Toyota City: How it became Japan's Detroit

Thanks that was a great read. Glad to see the Prius leading the charge!

 

I never stopped to think Toyota et al might be more important to Japan's economy than the D3 were reported to be (wildly overblown IMO) relative to the US economy. Interesting read, thanks.

 

Things are really the worst the closer you are to Toyota. Or better, actually, depending on what industry you`re in...

Tokyo, to be honest, isn`t going to hurt much should Toyota continue to have trouble. It`s the prefectures (read that as "states" if you`re not familiar with the term) close to Toyota that really take the hit. I don`t know how factories are operated in the US, so I don`t know if it`s the same... But in Japan only the final step is really taken in the actual Toyota factory. Different parts come from smaller specialized affiliates. A certain piece may come from a family factory that has been making screws or the like for 150 years - another bit may be some old man with 5 employees working out of an old warehouse. All these smaller parts are made on demand without any huge stock kept. Some of these smaller workshops really only are 2 or 3 people with a hand tuned machine making parts. They`re not "Toyota" but they produce that specific part only for Toyota. I would say that most of the parts are produced like this.

So when demand went down, it wasn`t so much the factory workers that hurt (most of the full timers are on salary) - but the HUGE number of smaller workshops that really felt the pain. They`re usually paid by perfect unit, not contract. Less demand, fewer parts out, less money in.

With what I know of how Toyota deals with the overseas market, problems there can really really hurt for cars assembled in Japan. The policy for domestic sales is totally on-demand - a customer orders a car, the factory assembles it and then orders parts to keep the small stock full. Little risk of having "leftovers".
But with the overseas market, it appears they pretty much guess how many cars will be needed - make them all in one go - then ship so many of them off hoping they sell. This time, they didn`t. That is what hurt the most. And the excess produced can`t be sold in Japan, so there are cars just sitting there with nowhere to go.

That article gave me a bit of a laugh with this line; "A tidy city where nearly every business – even those that have nothing to do with the automobile industry – has the word “Toyota†in its name, "
When the city is called "Toyota" , I don`t think it`s strange or even interesting for businesses to have that in the name. Pretty darn normal in Japan - go to another city and that city`s name will show up all over the place too!