Tough Moral Dilemma--Some believe that Toyota guarantees life time employment but that is not true. Toyota guarantees that letting go team members (as opposed to temporary workers whose role is to buffer ups and downs in the market to protect the jobs of team members) will be a last resort after exhausting all other options. Also, the Toyota Way philosophy is to positively impact society and communities and closing a plant is a very negative impact. In this case we have an obvious business case for plant closure in Australia. Number 1: The market is small, Number 2: The costs are very high, made higher by the strong dollar, Number 3: In Toyotas view the union is too militant and ready to strike and has forced concessions that make the plant even more expensive and less productive. Part of the agreement with NUMMI was few work rules, few job classifications, and management and the union work together on productivity to protect the jobs of team members. The UAW for the most part lived up to that agreement in California but costs in California were very high and when GM dropped out Toyota had to go it alone or close the plant and after a lot of internal angst decided to close the plant. Number 4: Ford is closing its operations and GM Holden, a larger operation, has pulled out, which means the supply base will whither without enough demand to justify operations there. Moral Dilemma: Do what is best for the community and take a big business hit or walk away? At least Toyota sees this as a moral dilemma and not simply a business choice in which case they already would have walked away in 2012.
Posted on: Sun, 26 Jan 2014 18:47:03 +0000
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