GEORGETOWN, Ky. -- Toyota's Georgetown car plant is the crown jewel of the company's North American operations. Big, efficient and honored for high quality, the Kentucky plant is the envy of many in the auto industry.
But four years ago, things looked a little dicey.
By Toyota Motor Corp.'s calculations, the Kentucky operation was uncompetitive. Its labor costs per vehicle were high compared with plants in Japan, and it was sinking behind other Toyota plants in the fastidious measurements the automaker prizes -- such as how many times it has to ask for support from the home office or how much effort it spends developing its people.
Georgetown's vehicle quality, although regularly among the industry's best, was also slipping as competitors such as General Motors improved their own quality. Between 1990 and 2001, Georgetown had won eight J.D. Power and Associates plant quality awards, presented each year to the industry's three top-performing plants. But in 2001, Georgetown's winning streak ended.
Early this decade, Georgetown's year-over-year productivity gains, as measured by industry monitor Harbour Consulting, flattened out -- an uncomfortable development for the Japanese company that coined the term kaizen: continuous improvement.
"It's hard to grow like Toyota has grown here and still keep all the numbers up," says the consulting company's president, Ron Harbour.
"We were falling behind," says Gary Convis, president of Toyota Motor Manufacturing Kentucky Inc., the business unit in charge of Georgetown. "It was important for us to be Toyota's plant of choice, and that wasn't necessarily the case."
Inside Toyota's expanding North American operations, its plants compete for projects. Toyota itself might compete against Nissan Motor Co. But internally, Georgetown also competes against Toyota's plants in Cambridge, Ontario; Princeton, Ind.; Fremont, Calif.; and, later this year, San Antonio.
"It's quite hard to sustain some of these things as you get up and get older," Convis admits.
But what ensued at Georgetown after Convis arrived in 2000 was not so much a turnaround as a spiritual reawakening. He is reluctant to claim final victory, but he does say the operation has bounced back. Recent events bear him out.
- Toyota gave Georgetown the project to build its first non-Japanese hybrid, which launches this month.
- Georgetown has taken over installations of convertible tops on Toyota's Solara coupe.
- A North American-wide training support office opened this year on site at Georgetown.
- Convis and his team have been handed responsibility for launching a new Camry with Fuji Heavy Industries Ltd. in Lafayette, Ind.
In June, J.D. Power awarded Georgetown its first plant quality award since 2001. Georgetown tied for third place with the Chrysler group's Windsor, Ontario, plant, which builds minivans and the Pacifica.
In Harbour's latest annual industry efficiency report card, released June 1, Georgetown's Camry line ranked as the industry's eighth most efficient. In 2002, the plant was not in the Top 10. Georgetown required an average of 18.08 hours per vehicle assembly in 2005, compared with 21.64 hours in 2002.
Harbour himself adds a caveat to his numbers: "Bear in mind that Georgetown was launching a new Avalon during that period," he says. "By comparison, what we typically see from a Big 3 plant during a major model change is a degradation of six or eight points in the data. I think this shows some of the effect that Gary Convis has been having in making Georgetown more efficient."