Toyota Tells Kentucky Camry Plant To Cut Costs Or Lose Production To Japan

Illustration for article titled Toyota Tells Kentucky Camry Plant To Cut Costs Or Lose Production To Japan
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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.

1st Gear: A Message To The Staff

Automotive manufacturing is a global business and it has been for a very long time. Some American Toyota employees were reminded of this recently.


See, Toyota actually makes more money building a Camry in Japan, shipping it to Kentucky and selling it here than it does selling one built in the company’s Georgetown, KY, plant. This rather sobering news was delivered to the plant’s employees in the form of a 2.5-minute long internal video that was obtained by Bloomberg.

From the story:

“I’m not sharing this to scare you, but to heighten your awareness of the current risk we now have,” Wil James, who has managed the plant for more than seven years, said in the video dated this month. He said Toyota isn’t planning to close the factory and continues to invest 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.”

Toyota, like most other automakers, is investing heavily in autonomy and electrification, so the money has to come from somewhere. Cost-cutting and shifting around priorities is one of the easiest ways to reallocate funds. The good news here, as Bloomberg points out, is that Toyota doesn’t seem to be leaving its U.S.-based operations in the dust.

We already know that Toyota and Mazda are planning to open a joint manufacturing plant somewhere in the U.S., which means that manufacturing here isn’t dead.


But Toyota is still a business with its own best interests at heart. James told the workers that “they’ll learn more about the cost gap and asked for ‘a lot more ideas to reach parity.’”

So, the message is clear (to me, at least): figure out how to balance out the cost issue or we’ll go somewhere else where it’s cheaper.


2nd Gear: Trumpchi Cars Might Be Coming To The U.S.

Remember Trumpchi? The unfortunately named car brand from China’s Guangzhou Automobile Group (GAC)? It might be headed here in the not-too-distant future!


GAC has been talking with Fiat Chrysler about “models, production and sales,” recently as GAC gets ready to start selling Trumpchi cars here, reports Bloomberg. Relations with GAC could really help FCA with expanding in China, while FCA could help GAC with gaining a foothold in the U.S.


Still, it seems like Trumpchi cars won’t hit our shores until at least 2019. From the story:

Guangzhou Automobile also has local ventures with Toyota Motor Corp. and Honda Motor Co. and the longtime manufacturing partner for carmakers plans to start exporting its own Trumpchi sport utility vehicles in the U.S. in 2019. It will move to produce in the U.S. if American consumers welcome Trumpchi models imported from China, Feng said.

“We are very satisfied with our cooperation with FCA,” the executive said. “We have yet to reach a conclusion on how to cooperate with FCA when we begin manufacturing in the U.S., and we have also not begun discussions with other Chinese automakers on whether to make cars together in the U.S.”


Trumpchis are actually pretty popular in China, according to the New York Times. The GS8 mid-size SUV is the first model that the company wants to sell in the U.S., a market that no Chinese automaker has managed to successfully break into yet.

Yet, there’s still the issue of the name (which they insist is purely coincidental):

Top executives and their advisers are agonizing, however, over whether, and how, to change the name for the American market.

“There’s no Obama-mobile, that’s a cultural thing, there’s no Clinton car,” said Robert C. Maling Jr., a retired Lexus executive who is now an adviser to GAC. “It would be confusing to the American public to have the Trumpchi name.”


Honestly, dude? Keep the name. The President might see it as praise and tweet about it. Free advertising!

3rd Gear: Supplier Help

The Renault, Nissan and Mitsubishi alliance is also gearing up for a reallocation of funds for new technology development. In order to invest and still stay in the black, CEO Carlos Ghosn says that delegating tasks is now more important than ever.


Speaking to Automotive New Europe, Ghosn asserted that suppliers in particular will play a huge role. From the story:

“The difficulty of the task right now is that we’re in an era when most of the parts and technologies we need do not exist yet,” Ghosn told Automotive News this month at the alliance’s offices here.

“Because of the huge amount of new technology coming, the r&d costs are going to go up. We need to converge and have common platforms. And we need to have a much more serious conversation about what work should be done outside the company.”


That sounds a lot like Toyota’s internal memo. Cost-cutting, reallocating resources in order to stay competitive and profitable? It’s not personal, it’s just business.

4th Gear: It Finally Looks Decent

Man, did I hate Lincoln’s split-wing grille. That look went stale faster than Doritos left out over night. Thankfully, Lincoln’s been getting rid of it model by model and the new Lincoln MKC small SUV (there’s a ring to that) is the next one to get the new corporate face.


Lincoln seems very happy with the car’s new design, if you want to trouble yourself with reading the press release. Anyway, the inside is supposed to be nicer and more luxurious than ever. There’s active park assist and a radar system that helps you not run over pedestrians.

There are two engine options:

Three technologies – turbocharging, direct injection and twin independent variable camshaft timing – are responsible for a powerful engine offering for the new Lincoln MKC. This twin-scroll turbocharged 2.3-liter engine producing 285 horsepower and 305 lb.-ft. of torque allows Lincoln MKC to offer an available towing capacity of 3,000 pounds when properly equipped.

Both the powerful turbocharged 2.3-liter and the standard turbocharged 2.0-liter engine delivering 245 horsepower are designed to be exhilarating and fuel efficient. Either option can be paired to Lincoln’s intelligent all-wheel-drive system, which delivers enhanced all-weather capabilities and sportier performance.


Anyway! Lincoln will sell boatloads of these things, I am sure. Good for them.

5th Gear: Another Mazda6 Recall

But it’s not for us, so you can relax a bit.

Due to a potential issue with the Mazda6's brake-assist system in the cold, Mazda is recalling 206,570 cars in China, reports Reuters. A Mazda spokesperson told the outlet that “a brake-assist system in the affected midsize sedans could malfunction under extremely cold weather.”


Eleven “small” accidents were caused by the issue, but thankfully nobody was hurt.

Reverse: Verrazano-Narrows Bridge Opens

If you haven’t seen or driven across this bridge before, it’s quite a marvel. Upon its completion in 1964, it was the world’s longest suspension bridge before it was surpassed in by another bridge built in the UK.


A New York Times story that outlined the day of the bridge’s opening read:

A young man in a rented tuxedo, driving a pale blue Cadillac convertible with flags flapping from the fenders, was the first man to cross the bridge and pay the 50-cent toll. He, together with his young companions (also in rented tuxedos), had parked all week behind the Staten Island toll gate to assure their official position as the first to cross.

When they crossed the 6,690-foot span, passing through the arches of the two steel towers that are as tall as 70-story skyscrapers, the youths were cheered by the crowds standing on the Brooklyn side of the bridge.


Neutral: Is It Sustainable?

Do you think American auto manufacturing has a future in the United States? Or do you think that, despite the new plants and the shifting of labor to America, ultimately the manufacturing jobs will go to where labor is cheapest?

Writer at Jalopnik and consumer of many noodles.

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American manufacturing can be saved only by shifting from employer provided healthcare to a single payer system with cost controls.

I don’t know why this is still a discussion.