Mazda's U.S. factory vibe switches from Ford to Toyota

TOKYO — Masashi Aihara, the manufacturing guru in charge of Mazda's second effort to build cars in America, has no regrets about the company bailing on its first assembly plant in Michigan.

Unlike the Flat Rock factory it once jointly operated with Ford, Mazda's new factory in Huntsville, Ala., not only has a powerful, more compatible partner in Toyota, its shop is union-free to boot.

Both are big bonuses in his book.

"Toyota is really considering how to improve productivity, quality and safety," said Aihara, president of Mazda Toyota Manufacturing U.S.A. , the 50-50 joint venture.

"That kind of philosophy is very common between Japanese companies," Aihara told Automotive News. "When we had business with Ford, we had a lot of differences."

Mazda's most advanced factory to date will bring the CX-50 crossover, a vehicle designed for American tastes, to the company's biggest, most important market with shorter lead times and — Mazda hopes — propel the brand to record U.S. sales of 450,000 vehicles in four years.

During Mazda's now defunct alliance with Ford Motor Co., Aihara worked in human relations at their jointly operated AutoAlliance International plant in Flat Rock, which Mazda exited in 2012.

Negotiations with the UAW there, Aihara recalls, were often thorny.

"I'm very happy that we can operate without the UAW," Aihara said of the new setup in Alabama.

Aihara, a 38-year Mazda veteran who also worked with Ford in China, oversees both the Mazda and Toyota sides of the factory.

This time, Mazda is dedicated to U.S. manufacturing for the long haul, he pledged.

"When we have the union, it's a kind of third party," Aihara said. "But we rather want to have a direct communication or direct contact between team members and the company."

Mazda has learned several labor management skills from Toyota Motor Corp., the world's biggest automaker and Mazda's second-biggest shareholder, with a 5.1 percent stake. Among them: how to listen to plant workers in a less confrontational way.

At Flat Rock, issues were handled through a labor relations office. But in Toyota's world — as practiced in Huntsville — the partners meet with workers through a "team member relationship" department. Part of the process is soliciting feedback about any worker gripes or concerns on a daily basis.

"We can improve our operation quickly and respond to our team members' requests quickly," said Aihara, who is fluent in English. "We want to foster that kind of culture."

The Alabama venture has capacity to build 300,000 vehicles — half for Toyota, half for Mazda. Mazda's new CX-50 compact crossover entered production in January. Toyota began making its Corolla Cross subcompact crossover there last fall.

Right now, the lines are separated by brand. But instead of calling them simply the Mazda and Toyota lines, the partners call the line making the CX-50 the Discovery Line and the one making the Corolla Cross the Apollo Line. The nomenclature was chosen with an eye to possibly mixing production in the future but also as a nod to Huntsville's nearby NASA space flight center.

The vehicles share only minimal parts. Commonized production areas are "very limited," Aihara says. They cover mainly stamping, painting, steel sourcing and quality inspection.

Vehicles feed through the same paint shop but on parallel lines.

A stable of on-site suppliers mostly makes different parts for each brand, conveying them to the main plant on breezeways.

Toyota sources the Corolla Cross' engine from an existing plant in Huntsville. Mazda gets the CX-50's four-cylinder engines — a naturally aspirated 2.5-liter and turbocharged 2.5-liter — from Mexico and Japan.

Eventually, it will add a hybrid variant using a gasoline-electric setup from Toyota, though Aihara said it will differ from that used in the Corolla Cross hybrid.

The CX-50's six-speed automatic transmission is also shipped from Japan.

The CX-50 will be sold mainly in the U.S. and Canada, with about 90 percent staying stateside.

"Mazda wants to expand its U.S. business in terms of distribution and manufacturing at the same time," Aihara said. "Our U.S. dealers are very excited because now they are confident that Mazda is really investing to the United States. That's why they are investing in their dealerships."

The $2.3 billion plant is expected to achieve full capacity later in the year, after the partners finish hiring and training enough workers to flesh out a second shift, Aihara said. That would bring its payroll to around 4,000 people. Some workers were poached from Honda and Nissan plants in the region, but many don't have any automotive, or even manufacturing, experience. Some were hired from supermarkets, Aihara said.

The hiring process used techniques from the Toyota playbook, including having applicants work on an actual car. Those who pass enter a two-month training period before being cleared for prime time. The training is longer than usual for Mazda but in line with Toyota's practice.

Despite the meshing of corporate cultures, there are still some growing pains for Mazda.

A big one is simply the size of the plant's output and the amount of investment. For Toyota, which sells more than eight times as many cars as Mazda globally and expects 34 times as much operating profit this fiscal year, the numbers involved in Alabama aren't that big a deal.

But in the plant's 50-50 cost-sharing arrangement, Mazda sees things differently.

"The sizes of the companies are totally different," Aihara said. "For expenses, we think the amounts are big. But the Toyota people don't. Maybe that's the biggest difference."