The constant gardener
Toyota has worked to cultivate a down-home American image
"You have to pull weeds because they steal water and food from the other plants," the tiny fourth-grader explains to a visitor. "The plants need to be healthy in the fall so they can come back next year."
Fabiola "doesn't know too much" about Toyota, she admits, but the pretty youngster and her garden labors offer a fetching example of how far the world's biggest automaker is extending its reach these days in an attempt to cultivate a more American identity.
From helping school kids learn the life cycle of gardens to racing Camrys in NASCAR's Nextel series to building plants and creating thousands of jobs, the Japanese automaker is taking on an ever more visible, and important, role in America.
"We are becoming part of the fabric of America, and you don't go backward from that," says Jim Lentz, 52-year-old executive vice president of Toyota Motor Sales U.S.A.
In Detroit, Fabiola and 900 K-5 students spent the summer studying life sciences and horticulture, thanks to a $250,000 grant from the Toyota USA Foundation to The Greening of Detroit, a beautification group.
At Neinas Elementary on the city's southwest side, students and teachers used Toyota's funding to upgrade the school's science garden, a 140-by-50-foot swath of colors reclaimed several years ago from a parking lot for truck trailers. Among the students' projects this year: a first-time planting of two lunchtime staples, Arachis hypogaea and Fragaria.
'THE SANDWICH GARDEN'
"That's peanuts and strawberries; we call it the sandwich garden," explains Sue Erhardt, Greening of Detroit's education director. "Now the kids can walk out here at lunch and see the origins of their peanut butter and jelly sandwich."
Jim Farley, 45, who was group marketing vice president of Toyota Motor Sales U.S.A. until he left recently for Ford Motor Co., said Americans will come to see the company more as a neighbor than a foreign automaker through its backing of such local projects and events.
-"Americans will realize that Toyota is extremely localized here," said Farley. "They'll know that it's a lot more than us signing a check. We're going to do high school football, horse racing, lumberjack competitions — and we're going to do it over a long period of time, so that we are recognized as a community-based company."
Toyota has piled up an ever-increasing economic stake in North America, which it puts at about $16.7 billion and 13 vehicle, engine and parts plants employing more than 37,000 workers. Toyota says its jobs impact widens to several hundred thousand when payrolls at its suppliers are included.
The company is expected to build 1.6 million vehicles in North America this year, but capacity will rise to 2.2 million in 2010 with the opening of assembly plants in Mississippi and Ontario. More plants, undoubtedly, are on the way.
Toyota is not shy about promoting its economic clout. In one national TV commercial, viewers are taken on a road-level tour of the United States while a voice-over comments on the social and economic contributions of an unnamed automaker; Toyota is identified only at the end.
The message also is carried in magazine and newspaper ads and was posted on billboards this year at Metro stations in Washington for the benefit of commuting Capitol Hill aides and media types.
"We protect our brand by explaining what we do and how we are part of the fabric of the country," says Dave Illingworth, 64, senior vice president and chief planning and administrative officer for Toyota Motor Sales. "But you can't fool the American public. You can't say you are American unless you expand the plants and expand the footprint.
"If we weren't doing it, people wouldn't believe it, and it would actually backfire."
Toyota began promoting its contributions to the U.S. economy in the early 1990s after a wave of Japan-bashing in the previous decade had led to "voluntary" restraints on exports and the threat of 100 percent tariffs on Japanese luxury vehicles. That meant Lexus, of course.
"That really scared us," Illingworth recalls. "We realized we cannot let this happen. We have to let people understand how many plants we have, how much money we've invested in the country."
But Toyota has amped up both the volume and the red-white-and-blue tenor of the campaign in the past couple of years to coincide with the launch of its first full-sized pickup, the Tundra.
The Tundra is aimed squarely at the last bastion of the Detroit 3, a segment marked by blue-collar demographics, red-state addresses and fierce loyalty to U.S. brands that can span generations. For the year to date, the 19 middle-of-the-country states that make up the truck-heavy heartland have generated just 28 percent of all Toyota-brand sales in the United States. That percentage would be lower still except for strong sales in the Chicago region, where Toyota is No. 1 in passenger cars.
To crash its way over the ramparts, Toyota is spending at least $100 million to market and promote the good-ol'-boy credentials of the Tundra, which is built at a new $1.2 billion plant in San Antonio.
Trying to out-Ford Ford, which builds the segment-leading F-150, Tundra's TV commercials are built around rugged-men-at-work visuals and Texas-drawl voice-overs, with clear mention of where the truck is built. The message: Driving a Toyota truck and being a true-blue American are not mutually exclusive.
At the same time, Toyota is building brand awareness across the rural heartland with tie-in sponsorships of livestock shows, bass-fishing tournaments and test-drive offers at sports shops and lumber stores. Also playing to that audience, the automaker sponsored the 2007 tour of country music superstars Brooks & Dunn and will link it to the Pentagon's support program for deployed troops and their families, "America Supports You."
Toyota also made its NASCAR debut this year, showing it knows where to find pickup owners (see story, Page 165).
The automaker has stepped up its philanthropy as well. Late last year, the company said it would increase its charitable spending in the United States this fiscal year by 20 percent to "more than $40 million." That would put Toyota closer to the $61 million spent by General Motors in 2005, the most recent figure available.
That charitable giving is separate from funding by the Toyota USA Foundation. The foundation, which is endowed for about $41 million, awards about $2 million a year to K-12 science and math programs around the country.
Good works and citizenship are the expected norm for any major corporation, of course. But Toyota thinks the pressure is a couple of notches higher in its case. Having passed GM to become the world's biggest automaker and on pace to pass Ford as No. 2 in the United States, Toyota knows it must keep looking over its shoulder for any potential backlash to its relentless growth.
"The degree of tension is lower, but there's always a chance of protectionism re-emerging," says Toshiaki Taguchi, 66, who was CEO of Toyota Motor North America Inc. from 2000 to 2004.
"That's why we try to be a good corporate citizen in America. GM, Ford and Chrysler — their contribution to American society, cumulative, is much, much greater than what we have done. We want to do more."
Like Taguchi, many Toyota executives are leery that the fall of GM or the outright collapse of Ford or Chrysler could trigger seismic consequences for Toyota. The automaker sells more cars here than in Japan and counts on America for two-thirds of its global profits.
The risk seems likely to increase the closer Toyota comes to overtaking GM as sales leader in the United States, something no longer inconceivable. At the end of September, Toyota, including Lexus and Scion, trailed GM by 7.6 points of market share, or about 932,400 units.
The two are on radically different trajectories. Toyota's sales and market share continue to climb this year, while GM is slipping. And if Toyota's U.S. sales continue to increase at their 10-year average rate of 8.6 percent a year, they will hit 3.9 million units in 2010. GM sold 4,065,341 cars and trucks in the United States last year and likely will slip under 4 million this year.
But Jim Press, 61, who until his recent departure for Chrysler was president of Toyota Motor North America, said any crisis over a change in U.S. sales leadership will be averted because Toyota's growth has become self-limiting. Having filled in every product segment, Press said, the pace of Toyota's future growth will slow naturally.
"We've had a period of unprecedented growth, but part of our growth came from (bad) decisions made by our competitors," said Press, the first American named to the parent company's board of directors in Japan. "That's going to end. I can't foresee a time when we would be number one in America unless something happened to our competitors that you wouldn't be able to understand or anticipate."
Meanwhile, at the garden on McMillan Street in Detroit, Fabiola and the dozen or so kids still left in the waning afternoon are gathering up tools and preparing to leave for the day, and the rest of the summer. Toyota's one-year grant has expired, and the summer program is done. In the new school year, the garden becomes part of the general curriculum.
"It's our goal to show kids that nature is not something that you have to drive a long way to get to, and that they can find it as close as their schoolyard," said Rebecca Salminen Witt, Greening of Detroit's president. "Toyota helped us do that for a year."