Cut costs or face an uncertain future – Toyota

Toyota has sent a stark message to employees at its massive Georgetown, Ky. assembly plant, saying they needed to help suggest ways to cut costs or face an uncertain future. Bloomberg reports that the message came via an internal video it obtained, which explained that Toyota can currently make more money selling a Camry sedan built in Japan and shipped to the U.S. than from one made in Kentucky.

“I’m not sharing this to scare you, but to heighten your awareness of the current risk we now have,” Wil James, the plant’s manager, said in the video. Bloomberg reports that James said Toyota isn’t planning to close the factory and plans to continue investing in it for the next 30 years. “But all of this is on the assumption that we can make as much progress in cost reduction and efficiency as we’ve made in quality and safety.”

The Georgetown plant is Toyota’s largest and the second-largest auto assembly plant in North America by volume, with about 501,000 vehicles produced in 2016, according to IHS Markit. It employs more than 8,000 permanent employees and 1,500 temporary workers. The video has reportedly created tension among some employees who want to create a vote over being represented by the United Auto Workers union.

Toyota has been working to free up more resources to put toward research and development into electric vehicles and artificial intelligence, and is turning to its vaunted, efficient production system for savings. Earlier this year, it announced a $1.33 billion investment in the Georgetown plant to implement the Toyota New Global Architecture, a more flexible production system. In the video, James told workers they’d be hearing more about cost-cutting moves in the next few weeks, and he asked for “a lot more ideas to reach parity.”

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