For perspective on how far Toyota Motor Corp. has come as a customer for North America-made auto parts and production materials, Chris Nielsen recalls one of his first days on the job.
It was the summer of 1987, and Nielsen had graduated recently from GMI Engineering & Management Institute in Flint, Mich., and taken one of five jobs in Toyota's new U.S. purchasing office. Toyota had opened the office in a Detroit suburb to begin setting the stage to supply the automaker's plant in Georgetown, Ky., which would start building cars the next year.
Days after accepting his job with Toyota, Nielsen and his small band of colleagues were relocated to Lexington, Ky., to begin their work.
"We knew we needed to begin buying things," says Nielsen, 44, who recently became Toyota's first American vice president for North American purchasing. "So I sat at a table with a sheet of paper and a ruler and drew what looked like a purchase order. When the other people in the office approved it, I drove down the street to a copy place and ran off a stack of them to be Toyota's purchase orders.
"I had to use my personal credit card to pay for the print job."
This year, Toyota's Kentucky-based manufacturing and purchasing operations will buy $30 billion worth of parts and materials from nearly 500 North American suppliers. Ohio-made steel, air conditioners made in Tennessee, wheels made in British Columbia and engine valves made in Illinois will come together in seven assembly plants to turn out 1.5 million cars and trucks.
The 20-year evolution illustrates how much Toyota has come to rely on North American component sourcing. The real drama of the history is that, prior to 1988, Toyota was a company with scarcely any experience outside of Japan, with virtually no global reach in its supply chain, dependent on suppliers that, for the most part, had never ventured out of Japan.
"This was all new to us," Nielsen says. "Toyota didn't know these suppliers, and these suppliers didn't know us.
"Some of our younger associates here today look at me in disbelief when I tell them that, back in the beginning, American parts suppliers weren't so sure they wanted to do business with Toyota. I spent a lot of my time in those early years — and I mean a lot of it — trying to convince U.S. companies that it would be OK to sell us parts."