Toyota likely to boost hiring, manufacturing in North America
Top US sales exec says increases may result from hedge against strong yen.
Traverse City, Mich. — Toyota’s top U.S. sales executive predicts that his company will continue to add jobs and build more models in North America as a hedge against a strong yen.
Jim Lentz, president and CEO of Toyota Motor Sales U.S.A., said Toyota already makes around 70 per cent of the models sold in North America in the region. He sees that percentage continuing to grow.
“With the yen where it is today, I think it’s only a matter of time, Lentz told reporters Wednesday at an auto industry conference outside of Traverse City, Mich.
Toyota Motor Corp. has been hammered by the strong yen, putting extra pressure on the automaker to stay lean and come up with new innovations. A strong yen cuts into overseas earnings for all Japanese automakers, and makes it harder to offer products at cheaper prices abroad.
It takes just 78 yen to buy a dollar, fewer than the 100 yen it took in 2009. It’s a sign of the currency’s growing strength against the greenback, and a tough trend for Japanese manufacturers.
So in the past eight months, the world’s top automaker has announced it would hire 3,500 workers in North America and invest $1.6 billion its factories here.
“The hedge against currency is to build cars where you sell them, he said.
Lentz said further investment depends on the value of the yen, sales and the ability of Toyota to engineer and design vehicles in the U.S.
Toyota already builds 12 Toyota and Lexus models in North America, including the top-selling Camry and popular Corolla. Its new Avalon large sedan was engineered and designed near Ann Arbor, Mich., and the company expects more models to be designed in the U.S., where it employs about 30,000 people.
Last month, the company’s Canadian manufacturing arm said it would invest $100 million in its Cambridge, Ont., plant in a move that will see it hire 400 workers.
The investment will increase the production of the company’s Lexus RX models,from 30,000 vehicles to 104,000 at the southwestern Ontario facility.
Toyota Motor Manufacturing Canada Inc. says the investment includes 15,000 RX450h vehicles, the hybrid electric version of the popular Lexus, and will take its annual production capacity in Canada to 500,000 units.
The Cambridge expansion follows an $80-million investment Toyota made in March at its Woodstock, Ont., assembly plant, which also created 400 jobs.
The Cambridge and Woodstock investments will bring Toyota’s Canadian workforce to some 7,300 at two plants in Cambridge and one in Woodstock, which make the Toyota Corolla, Toyota Matrix, Toyota RAV4 and the Lexus RX350 vehicles.
Ontario has seen traditional Detroit Three carmakers — GM, Ford and Chrysler — cut tens of thousands of jobs in the last decade as their parent companies restructured in the United States. But Toyota and Honda have expanded their operations in Ontario, Canada’s manufacturing heartland
Meanwhile, Lentz said the company doesn’t have firm plans to shift production of more models from Japan to North America. But one model Toyota would consider building here is the Lexus ES series.
Toyota, like other manufacturers, would also make changes to squeeze more production out of existing plants rather than building new buildings, he said. A new plant costs about $1 billion, Lentz said.
Toyota still thinks automakers can sell 14.3 million vehicles in U.S. this year, he said, even though sales have slowed the past two months, and some analysts have cut their forecasts. But Lentz said pent-up demand should prop up sales. The average vehicle in the U.S. is nearly 11 years old and people have to replace their aging rides.
Toyota, he said, has fully recovered from the March 2011 earthquake and tsunami that hobbled its Japanese factories and caused model shortages worldwide. In the U.S., the company’s dealer inventory dropped to around 120,000 vehicles last summer. Now it’s back to 299,000, which is near the 300,000 that Toyota considers optimal.
— With files from The Canadian Press
© 2012 The Canadian Press