Toyota Tundra – As American As Apple Pie

Here at Tundraheadquarters.com we are constantly trying to stamp out misinformation about the origins of the Toyota Tundra including domestic R&D operations, where it is built and where the profits go. Here is a video that explains the Toyota Tundra build process in more detail follwed by an explanation on the domestic impact of the Tundra. (SPOILER ALERT: These are American’s talking about building an American truck.)

Background

Many people and journalists love to say that the Toyota Tundra is an import. This is a really interesting statement that isn’t factually true. The truth is that Toyota (like most major manufacturers)  is a global company with an entire distribution network and employees in each region. In the U.S., this network is called Toyota Motor Sales, U.S.A., Inc. with CEO Jim Lentz. There is a network of distributors, a large R&D effort and parts and assembly plants building the Tundra.

The majority of parts used in building the Tundra come from domestic parts suppliers and final production occurs in Texas. It really isn’t an import in any traditional sense of the word. If we were to use that word appropriately, we could call some GM, Ford and Chrysler products “imports.”

Research and Development

The Toyota Technical Center, part of the Toyota Motor Engineering and Manufacturing North America, Inc., just celebrated 35 years of research and development according to a Product Design and Development story. They have “major vehicle development responsibility”  for several products including the Toyota pickups: Tacoma and Tundra.  And, oh by the way, they recently just hired another 150 American engineers and researchers in Michigan to add to their workforce of 1,100 nationwide. Toyota also has opened a new R&D office in California. They say boosting U.S. R&D “reinforces Toyota’s commitment to localizing vehicle design and development in the North American region.”

The Tundra is such an American idea that the story goes that Toyota Japan wasn’t exactly thrilled at the idea of building a full-size truck. In fact, Toyota really built the Tundra in response to overwhelming customer demand.  The truth is that if U.S. customers didn’t clamor for it, the Tundra won’t have been built AT ALL.

Assembly

Both the Toyota Tacoma and Tundra are built in San Antonio, Texas. Period. Toyota has invested more than $1.8 billion in Texas and employs more than 2,800 Texans in the final production of the trucks.

Profits

Profits are funny things for people to understand especially when dealing with the economics of multinational corporations like Toyota. The argument among critics is that all the profit goes back to Japan. Again, an interesting and shortsighted assumption. The fact is that corporate profit goes to many places including Europe, North America and Japan. As evidence of this, the Wall Street Journal has reported that the recent Japan backlash in China over some disputed islands hasn’t really affected Toyota overall. Why? Toyota is such a global company that it is hard for one incident to completely disrupt the entire company except when the incident affects suppliers (see: How Toyota Recovered From The Earthquake Twice As Fast As Anyone Thought Possible).

The truth is that global corporations are tough to quantify where the profits truly go. The reality is that a profit by Toyota is often a win for global investors all over the world. So, if Toyota posts a profit, it is conceivable that you will likely see the benefit in a 401k mutual plan that invests in a large variety of corporations. Again, it is very difficult to keep track of all the profits except to say that EVERYBODY benefits when companies are profitable.

It is also true that the Toyota invests in the U.S., it is better for all of us. According to a Congressional Research Service report on Outsourcing and Insourcing jobs; “Economists and others generally argue that free and unimpeded international flows of capital have a positive impact on both domestic and foreign economies.” This means that the more Toyota spends to build and develop vehicles in the U.S. and export these U.S. built cars to other countries, it benefits us. In many ways, a homeowner in say Montana benefits when Toyota builds a vehicle in the U.S. through sustained domestic employment (R&D, Manufacturing, Distribution, Sales, etc…), investor profits on NYSE and taxes paid to local, state and federal governments.

How does Toyota impact North American?

Graphic courtesy of Toyota in Action

Any questions?

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• The Tundra Is Now America’s “Most American” Pickup