Archives: Toyota sweats U.S. labor costs

[Omaha Steve]

http://www.freep.com/article/20081212/BUSINESS01/112120001/1002

INTERNAL REPORT: Slow the pay growth by 2011

BY JASON ROBERSON • FREE PRESS BUSINESS WRITER • December 12, 2008

Toyota Motor Corp. must hold down growth of its U.S. manufacturing wages and benefits, which are among the highest in the auto industry and are growing faster than the company's profit margin, according to a high-level company report obtained by the Free Press.

The report from Seiichi (Sean) Sudo, president of Toyota Engineering & Manufacturing in North America, said Toyota should strive to align hourly wages more closely with prevailing manufacturing pay in the state where each plant is located, "and not tie ourselves so closely to the U.S. auto industry, or other competitors."

Sudo's report to top managers said the Japan-based company projected a $900-million increase in U.S. manufacturing compensation by 2011, and human resources officials were working on trimming that by one-third.

The drive to hold down costs may boost UAW organizing efforts, if Toyota workers balk at the possibility of smaller raises, reduced benefits or greater demands for productivity gains. But the plan also illustrates that the world's most-profitable automaker is going to keep relentless pressure on Detroit and its signature industry.

The Free Press reported last week that at least some nonunion Toyota workers for the first time last year earned more than UAW assembly workers for Detroit's automakers.

Auto experts and Toyota's workers say it is ingrained in Toyota's culture to sweat over trying to save $300 million five years down the road even as the company rakes in more than $1 billion a month.

FULL story at link.