Toyota Hiring More US Autoworkers, Yet Criticism Abounds
Jason Lancaster | Aug 24, 2010 | Comments 18
Yesterday, Toyota officially began hiring at their soon-to-open Blue Springs, Mississippi assembly plant. It is expected that Toyota will directly employ 2,000 workers, with thousands of other new jobs being created as a result of new investment. While this is great news for Mississippi – one of the poorest states in the US – this move is not without criticism.
Toyota's new plant will employ 2,000 directly and thousands more indirectly at suppliers co-located in Blue Ridge
Toyota critics argue that Toyota’s 2,000 new hires aren’t actually “new” at all – that they are just cheaper replacements for NUMMI workers who were let go earlier this year.
Critics Attack Toyota’s Mississippi Venture
People who have been following Toyota will recognize that the new Blue Ridge plant will replace Corolla production that was lost when NUMMI was closed earlier this year. Many critics feel that Toyota shouldn’t get any credit for hiring new workers because they are merely replacing NUMMI jobs that were lost. NUMMI’s closure resulted in about 4,000 assembly jobs lost, and Mississippi brings back about half that number.
NUMMI also assembled the Tacoma, which Toyota recently began producing in San Antonio. Toyota hired 1,000 additional assembly workers at the Texas plant for this purpose, so the total count is: NUMMI – 4,000 assembly jobs lost. San Antonio and Blue Ridge – 3,000 assembly jobs gained.
But that’s not the whole story.
NUMMI was a joint venture between GM and Toyota, and NUMMI’s closure was a direct result of GM’s decision to abandon the plant during their bankruptcy. While Toyota definitely deserves some of the blame for NUMMI jobs lost, it’s a little too simplistic to blame Toyota exclusively for NUMMI.
Those who criticize Toyota for NUMMI job losses seem to be glossing over huge job losses brought on by Ford, GM, and Chrysler since the recession began in 2007. According to AOL’s Daily Finance, GM has been the “king” of layoffs since the recession began with more than 100k workers fired. Ford laid off nearly 16k workers in this same period, and Chrysler let go more than 13k. It would seem then that Toyota’s decision to close NUMMI and lay off 4,000 assembly workers (brought on by GM’s bankruptcy) should be compared to immensely larger layoffs at GM, Ford, and Chrysler.
At worst, Toyota has held serve by closing the NUMMI plant and hiring new workers in San Antonio and Mississippi.
At best, Toyota should receive credit for continuing to invest in US auto production while Ford, GM, and Chrysler lay off thousands and expand production in Mexico.
What do you think?
Filed Under: Auto News
Naysayers will always complain about Toyota. The fact of the matter is that GM’s downfall is the direct reason for the NUMMI closing. The fact is that Toyota is opening more plants in the US while Ford, GM and Chrysler are laying off US workers. Toyota pays a significant amount of taxes in the United States and employes a significant amount of people in the United States. The profits from Ford and (eventually/possibly GM) don’t put any money in my pocket, unless I own stock.
The source of the criticism is not hard to figure out:
Laid-off NUMMI workers = Union
Newly hired Mississippi workers = Non-Union
Us Mississippians greatly appreciate Toyota and Nissan. If Honda, Hyundia, Mitsubishi, Mazda and Subaru wants to move here too, they are welcome to come. If GM, Ford and Dodge would like to invest in their own country, we’ll make room for them too. The big 3 should be aware though, the MS delta is known for locking doors and closing plants as soon as a union comes in.
Mike – Very true. Every company has critics. I think that your point about taxes is a good one – Toyota is a profitable company, so they pay taxes. GM, Chrysler, and Ford may very well pay less income tax because they’re less profitable.
BobG – Great point. I would like to think that the Mississippi workers have every opportunity to unionize if they choose – that’s true of the Toyota workers in Kentucky and in Indiana – but I hear you loud and clear. That is definitely a key difference.
Danny – Interesting…had no idea that Mississippi would be anti-union. Kind of assumed the opposite in fact…shows what I know! 🙂
Jason,
Its not that the populus in general is antiunion, infact the population is probably the same as any other state, but many manufacturing companies have felt it wasn’t worth doing business once a union steps in. Unions were necessary a long time ago but in todays world, they can’t get you anything without yolu giving something else up. When I was in the casino biz in MS, staff at a neighboring casino asked me to help them write their exodous plan for the state commission when they had a real threat of unionization. They were willing to closedown a location that had a gross revenue of about 900 million and 1900 jobs in a blink of an eye. Casino jobs pay very well and the union bid failed miserably. Just my 2 cents.
Danny – Good info – the culture of corporate management combined with the economic problems in the state don’t facilitate union support. Makes sense.
I think that workers should be free to unionize and negotiate as a group, however I personally fail to see the benefits. I’d rather be paid for my own performance than paid based on the performance of my “team” or “group.” I want to be judged on my performance exclusively, mostly because I believe that will benefit me the most. Maybe if I didn’t think I was so damn special I would be open to joining a union…LOL 🙂
quite true Jason. Definitely agree. I was on the other side of that coin from 04/77 – 03/82. Everyone always commeted that Kaiser Aluminum had the best Union it could buy. The union used me as a pawn and walkout on me thinking that the company cant break the rules. I’m proof they can and it cost me 5 days pay because these clowns walked out. The company just leaned over and stated just ask for your job back and I did. I needed the benefits. Wife pregnant. That’s when I went to the union meeting and got blackballed for arguing with the union president. I was a shop steward and I thought I had more pull with the union. That’s what I got for “ASSUMING”. Yes the union got us higher wages but we priced ourselves out of competition. In 77 I started $8.00 an hour and in 82 I was at $12.00 an hour. Did the worst job to get that $12.00. Every month these guys got 2 hours of pay from us and that was the representing us. My tolerence for unions is out the window.
Can’t spell commented. Also on those 5 days off what the company did was use the 4 days off after graveyard shift and I lost 1 day of Swing shift. They didn’t tell the union any of it so you think I will? I wouldn’t hesitate to work for Toyota in a plant. Every big 3 truck I come across especially those drivers who brag about the big 3 I just chuckle because they don’t know where their truck was made.
Mickey – Didn’t notice your spelling error. Also didn’t realize the company suckered you into doing their work for them. Glad to hear those days are long behind.
I wouldn’t say Ford is less profitable now. They are making money again and producing magazine worthy cars and things seem to going their way. All Im reading about Toyota lately is how many more millions of cars they are recalling. I don’t think there is the big difference in car quality as there used to be. At least when you buy an american name plate,most of the money stays in the US.
Mike – I’m with you in most respects, but I think you might want to qualify the “most of the money stays in the US” comment. It really depends on the model you buy…the Fiesta and Fusion are both mostly made in Mexico, so most of the money goes there on those Fords.
I’m a big Ford fan, btw, but I think it’s a misnomer that buying a Ford, GM, or Chrysler is better for the US than buying a Toyota, Honda, etc. It’s important to look at the domestic content sticker on the particular model you’re considering.
Thanks for commenting.
Yep, no one can disagree that the tundra and many other Toyota vehicles are made in the USA with more USA made parts employing much more so USA people than a lot of domestic Big 3 mfgs. with their overseas made vehicles. The days of Honda and Toyota bashing because they are based in Japan/overseas are history and anyone who disagrees is an idiot and not worth deserving talking to. I too worked for a division of GM back in the 90’s (no plant, office worker NON-UNION unlike the UNIONIZED GM plants). Our office, non union, got a 2 year pay freeze and had to wait until almost 3 years to get any type of pay increase and when that came, it was pretty much across the board 2.5-3.2%. That is when 1/2 the office quit in the process thus creating 2 1/2 times more work for us loyal NON UNION workers who was stupid enough to stay for around 8.50-9.00 per hour – woweeee!! All the while the UNIONIZED GM plants had NO pay freezes and making of course at least double the amount of pay if not triple with the same benefits. If it weren’t for the cheap benefits of which I never used since young, healthy, and single, NO ONE would have worked there. I am totally against UNIONS of any kind these days, but back in the say 50’s and 60’s before I was born I am sure they served a purpose for equal rights/benefits for all at the time.
mk – I think it’s interesting that unions seem to have lost a lot of prestige in the eyes of younger folks. I think we’re about the same age (I’m 31) and I too fail to see the purpose of a union…all the situations that I’ve interacted with union workers/work forces, I can’t say I walked away thinking “Man, that sure is a good way to run things.”
One man’s opinion: I think unions force a mob mentality on otherwise excellent workers. While there are thousands of great employees who just happen to be union, there are probably thousands of terrible employees who only have a job *because* they’re union…and that doesn’t sit well with me.
Thanks for commenting!
My 2 cents…..you’ll never please everyone. I like the fact it’s creating or transferring jobs to an area that could really use them.
TXTee – For sure. I just find it hard to believe that Toyota gets criticized after GM, Chrysler, and Ford laid off so many workers in the last 2 years. Seems sort of ridiculous.
When and if all the unions are gone let me know how you like it
all this talk about Unions…when the cost of labor is so small compared to overall production costs. I think everyone assumes Ford and GM are making rational cost savings decision. Isn’t it more likely that the are doing the whole “Globalization” thing because it is trendy on Wall Street? How expensive are their operations now that they have to ship parts and materials thousands of miles…The first Ford was right on: hire lots of workers, pay them very well. It costs little and Americans will be loyal.
Paul – First, very smart comment. Thank you.
I’ve tried for a long time to determine what percentage of a vehicle’s costs are labor. The numbers I’ve found range from 8% to 15%. So, just as you say, labor costs are a small part of the picture.
Still, if vehicle manufacturers can only make 10% net profits in a good year, a very slight disadvantage in labor costs (say, only 10%) could cut profits by an equal amount…in a good year. In a bad year, a 10% labor cost disadvantage could erase all of an automaker’s profits.
However, the issue with UAW “team members” isn’t just costs. Long-term quality is critical to an automaker’s success, and for many years UAW-staffed assembly plants were more expensive AND lower quality.
While these quality gaps have been closed considerably, it’s been well documented that UAW work rules (and a general lack of worker accountability) caused numerous quality problems for decades. Frankly, I think the improvements in quality are temporary…as Ford, GM, and Chrysler-Fiat recover and become profitable again, UAW workers will once again become entitled and angry. Let us not forget: union built vehicles where the best money could buy in the 50’s, but 30 years later they were the worst on the planet. I believe this is cyclical – it’s only a matter of time until the same thing happens again.
While I hear what you’re saying – unions aren’t the only problem – they’re an important factor. Just like bad corporate leadership, globalization, etc.
Thanks for commenting! 🙂