Erlanger office, Toyota's earlier consolidation effort, will be closed

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NASHVILLE -- In relocating its U.S. headquarters to suburban Dallas, Toyota is basically abandoning an earlier strategy to consolidate its North American manufacturing management in a single office in Erlanger, Ky.

That office on the outskirts of Cincinnati has served as the central office for engineering, production planning, purchasing, tooling and factory planning since the 1990s.

Toyota plans to close Erlanger and disperse its approximately 1,600 employees to locations in Michigan and Texas and Toyota’s flagship U.S. auto plant in Georgetown, Ky.

When Toyota opened the Erlanger office in 1996, the automaker was expanding across the continent and rapidly attempting to increase the volume of North American parts and services for its plants.

Erlanger’s address is in Kentucky, but it is just outside Cincinnati, and many of the operation’s executives and staffers have lived in Cincinnati for the past two decades.

Erlanger was in some ways an earlier attempt to do what Toyota now wants to do in Texas -- bring its North American management and support personnel together under a single roof where they can communicate more freely.

“We have several different corporate cultures around the country, and we think that prevents us from being as effective as we could be,” says North American spokesman Mike Goss. “But we have told all of our team members that we want them to move with us. We’ve been developing people in Erlanger for a long time.”

But Toyota also wants to put some of its Erlanger team closer to where they are needed for manufacturing purposes.

As a result, Erlanger’s 250 purchasing employees will move to the expanding Toyota Technical Center in Ann Arbor, Mich.

“That makes sense to us, seeing that we already have our chief engineers there in Michigan, and the supplier industry is there,” Goss says.

About 300 production engineering employees from Erlanger will be moved to Georgetown, where Toyota will construct an office building. From there, the team will oversee production engineering projects for all Toyota plants.

Separately, Georgetown is hiring about 750 employees to introduce production of a Lexus vehicle there.

The remaining 1,000 or so Erlanger employees will relocate to Toyota’s future consolidated site in Plano, Texas. Their jobs including accounting, finance, administration and human resources.

Erlanger’s phaseout will occur over the next two and a half years.

You can reach Lindsay Chappell at lchappell@crain.com.


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