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Toyota to Establish New North American Headquarters
Manufacturing, Sales and Marketing, Corporate and Financial Services Headquarters to Unify in New, Shared Campus in Plano, Texas

Toyota Technical Center in Michigan to Expand as Part of Increased Investment in Engineering Capabilities


Toyota today announced that it is establishing a new headquarters in North Dallas (Plano), Texas for its North American operations in a move designed to better serve customers and position Toyota for sustainable, long-term growth.

Within the next three years, Toyota’s three separate North American headquarters for manufacturing, sales and marketing, and corporate operations will relocate to a single, state-of-the-art campus in Plano. Toyota’s North American finance arm also plans to move its headquarters to this new shared campus. Altogether, these moves will affect approximately 4,000 employees.

At the same time, Toyota will expand the Toyota Technical Center (TTC) in Michigan to accommodate the relocation of direct procurement from Erlanger, Ky., to its campus in York Township near Ann Arbor. This expansion is part of an increased investment in engineering capabilities and will accommodate future growth in product development.

The transition to Plano from three current headquarters locations – affecting approximately 2,000 employees at Toyota Motor Sales, U.S.A., Inc. (TMS) in Torrance, Calif.; about 1,000 employees at Toyota Motor Engineering & Manufacturing North America, Inc. (TEMA) in Erlanger, Ky.; and certain employees at Toyota Motor North America (TMA) in New York, N.Y. – will begin with initial small groups this summer. However, the majority of these employees will not move until construction of Toyota’s new headquarters is completed in late 2016 or early 2017. Toyota Financial Services (TFS) is not expected to transition to Plano from its current headquarters in Torrance, Calif., until 2017, which will affect around 1,000 employees.

Jim Lentz, who was named Toyota’s first chief executive officer for the North America Region in 2013, said: “With our major North American business affiliates and leaders together in one location for the first time, we will be better equipped to speed decision making, share best practices, and leverage the combined strength of our employees. This, in turn, will strengthen our ability to put customers first and to continue making great products that exceed their expectations. Ultimately, enabling greater collaboration and efficiencies across Toyota will help us become a more dynamic, innovative and successful organization in North America. This is the most significant change we’ve made to our North American operations in the past 50 years, and we are excited for what the future holds.”

In support of the communities in California and Kentucky, Toyota also announced a $10 million philanthropic commitment to provide continued funding for local non-profits and community organizations in these states over a five-year period beginning in 2017, over and above existing commitments.

The establishment of a new headquarters builds upon previous efforts by Toyota to enhance regional autonomy, self-reliance and responsibility. While the sales and marketing, manufacturing and corporate business units will retain their responsibilities and operating names, Toyota expects that new cross-functional teams will identify and execute on ways to serve the broader North American organization.

Toyota will construct a new, environmentally-sustainable campus facility in Plano, which is expected to take two or more years to construct after groundbreaking in the fall of 2014. Until the new campus facility is complete, initial small groups of employees will work from a temporary location in the Plano area.

Toyota will also build a new facility on TTC’s York campus (subject to final approval of state and local incentives) to accommodate approximately 250 direct procurement positions currently based at TEMA in Erlanger.

In addition, about 300 production engineering positions based in Erlanger will be relocated to a new facility to be built at Toyota Motor Manufacturing Kentucky (TMMK) in Georgetown, Ky., while approximately 1,000 TEMA administrative positions will transition to Plano.

Toyota’s 10 manufacturing plants in the U.S. will not be impacted by these changes. Also, the following Toyota units will not be impacted at this time:

-Toyota regional field offices and Lexus area offices
-Operating units in Canada, Mexico and Puerto Rico
-Toyota Financial Service’s regional offices, sales offices, service centers and its bank
-Calty Design Research facilities
-Toyota InfoTechnology Center
-Toyota Racing Development
-AirFlite Inc.
-Logistics Services Field Locations
-Distribution centers

After moving from its existing headquarters, Toyota will continue to have approximately 2,300 employees in California and 8,200 employees in Kentucky. This includes 750 new jobs being added at TMMK for production of the Lexus ES, which begins in 2015. Toyota will also continue to maintain offices in the New York City area and Washington, DC.

The move will not impact Toyota’s relationship with Gulf States Toyota, Inc. (GST), a private distributor of Toyota vehicles based in Houston, Texas.

Toyota Financial Services (TFS) is a service mark used to refer to a number of entities, including Toyota Motor Credit Corporation (TMCC), Toyota Financial Savings Bank (TFSB), and Toyota Motor Insurance Services, Inc. (TMIS).
 

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Update!

Q&A: Toyota's Lentz on what triggered the move, and the upheaval ahead
http://www.autonews.com/article/20140428/OEM02/140429873
In the wake of Toyota’s announcement that it is centralizing its U.S. operations in Plano, Texas, Toyota North America CEO Jim Lentz spoke exclusively with Automotive News West Coast Editor Mark Rechtin. Here is a transcript of that interview:

What was the genesis of this? Was it Akio Toyoda’s idea? Your idea?

When I was made CEO of North America, Akio made it quite clear that he wants North America to be self-reliant. He wanted me to reflect on whether we are ready to be self-reliant and whether we are structured in such a way to take that responsibility. It became clear to me that, although the four-affiliate structure worked in the past, it was going to get into our way in the future. I wanted to get sales, manufacturing and corporate operations in one location to be more efficient, and to put more resources against engineering and design.

But to prepare the company for the future, you’re going to put it through three years of upheaval and chaos.

Akio wanted me to look further out, to change Toyota to be ready for the next 50 years. Certainly, I’m not going to be around 50 years from now, but when you realize your time horizon is 50 years, the next three years, we’re going to get through it.

How do you see your move as differing from Nissan’s relocation to Nashville in 2006?

As I look back on Nissan’s move, it was about reducing cost and headcount. Ours is really the exact opposite. Ours is about retaining associates, and not finding ways to get rid of them or replace them with cheaper headcount. We are not a cost-cutter place. We are a relationship place. Our relationship with our employees is critical if we want to have good relationships with our customers.

But surely there will be some attrition. Folks have roots where they live. Maybe they don’t want to move to Plano. Do you have a ballpark for how many people won’t make the move?

It’s tough to estimate at this point. We’ll have a better idea later this year when we start putting the structures together. Nissan’s move was a fairly large attrition number. But we have relocation packages for everyone, and that’s typically not what happens. Everyone who goes or stays until the end will be offered a retention package. We are doing a lot of things to encourage people to go [to Texas], or to make a decision. If you move, you get a retention package. If you stay until the very end, but don’t move, you get a retention package. We’re trying to keep as many people as we can.

Some cynics are saying this is a way to clear out aging deadwood in middle management, in that a relocation is cheaper than a reduction in force. Are you going to offer early retirement to encourage tenured managers to not make the move?

There is no plan for early retirement to be offered. We’re taking this on a case-by-case basis. People are going to evaluate career-wise or family-wise if it makes sense for them. There is no targeted reduction percentage. This will happen organically.

What about Gulf States Toyota Distributors? Now that you are in its backyard, what are your plans for it?

As we went through the process of scouting locations, and we knew the Dallas metro area was a finalist, I spoke with GST to make sure they were OK if we chose that location. Our relationship is fantastic. They do a great job for us. There are no plans to change that relationship. I’ll be there Friday to let them know that personally.

In terms of the order of groups leaving, might Lexus or Scion go ahead of Toyota Division, as a smaller-size test case?

I think the sales groups will probably go last. I want them to remain close to the Toyota Financial Services because they are integral partners. And a lot of support functions, like distribution operations, either they all have to go or they all have to not go. We haven’t planned how this campus is going to look yet. We’re going to rent [temporary] space for 500 or 600 people. I don’t want to do double moves. There are no plans in 2015 to move the sales organizations.

What does this move mean to you?

I’ve been at Toyota for 30-plus years, and this is the biggest announcement we’ve made since we’ve been in North America. I am not combining these three legal entities. I am moving them to learn so we can work as one, in one location. In the future, as we become a high-performing group, I may change these three entities into one. Toyota Financial Services also is moving to the campus but will remain a separate organization reporting back to Japan. A big piece is expanding Toyota Technical Center in Michigan, to get direct procurement closer to design, engineering to work closer with the majority of our suppliers, and then production engineering moves to Georgetown [Ky.].

What does Toyota have left to prove? And how does the move to Texas fit into what Toyota wants to be?

What we have yet to prove is what we’ve tried since the beginning: how to build the best cars and provide the best experience to our customers. Having the best collaboration between sales and marketing is the best way. We have production engineering in Erlanger [Ky.], but the demand side of ordering products is in California. So when we get weekend sales reports, and Camry has a great weekend, that report gets fed eventually to production control, who may look at it in the next couple weeks. But [the factory] has no sense of what’s happening in the marketplace. If I can have supply and demand sitting next to each other, with information in real time, and collaborating with each other, that makes us a stronger player.
Toyota to move 3,000 jobs from Southern California to Texas
http://www.latimes.com/business/autos/la-fi-hy-autos-toyota-move-texas-jobs-20140428,0,1792462.story#axzz30ITAE1QP
Toyota Motor Corp. said it will move 3,000 jobs from Torrance to new North American headquarters in Plano, Texas, over the next three years.

The move will affect 2,000 workers in Toyota's U.S. sales and marketing arm and 1,000 positions in its financial services business. That will leave about 2,300 Toyota employees in California.

No Toyota workers will remain at the company’s 2-million square foot office complex in Torrance. The company said it has not yet determined what it will do with the property.

The shift is part of a corporate strategy to locate the employees running its engineering and manufacturing, sales and marketing, financial services and certain corporate functions all on one complex.

“Ultimately, enabling greater collaboration and efficiencies across Toyota will help us become a more dynamic, innovative and successful organization in North America,” said Jim Lentz, chief executive of Toyota’s North America region.

“This is the most significant change we’ve made to our North American operations in the past 50 years, and we are excited for what the future holds,” he said.

Altogether, the moves will affect approximately 4,000 employees nationally.
Toyota will shutter its engineering and manufacturing office in Erlanger, Ky. -- near the Cincinnati-area airport -- with the personnel being distributed to a tech center in Ann Arbor, Mich., the new Plano, headquarters and a new facility at the automaker’s Georgetown, Ky., factory.

Toyota officials said that creating a more efficient corporate structure, not cutting costs, was the primary motivation in deciding to build a centralized headquarters in Texas.

Toyota has long been a Southern California fixture. Its first U.S. office opened in a closed Rambler dealership in Hollywood in 1957. The site is now a Toyota dealership. In 1958, its first year of sales, Toyota sold just 288 vehicles — 287 Toyopet Crown sedans and one Land Cruiser. Last year, Toyota sold more than 2.2 million vehicles in the U.S.

The U.S. branch picked Los Angeles for its first headquarters because of proximity to the port complex — where it imported cars — and easy airline access to Tokyo.

As Toyota grew, it opened its national sales and marketing headquarters in Torrance in 1982. The complex, built where its parts distribution warehouse was once located.

But today, about 75% of Toyota-branded vehicles sold in the U.S. are built in North America — many of them at plants in Texas, Mississippi and Kentucky. Moving the U.S. corporate headquarters to Texas puts senior management closer to those factories.

The company said it has committed to providing $10 million in continued funding for local nonprofits and community organizations in California and Kentucky over a five-year period beginning in 2017.

[For the Record, 12:24 p.m. PDT April 28: A previous version of this post incorrectly said about 2,300 Toyota employees would remain in Torrance. Toyota will retain that number of employees in California, but not in Torrance.]
 

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