Toyota's New Plant Aims at Heart of US Truck Market Texas-sized ambition With new plant coming to San Antonio, Toyota takes aim at the heart of U.S. truck market. Christine Tierney / The Detroit News SAN ANTONIO-- Marsha Shields, one of the winners of the Ford Motor Co. president's award for outstanding dealers, stood in a receiving line in April 2003 waiting eagerly to meet CEO Bill Ford Jr. Her father, Red McCombs, had sold Ford vehicles since the early '50s and she grew up hearing about the Ford family. When Bill Ford approached and saw from Shields' nametag that she was from San Antonio, he came straight to the point. "'Why is Toyota building a plant in San Antonio?' " Shields says. "That's all he wanted to talk about." At the time, Toyota hadn't confirmed that it would build a pickup truck plant in San Antonio, but the rumors already were rattling Detroit's automakers. Full-size pickups like the Ford F-150, Chevrolet Silverado and GMC Sierra are among the U.S. automakers' most lucrative vehicles, and Texas is the heart of the American truck market. One in four vehicles registered here is a full-size pickup, nearly double the national average. By building a plant here, Toyota signaled its intent to muscle its way into this all-American segment. The Japanese automaker has made big inroads in other segments -- Toyota's Camry is the best-selling midsize car in the United States, and the Lexus RX300 is the most popular luxury sport utility vehicle. But Toyota hasn't fared well with versatile full-size pickups, vehicles which double as rugged work vehicles and personal transport. Its early offerings were too undersized and underpowered to appeal to truck buyers, who are more loyal to the domestics than car buyers. And the Big Three have vigorously defended this turf, providing good trucks with a wide variety of styles and engines. Just as important, they provide good service to their customers, many of whom are small-business owners who rely on their trucks to make a living. Detroit's automakers, including DaimlerChrysler AG's Chrysler Group, have 57 percent of the overall U.S. market, but more than 90 percent of the full-size pickup segment. In contrast, Toyota's share of the big pickup segment is less than half of its overall 13 percent share. Nissan Motor Co., the first Japanese automaker to roll out a full-size pickup, has yet to reach the 100,000-sales-a-year target it outlined in 2003 for its new Titan. It's a tough market, but Toyota is putting in capacity to build twice that many Tundras each year at the $850 million San Antonio plant. Unlike large sport utilities, which lost some of their appeal during the recent spike in gas prices, full-size pickups still sell well, accounting for 15 percent of U.S. light vehicle sales, up from 8 percent in the early 1990s. "It's a big market, and it's growing," says Jim Press, president of Toyota Motor Sales USA. After retiring its smallish T100 in the late 1990s, Toyota has gone back to the drawing board several times. In late 2003, it rolled out a more powerful and roomier Double Cab version of the current Tundra -- and hinted at the next-generation model with the big and bold FTX concept shown at the 2004 North American International Auto Show in Detroit. Technicians have been putting the new truck through its paces at Toyota's proving grounds in Shibetsu, on the windswept northern Japanese island of Hokkaido. When Paul Williamsen, a Toyota product education manager in California, visited Shibetsu earlier this year, he saw large U.S.-style trailers in the parking lot measuring up to 30 feet long that are used in towing tests. After being criticized for failing to grasp how Americans use their trucks, Toyota has learned its lesson. Toyota hasn't shown the production version of the new Tundra to the public. But Shields, who owns six dealerships, including Ford and Toyota outlets, feels confident after seeing pictures. "This is Texas. Bigger's better. More power's better." Big skies, big plant On a 2,000-acre stretch of what was once part of the Walsh Ranch, one of the oldest in the country, Toyota has nearly completed the construction of a 2-million-square-foot assembly plant, and technicians are installing the heavy vehicle-manufacturing equipment. Large earth-moving vehicles trudge along the lanes, as 21 auto parts suppliers put up operations on the site. It's the biggest supply park at any Toyota factory, and Hidehiko Tajima, president of the Toyota Texas plant, says he believes it may be the biggest in North America. "Other companies have supplier parks, but many times, they're just warehousing or assembly operations. Here, you'll see stamping, you'll see true manufacturing." The main advantage of having suppliers on-site is that the vehicle assembly plant managers can alert suppliers sooner if there's a problem. If there's a defect in a shipment that has traveled a long way, "there's a risk that all the parts in a long pipeline also have the defect," Tajima says. During a tour of the site in his Tundra, he points out a large rectangular structure rising out of the main plant -- the superstack, or super-chimney. By building one large chimney for the plant, technicians can keep track of the plant emissions better and react faster if there's a spike. Toyota has superstacks at some Japanese plants, but this is its first in North America. Tajima has worked previously in the United States, serving as a plant coordinator between 1987 and 1991 at Toyota's Georgetown, Ky., plant. But the scale of Texas leaves him in awe. "Texas is 1.8 times bigger than Japan," he says. At each of Toyota's five other North American assembly plants, the automaker built one factory first, and added a second one later. Toyota hasn't said whether it will follow that pattern in San Antonio, but there's room. Tajima points to a big blank space on a map of the site between the new assembly plant and the marshalling grounds, where vehicles are held for shipment. "Toyota hasn't committed to an expansion, but it's our hope," says Mario Hernandez, president of the San Antonio Economic Development Foundation. That would also boost business for the suppliers who have followed Toyota to a part of south Texas that has little other manufacturing activity. Last winter, when Toyota started accepting applications for 2,000 jobs at the plant, more than 100,000 flowed in in two weeks. Toyota's starting wages at the plant are $15 per hour, plus benefits, and will average more than $20, Hernandez says. That compares with the average manufacturing wage in the region of about $12. "You see how far above the market they are," he says. Shaving off seconds So far, Toyota has hired more than 400 team members, and it is training team leaders and multi-skilled line workers at its pickup plant in Princeton, Ind. On Nov. 10, one of the new Texas team leaders, Randy Pittman, was perfecting his bolt-drilling technique in Princeton. Pittman is right-handed, and he practices picking up four or five bolts from a clear plastic container with his left hand without looking. If he picks up too many, he will have trouble rolling them to his fingertips in the right direction and could lose half a second fumbling to position them correctly. "Half a second is very valuable to a team member," says training specialist Steve Owens. "Those half-seconds add up." On the first day of the exercise, Pittman and his new fellow workers could drill about 11 or 12 bolts per minute. "By the second day, we got to 21 each," Pittman said. The Princeton plant's role in helping with the startup of the Texas factory marks the first time in Toyota's history that a plant outside Japan has been designated a "mother plant." "It's a burden, but it's a benefit," says Seizo Okamoto, president of the Princeton plant. "By training, each trainer finds their weak point. Teaching is the best training." Toyota also is beefing up sales training in California for its 1,200 U.S. dealers and their employees. Truck buyers typically ask more and more detailed questions than car buyers because many use their trucks to haul or carry equipment. But the growth of the segment, and the rising popularity of crew cab, or four-door, pickups, suggest that more people are choosing pickups for personal transport. Dealers say these buyers tend to be less brand-loyal than customers who need their trucks for work. In Texas, the battleground state, attitudes are shifting. In 2000, only 4 percent of prospective truck buyers in Texas would consider a Japanese brand, according to consulting firm CNW Marketing in Bandon, Ore. Earlier this year, that figure had risen to 20 percent. Hispanics, who represent a majority of the population in San Antonio and surrounding counties, buy Japanese brands more than the market as a whole. By putting down stakes in San Antonio, Toyota is stepping up the pressure on the Big Three. Web source: http://www.detnews.com/apps/pbcs.dll/article?AID=/20051128/AUTO01/511280404/1148
