TMMK’s James discusses worker discipline and imagination behind Toyota’s success in Georgetown
By Ed Lane
In 2010, Wil James became the seventh president of Toyota Motor Manufacturing Kentucky Inc. Since beginning his career with Toyota in 1987, supervising a team of 20 people, James has served in multiple leadership roles within Toyota’s network of manufacturing operations across the U.S., including senior vice president of Toyota’s vehicle plant in Indiana from 2008 to 2010 and prior to that, president of the automaker’s Long Beach, Calif., subsidiary plant, which produces vehicle parts.
From 2003 to 2006, James served as vice president of manufacturing at Toyota Kentucky, after having been promoted multiple times following his career start nearly two decades earlier. He is involved in numerous community organizations and currently serves as chair-elect of the board of directors for the Kentucky Chamber of Commerce. A native of Virginia, James earned a bachelor’s degree in mechanical engineering technology from Old Dominion University.
Maintaining the work ethic and ingenuity of a skilled workforce
Ed Lane: How long has Toyota Motor Manufacturing operated in Georgetown, how many employees work at the Georgetown plant and how many vehicles were manufactured in Georgetown in 2013?
Wil James: TMMK incorporated in 1986. I was hired in 1987. Our first vehicle came off the line in May of 1988. The number of employees varies a little depending upon the volume of sales, which determines the speed of our line and the number of people. In general, employment averages about 8,000 at TMMK. Last year was a pretty good year; our team built 504,000 vehicles. One of the additional nuances of the auto industry is that a plant will typically build either vehicles or engines. We build both on site here. Last year TMMK probably built around 650,000 engines.
EL: Toyota announced the Georgetown plant would assemble the Lexus ES350 beginning in 2015. How will adding Lexus as a new product line affect TMMK’s operations in 2015, from the standpoint of the number of employees and total production?
WJ: As I’ve mentioned, TMMK’s basic annual capacity is about 500,000 vehicles. The Lexus will add an additional 50,000 vehicles, so our new base capacity will be around 550,000, plus another 750 or so employees. The other impact is continually focusing on improving vehicle quality and our key performance indicators, and Lexus, which will be launched in the fall of 2015, is another opportunity to act as a catalyst for TMMK to further accelerate its improvement activities. As we’re preparing for Lexus, TMMK will put a lot of those practices in place for the Camry, Avalon and Venza and improve the quality of all of its products.
EL: What were some of the top reasons Toyota elected to build Lexus in Georgetown?
WJ: First of all, Toyota’s corporate philosophy is to build autos where we sell them. A significant amount of the Lexus volume is sold in North America, so coming to America made good basic sense. But TMMK was considered for a variety of other reasons. TMMK is the oldest wholly owned vehicle manufacturing plant for Toyota in North America – there is a lot of history here. Our team members have a lot of maturity and knowledge of the Toyota system, and TMMK is the most decorated vehicle plant for Toyota, in terms of quality, in North America. Some of these factors made it a natural fit. Also, the basic platform for ES is very similar to the platform for Camry and Avalon. So it was a good overall match for the business.
EL: Will the Lexus production line be totally different from the Camry’s?
WJ: We’re actually building an entirely new third line for Lexus. Right now in Line One we build Camry and Avalon, in Line Two we build Camry and Venza, and then Line Three will be exclusive to Lexus.
EL: Some of the incentives for funding Toyota’s Lexus expansion were made possible by state and local government. How would you describe Toyota’s working relationships with Gov. Steve Beshear and Secretary of the Economic Development Cabinet Larry Hayes?
WJ: We first started discussions about possibilities for Lexus a few years ago, and the conversation just gradually came together as some of the facts became more clear. Our working relationship with the governor and Larry Hayes and the entire legislative branch in Kentucky has been exceptional. TMMK has always felt that it’s had a receptive ear for those discussions.
In terms of the incentives, Toyota had some preliminary discussions about what that could possibly mean a couple of years back, and it all just came together. It made sense. One of the things that we’ve done over time is try to make sure that everyone was very clear on what our intentions, thoughts and options were. We’ve brought members from the legislature to the plant and actually shared with them what we had in mind so that they could have a clear image of what this was all about. This was for the Lexus project. I assume we’ll be talking more about the I-75 interchange and the Bluegrass Community and Technical College training center.
EL: The Georgetown plant was established in 1986, and some of its first employees may be approaching retirement age. What initiatives has TMMK undertaken to recruit and train new employees?
WJ: First of all, just last year TMMK gave all of our employees that were 22 years and higher in terms of seniority an opportunity to take what we call the Next Step program (allowing the company to guide the timing of planned retirements). This was an incentive that allowed those who wanted to do something different with their lives to be able to plan that. As you mentioned, we now are at the point where we have a pretty significant number of folks who are in their 24th or 25th year, and we felt that if everybody who could retire did so at the same time it would be unmanageable. That gave TMMK a chance to put together a program of how it could go out into the community and in a managed fashion start thinking of ways to get employees cross-trained, so to speak, before some of our other members took their retirement from the company. And that worked very well.
We had a little below 500 team members who took the Next Step plan last year. That was a number we could handle in terms of transition. It meant a lot of other movement in the plant, but we were able to handle that, and now we’re basically settled back down. Not everybody decided to go that way, and we still have team members who are taking retirement. I signed four of them this week. But future retirement will be a more orderly number going forward.
EL: What type of educational background and work experience would a new hire at TMMK tend to have?
WJ: It is not necessary to have auto industry experience; we teach all of that. A fair number of our original employees did have college degrees. Now, I think I would say that a lower percentage of our entry-level team members on the floor are coming in with college degrees.
EL: Who are the partners helping to underwrite the cost of the new facility and the workforce training program for skilled workers?
WJ: You’re talking about the Advanced Manufacturing Technician (AMT) program. When I was commenting before, I was talking about production workers. But our skilled worker program is a whole different direction. A number of years ago, we recognized that our skilled workers were typically our older workers. Some of them had retired from somewhere else before they came here. They were typically our older workers, and we knew that probably in a 20-year-or-less range some of them would be retiring. So we started partnering with local educators, particularly with BCTC (Bluegrass Community Technical College), and developed a program, the AMT program, to start educating future skilled workers.
Students in the AMT program come in through a variety of avenues. Some come from high schools, some from other technical schools, some from other companies. We take them through this program where it’s two days in the classroom, three days working on the floor. What they’re paid in those three days basically covers the cost of two days of education. Students leaving the program are able to move directly into skilled employment. And typically, if they use those funds properly, they’ll leave the AMT program debt free.
The program is so valuable because most manufacturing executives today indicate their most significant concern is a lack of skilled workers. The same applies for TMMK, so we thought this program would be a great way to cover our need. But we’re finding it is also just as beneficial in covering the needs for our suppliers and other manufacturers. That’s why the BCTC program and planned training facility in Georgetown that the state is currently looking at is so important. It multiplies the volume of students that can go through that program.
EL: I saw the proposal for the training facility; it’s a $24 million project. What is the status on that? Has it been approved by the General Assembly?
WJ: In discussions we’ve had with the governor and with members of the legislature, we’re pretty comfortable that it is in the proposed state budget and is being discussed by the General Assembly right now. One of the first things a corporation will look at when it’s considering locating in an area is whether it has the workforce needed to get the job done. And typically it’s the lack of skilled workers that is the most challenging issue.
Our definition of skilled staff is a multiskilled worker who has an understanding of most of the skilled trades – our folks will do electricity, electronics, pipefitting, millwright work, the gamut. And so our training program provides everyone with those skills. Most skilled workers who come into the program have one discipline and are very good in that discipline, but they don’t have any real exposure to the others. This program broadens them out. It helps, I think, any manufacturer to have a multiskilled worker who can meet various production needs.
EL: Will the training facility in Georgetown, when fully operational, be able to customize the training for different companies?
WJ: The program is always open to being tweaked to meet the needs of the end customer, but right now the program we have with BCTC is broad enough and open enough that it appears to be able to meet the majority of companies’ needs. But I would expect that the BCTC program would always respond to the specific needs of a company.
EL: Does TMMK have to aggressively recruit people to go into the training program?
WJ: Toyota doesn’t have a major problem getting enough applicants. However, we don’t just wait for folks to come. We have a group of people who go around the state and visit high schools, trade schools, a variety of different avenues to tell people about the program. I don’t know if we’ll need to be out there marketing long-term, but early on this program was so different from what people were used to seeing, we thought it advisable to do that.
One of the things Toyota does is identify schools that are really strong in the STEM (science, technology, engineering and math) programs. Project Lead the Way really focuses on STEM programs. It’s not in every school district, but it’s in a majority. With our school tours, TMMK reaches out to those schools in particular. Manufacturing in general, for some reason over the years, has sort of been shunned. In the past, manufacturing was perceived as dirty, difficult work. But as you’ll see when you visit our plant, manufacturing today is considerably different. These are great jobs with excellent working environments.
EL: How many direct and indirect employees does Toyota employ in Kentucky?
WJ: Toyota has 8,944 direct employees in Kentucky, and its indirect employment at over 100 supplier companies is 12,731. That’s a total of 21,675 people whose employment is involved with Toyota.
EL: Toyota has a long record of recruiting supplier firms with minority ownership. How effective has this initiative been in Kentucky?
WJ: Toyota has made good, strong progress in that regard. Twenty years or so ago, it started the Opportunity Exchange in Northern Kentucky. We actually invite all of our Tier One suppliers and as many minority suppliers as we can identify to meet with us and talk about potential business opportunities. As a result, there’s been a significant amount of minority- and woman-owned business that has been conducted, not only at Toyota but also with our supplier firms. The Opportunity Exchange supports our program for MB or WB programs, and our percentage of business with MBs has steadily and continually increased over the years.
EL: Ford is introducing a new truck made with an aluminum body and frame instead of steel. By reducing weight, the fuel economy for the aluminum truck is anticipated to be improved. Will this be a new trend in auto manufacturing?
WJ: Absolutely. Everybody is looking for opportunities to get more miles per gallon out of their products. One way of doing that is reducing the weight of the vehicle. There are different ways to do that. One is aluminum. One is higher-strength steel, where you have a thinner-gauge but higher-strength steel. There are other composite parts that can be looked at, too. Everybody’s looking at those opportunities, including Toyota.
EL: The Environmental Protection Agency set a fleet average goal of 54.5 MPG by 2025. Do you have any thoughts about that? Is that achievable? Do you think it will require more hybrid gas-and-electric vehicles, or do you think the gasoline engines will be made even more efficient? I know also that Toyota has announced plans to sell hydrogen fuel cell vehicles in 2015. Will TMMK be building any fuel cell vehicles here, or will they be made elsewhere?
WJ: As of now, fuel cell vehicles are not planned in our immediate future. However, that’s sort of a technology issue. As technology jells and the opportunity presents itself, Toyota is constantly looking at opportunities to change.
To answer your original question regarding future EPA MPG standards, it’s going to take a variety of technologies; there is no one solution. You’ll see more hybrids, changes in the gasoline combustion engine, turbochargers being added to engines, electric vehicles and plug-in hybrids. It doesn’t appear, at least at this point, that there’s any one solution that’s going to be able to resolve all of the needs. Customers want to have a sense of choice.
EL: How would you describe your career at TMMK?
WJ: I started here almost 27 years ago. I didn’t live in Kentucky before that, so that was my first chance to meet the people here. Toyota has been an amazing opportunity for me. And one of the things that I have been the most impressed with has been the workers that we have here – I mean, the sense of concern that people have for their work. The Toyota production system requires a certain amount of discipline, and I’ve been blessed with that and with the ingenuity and imagination that people have brought to work here. It’s been fantastic. Any time I talk about anything that involves Toyota, I feel that I’d be remiss if I didn’t also talk about how blessed this company is to have the employees that we have. A lot of our success is based on their ingenuity, their imagination and their willingness to be a part of the direction that the company is asking us to go.
Ed Lane (firstname.lastname@example.org) is chief executive of Lane Consultants, Inc. and publisher of The Lane Report.
One-On-One: Toyota Motor Manufacturing Kentucky President Wil James
TMMK’s James discusses worker discipline and imagination behind Toyota’s success in Georgetown
Performing surgery on hospital budgets
Executives work to cut expenses, but not quality, as healthcare reform and price-conscious patients transform the marketplace for major providers
BB&T believes in community bank model
Kentucky region strategy uses listening skills to market a broad-based portfolio of services
Stocking the state’s startup tank
Accredited investors with business experience spur Kentucky entrepreneurial growth and potential job creation
Will Bitcoin pay off?
Internet fad or global game changer, new digital ‘cryptocurrency’ has backers in Kentucky
The Lane List — March 2014: Largest banks in Kentucky
Ranked by market share of deposits in Kentucky as of June 30, 2013 (most recent figures available)
The Lane List — March 2014: Largest CPA firms
Ranked by number of CPAs employed in Kentucky
Return of the virtuous economic cycle?
Financial advisors see overall improvement in 2014 but with plenty of risk to manage along the way
Slow, steady progress is rebuilding bankers’ confidence
Consumer, business and banking balance sheets poised to cautiously begin a virtuous cycle
Business briefs — March 2014
A compilation of economic news from across Kentucky