only to help get things started and to train their replacements. Thirteen Mexican workers are in
management posts, and they eventually will run the plant, just as American workers took over for Japanese managers in Toyota's U.S. factories.
Toyota has just 2.3% of Mexico's 1-million-vehicle auto market, its growth constrained by restrictions on sales by companies that don't make their
products in Mexico. Analysts expect Toyota to nearly double its Mexican sales to about 35,000 vehicles in just two years.
To help get there, the company next fall will start selling Tacoma pickups in Mexico. The $140-million Baja plant, situated on a small fraction of the
700 acres of rolling countryside that Toyota owns, has plenty of room for the extra production.
Meanwhile, plant worker Rodriguez is already making goals for the new year: to learn English, finish high school and continue advancing at Toyota.
He lives at home with his parents and siblings, and working at the plant has enabled him to contribute about 60% of his pay to the family budget. He
recently bought a microwave oven and has bought school supplies for his younger brother and sister.
Rodriguez also is applying some of the lessons he has learned at Toyota, such as the use of tighter inventory controls, to help his father's business.
"I saw that my Papa sometimes would order too much material" for his shop, Rodriguez said, so he's encouraging his dad to conserve cash by ordering
less.
Like most of his co-workers, Rodriguez relies on the plant's buses to shuttle him to and from work. One perk the company offers is a discount on new
Toyota vehicles. And as he inches toward joining Mexico's burgeoning middle class, Rodriguez has a plan: to save up and buy a used Toyota Celica coupe
and drive himself to work.
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