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Old 22nd November 2007, 09:39   #1
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Default Toyota-GM plant sued over defect reports

11/20/2007 8:26:00 AM TOKYO -- An employee at a California plant run jointly by General Motors and Toyota is accusing her managers of allowing serious defects to go unchecked, including faulty seat belts and braking, and retaliating when she resisted, according to a lawsuit filed earlier this month.

In the case before Alameda County Superior Court in California, Katy Cameron, a certified auditor who has worked for 23 years at New United Motor Manufacturing Inc., says management routinely deleted or downgraded defects from her reports on vehicles since 2005.

The lawsuit, filed Nov. 6, demands unspecified damages for retaliation against a whistleblower and intentional infliction of emotional distress from NUMMI, Toyota Motor Corp., Toyota in North America and General Motors Corp.

According to legal documents obtained Tuesday by The Associated Press , defects that were intentionally passed over included broken seat belts, faulty headlights, inadequate braking, mirrors falling off, engine oil leaks and steering wheel alignment problems -- all in an effort to decrease the number of defects. It is not clear whether any defects resulted in accidents. When Cameron, a trained expert at spotting defects, complained, her bosses struck back, demoting her twice, accusing her of being crazy and violent, forcing her to submit to mental fitness tests, according to the documents.

An officer at NUMMI, the Freemont, Calif.-based joint venture, threatened to fire her and then tried to get the personnel department to dismiss her, the lawsuit said.
"NUMMI has done everything in its power to try to break Cameron psychologically and force her from the workplace," the lawsuit said. "Cameron is an American hero who will not be silenced by multibillion dollar corporations at the expense of hardworking American consumers and families."

As a result of the persistent on-the-job maltreatment and harassment, Cameron has been getting medical treatment for stress, depression, fatigue, insomnia and panic attacks, it said. She is now on medical leave.
Toyota in Japan declined comment on the lawsuit, saying it was still looking into the allegations. But it did release a statement Tuesday saying it was "tackling quality problems as a top priority."

GM spokesman in Tokyo Michihiro Yamamori said he did not know about the lawsuit.

NUMMI, set up as a joint venture in 1984, produces the Corolla subcompact, Tacoma pickup and Pontiac Vibe wagon. One of the plant's purposes was to have American workers learn Toyota's production methods. It has been the topic of numerous labor relations studies, and the company claims teamwork and safety among its "core values."

Quality problems have been creeping up at Toyota, which traditionally has a stellar reputation for reliability. Toyota's recalls have ballooned over the last couple of years, and President Katsuaki Watanabe has promised to beef up quality control.

Last month, Consumer Reports said Toyota "is showing cracks in its armor" and will no longer get automatic recommendations from the magazine when it releases new or redesigned vehicles. It also removed several Toyota vehicles from its recommended list because of quality issues.

Toyota, which appears to be on track to beat GM as the world's biggest automaker by sales as soon as this year, recalled 766,000 vehicles in the United States last year, down from 2.2 million in 2005, but up from 210,000 in 2003.

The lawsuit says NUMMI management blocked Cameron from communicating with other departments, including the quality division at Toyota in Japan, by barring her from meetings and denying her an opportunity to be considered for travel assignments.

The "Toyota way" of manufacturing is emulated by manufacturers around the world not only because it eliminates waste but also because it empowers the individual worker. In principle, workers are encouraged to stop an entire assembly lines if a problem arises.

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Old 22nd November 2007, 10:07   #2
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Originally Posted by dadu View Post
Last month, Consumer Reports said Toyota "is showing cracks in its armor" and will no longer get automatic recommendations from the magazine when it releases new or redesigned vehicles. It also removed several Toyota vehicles from its recommended list because of quality issues.
Cannot comment much on the lawsuit. As of 2008 model, Consumer Reports recommendations are as follows (only for major producers):

first figure is recommended models/second figure is total models sold

Acura: 5/5
Audi 4/8
BMW 7/10 incl. 3-series, 5-series, 7-series
Buick 3/7
Cadillac 3/7
Chevrolet 5/21
Chrysler 3/9
Ford 12/22 incl. Fusion
Honda 12/13 Only Accord not recommended for 2008 because it is currently in testing and has excellent predicted reliability for previous years.
Hyundai 6/12 Sonata and Tucson recommended but not Accent (which is Verna here)
Kia 3/11
Land Rover 0/4
Lexus 8/10
Mazda 10/13
Mercedes 0/13
Mini Cooper 1/1
Mitsubishi 2/7 Only Endeavor and Outlander recommended
Nissan 11/15
Porsche 2/4
Scion 3/4
Suzuki 0/6
Toyota 13/20 Camry V6, Tundra, Yaris not recommended. Highlander V6, Land Cruiser, Sequoia not recommended because currently in testing. VW 1/10 Only Jetta 2.5 recommended. Eos, Rabbit, Tiguan, and Touareg not recommended because currently in testing.

Sorry for any spelling mistakes and exclusions.
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Old 22nd November 2007, 10:40   #3
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They do these things sometimes (I repeat only sometimes) for not so important parts like plastic/rubber/carpets/dash board insulators etc and some times asthetic parts (in extreme cases). But when it comes to functional parts, they will never compromise quality. This is my experience with Toyota. But they will empower the workers to come out with the greviences. They will discuss these things at the management meeting with workers once in month. How much action will be taken based on this outcome....no comments one this. As far as the lawsuit is concerned, I cannot comment on this.
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Old 22nd November 2007, 11:08   #4
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In late-October 2007, Automotive News brought a supplement on Toyota's 50 years in US.

One article was titled:


Extracts from this:

In 2006, Saying 'no' to sales crew was a historic first Toyota decides it's OK to delay a new-model deadline for the sake of ensuring quality

For Fujio Cho, explosive growth was a way of life. During his tenure as president of Toyota Motor Corp. from 1999 to 2005, Toyota's worldwide sales skyrocketed 54.7 percent, to 8.1 million vehicles. To cope, Toyota started building cars and trucks at four new assembly plants around the world and laid the groundwork for two more. "My biggest challenge as president was keeping up with the growth in sales," Cho said through an interpreter. He never questioned Toyota's bias toward growth, never considered trying to rein in the rapid expansion to reduce the strains it put on the organization. He followed a guiding principle that had been drilled into all Toyota managers. "I was taught that manufacturing can never say no to sales," said Cho, 70.

That growth strategy brought insidious side effects. The worst was a lessening of the superb quality that had underpinned Toyota's reputation for decades.

In 2006, therefore, President Katsuaki Watanabe tapped the brakes. He ruled that the engineers in manufacturing and product development indeed could say no to sales, if that's what it took to ensure quality.

Watanabe thus reversed a principle that had guided Toyota since its earliest years. It may have germinated during the WWII years. Soon after Kiichiro Toyoda built his first car, the Japanese military stepped in. Forget cars, the military ordered; we want trucks for the war effort. As Toyota's only customer, the government set production quotas, in effect telling manufacturing to keep up with orders.

The company never said no. At one point, to meet those objectives, Toyota built trucks with only one headlight.

After the war, Toyota set out to rebuild itself. But in December 1949, it foundered. It needed ¥20 million or it would fail. At today's exchange rates, not adjusted for inflation, that would be just $167,000. Then, it was a fortune for the struggling company. Toyota's problems lay in Japan's postwar inflation, a shortage of capital and its tendency to stockpile parts and build vehicles despite a lack of customers. The just-in-time inventory discipline of the Toyota Production System had not yet been put in place.

A rescue plan was devised of which the key part related to the balance of power between manufacturing and sales. The two sides of the company were split into Toyota Motor Co. and Toyota Motor Sales Co. And the sales side was given the upper hand. The banks explicitly insisted "that the number of automobiles Toyota produces not exceed the number the new sales company was confident of selling,".

Over the years, Toyota learned to coordinate the Toyota Production System and its retail operations in Japan. But the die had been cast. Sales was in charge. And who in sales was going to say, "Slow down"?

It wasn't until the 2000s that the problems became so severe as to lead Toyota to question its "never say no to sales" mentality. The strains were worst in the product-development departments.

"Up to a couple of years ago, everybody, including domestics and Europeans and Japanese, rushed to shorten the lead time" for developing new models, recalls Yoshio Ishizaka, 67. He was president of Toyota Motor Sales U.S.A. Inc. from 1996-99. After that he headed all overseas operations for the carmaker.

"However, the top management, including myself, found that after the line-off of a new product we had to rectify small errors, one after another. It is costly, and damaging to the image of the product," he says.

"Because we were in the midst of megacompetition, nobody wanted to say, 'Please ease up and extend the time.' A sales guy like myself never said that. But eventually our engineers said, 'If you give us some breathing time, then we'll make it better. So please, please think about how to do this.' "

The strains eventually became undeniable. While Toyota's sales continued to rise, its vaunted quality slipped. In 2006, Toyota executives were summoned to appear before government regulators in Tokyo. They had to explain why Toyota had decided, despite evidence of problems and two separate internal investigations, not to recall a part that was blamed for an injury-causing accident in southern Japan.

Newly installed President Watanabe shifted gears. He appointed a quality czar, reaffirmed quality as the company's top priority and authorized a change in Toyota's rapid product-development process. Now the deadlines for developing a new model take a back seat to ensuring that quality is not compromised.

"If we knew that quality would be much, much better" by giving engineers a bit of extra time to prepare a new model and the factory to build it, "then we'd have asked our sales organization to stay with the current model for a longer period, so that we'd have a better new model down the line," Ishizaka says.

It's a radical change in attitude. Not everyone is fully comfortable with it yet. Ironically, Cho, who rose through the manufacturing ranks, is less sure about the change than Ishizaka, a sales guy.

"Salespeople are at the forefront of our business, competing against others. Therefore I think that engineering, manufacturing and procurement must be able to fully back them up," Cho said.

Watanabe has made his decision. It could prevent other carmakers from taking advantage of a growing perception that Toyota quality is not what it used to be. And it has the potential to slow the pace of Toyota's breakneck growth.
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Old 22nd November 2007, 15:23   #5
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Isnt this the same plant which was jointly developed to teach GM a thing or two about building cars in an efficient way? Who is teaching whom now!
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Old 22nd November 2007, 15:41   #6
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Originally Posted by GTO View Post
Isnt this the same plant which was jointly developed to teach GM a thing or two about building cars in an efficient way? Who is teaching whom now!
As you would know, initially in the 1950s-1960s, all European and Japanese cars in the US were imports. Why they decided to set up plants in the US can be traced to the so-called `chicken-tax' proclamation signed by President Johnson in December 1963. The tax was aimed at VW, at the time the only automaker importing pickups into the US. The tax was a 25% tariff on imported pickups, and in retaliation to the trebling of taxes in Europe on chickens exported by US farmers.

For Toyota to avoid the chicken tax, it needed to source part of those trucks in US. That decision would mark Toyota's entry into manufacturing vehicles in North America. The initial solution was to import the cabs and their powertrains but to produce the truck beds domestically, with installation taking place at the ports where the trucks entered the country.

That sufficed for sometime. But the US economic recession in the late-1970s, plant closings, auto worker layoffs and public anger was forcing the Reagan administration to pressurise Japan to restrain vehicle exports to the US in the early 1980s.

As a result, Japanese manufacturing in the US commenced on a large scale in the 1980s. Honda started in 1980, and Nissan with a construction plan in 1981.

Originally Toyota hoped to enter US manufacturing with Ford. The reason was because in 1950, Eiji Toyoda had gone to Dearborn to see the Ford plant there. Toyota was about to embark on passenger-car production. Until then it had only built trucks in volume. He observed Ford's operations for three months, and Ford management helped him a great deal.

However, their talks fell through. Then GM Chairman Roger Smith quickly invited Toyota's senior executives to pursue their plans with GM. Smith had plans of spending billions in modernising its North American factories. He also knew that Toyota's cost advantages over GM and the rest of the Big 3 were due not simply to lower Japanese assembly labour costs. Linking up with Toyota would enable GM to learn what it was.

GM then made a big presentation to Toyota about creating a joint venture that would consist of not one but two auto plants, the GM plant in South Gate, near Los Angeles, and the one outside of Oakland, in Fremont. However, Toyota wanted something more modest to start off and started with the Fremont plant. GM had just closed the plant and fired the entire work force. This was perhaps GM's worst American plant with UAW, and high absenteeism on Mondays and Fridays, when local college kids had to be retained to fill in on short notice.

At this JV-NUMMI, Toyota relied on a mix of US suppliers that already were working with GM, imported parts shipped from Japan and a small number of local parts sourced specifically to supply the new Toyota-GM vehicle line.

Last edited by vasudeva : 22nd November 2007 at 15:45.
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Old 22nd November 2007, 15:51   #7
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Have you noted this: Cameron claims in the lawsuit that NUMMI managers became concerned that she might send copies of her reports to Toyota officials in Japan and tried to bar her from meetings and fire her.
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