Lexington, Ky. - Toyota Motors celebrated its 25th year in Kentucky with a Saturday brunch bash at Keeneland featuring its onetime leader who now heads the entire corporation.
Fujio Cho was among the employees, executives and area community leaders on hand to mark the occasion in the spring of 1986 when ground was broken in Scott County on what would become Toyota's largest manufacturing facility outside of Japan. The $5.4 billion investment directly created nearly 7,000 jobs at Toyota plus an additional 9,600 jobs in a regional supply chain that supports production in Georgetown.
The anniversary event was delayed due to the earthquake and tsunami that struck Japan earlier this year.
Presentations included the awarding of grants of $25,000 each to Georgetown College, the Louisville Urban League, the Urban League of Lexington/Fayette County and the Governor School for the Arts, and a brand new 2012 Camry to Bluegrass Pride.
Business Lexington
Lexington Herald-Leader
Georgetown News-Graphic
Reporters from , the and the sat down following the event with Cho, who served as the Georgetown plant's president from late 1988 through the fall of 1994 and went on to become chairman of Toyota Motor Corp. The following is excerpted from the conversation which was conducted via an interpreter.
Tom Martin - Business Lexington (TM): Toyota is planning a record output in 2012 and projecting an 8 percent boost in sales. Given economic conditions, what is the basis for this optimism?
Fujio Cho (FC):There are two things. First of all, for the past two of three years Toyota has lost substantial market share. We went through some difficult years. But, recently we started to see improvement of our brand image. And after going through a series of disasters, for example we went through a huge earthquake and then the flooding in Thailand and those things disrupted our production activities and therefore we were not able to produce at the level we wanted to produce. However now, we feel that all of those issues are behind us and we are ready to dash for the target. That's one of the reasons why we set rather ambitious goals. A second element is rather hard to explain clearly, but whenever we set some sales target we try to be aggressive. We try to set a higher target level than normal forecast. ... We always set higher than the normal target levels so that everybody will work harder to producer more cars or to sell more cars so we can reach higher target.
Mike Scogin (MS) - Georgetown News-Graphic: You mentioned that Toyota went through a couple of rough years. What has Toyota learned through all of these travails?
FC :I believe the lesson we learned, we learned 25-years ago. However, for the past ten years we were able to sell so many Toyota cars on a global basis and we had to do so many things - all of a sudden things got so busy. Some of the things that you have to be meticulously careful to nail down, important points, we were not able to pay enough attention to because of sudden busy schedule.
Those issues came up in different areas of our business. We have identified some of the specific areas that we need to change. For example, we need to delegate decision making to local management much more than we do now, on a worldwide basis. For example, designing a car. The new Avalon I believe will be completely designed in the United States. And in the area of quality-control, we are enhancing functions in the United States in that critical area.
And we are enhancing our advisory board function. We have advisors in a board for Toyota who used to be top officials in government or in the economic decision field or in businesses and those top advisors who experienced top positions in each field get together and provide advice to Toyota.
All of these things we were planning to do and we did know that those were things that we needed to do, but because we became extremely busy we were not able to continue the activities or even if we created some function, it didn't work as well as we intended.
So, we are going back to the basics and try to strengthen the basics and do it more steadfastly.
So, from that viewpoint, this Kentucky plant is doing a tremendous job because in terms of the organization, we have a very small number of Japanese employees and the plant is managed by mostly American managers. So this plant, I think is in good shape.
Within Toyota Motors North America, I believe TMNA (Toyota Motors North America) or TEMA, the engineering arm of Toyota or TMS, the sales part - those are the areas that we may have to review to make sure the appropriate things are being done.
And TMC in Japan, Toyota Motor Corporation, now we have a younger generation president, Akio Toyoda and he has been aggressively promoting and implementing all of these things already.
Scott Slone - Lexington Herald-Leader: Steve St. Angelo (Chairman, Toyota Motor Manufacturing Kentucky) has talked in the past about the fierce competition between plants to build different models. He talked about how crucial it was for the plant to begin building the Venza. What do you see as the role of the plant, going forward with that competition between plants?
FC: The decision-making process concerning which plants should make which models is not based solely on the performance of each plant. So, the best plants do not necessarily get to make the most popular models. There are some other factors that have to be considered. For example, job creation, the employment situation and also what would be the best way to maintain a stable production schedule. One thing about this Kentucky plant, this plant has experience. It's more like a "big brother" for other plants, so this plant will be able to handle relatively easy producing a new model.
TM: Ten states and the District of Columbia have pledged to form a regional network of charging stations to enable the growth of the electric vehicle. What is the future of the electric vehicle?
FC: I'm sure you know some of the shortcomings of current electric vehicles. For example, the cruising range is very limited, the recharging time is too long and therefore you cannot drive long distances. Those are the limitations. But in the future, I believe, electric vehicles category will be extremely important and electric vehicles will establish themselves as very useful, important cars. We are trying to introduce our own electric vehicles very soon. But before we introduce pure electric vehicles we plan to introduce plug-in hybrid vehicles next year. For the plug-in hybrid of course you use electricity but when electricity runs out you automatically switch into hybrid mode so I feel it is more fitting to realistic conditions at this moment.
So, in this car industry we have many future options. Whether the car of the future will be fuel cell vehicles or electric vehicles or hybrid, it's very difficult to foresee. At this moment, nobody knows what will be that car of the future.
Three days ago I was in Las Vegas so let me use a gambling analogy: if you know the most certain winner and you can predict the winner very clearly then you can bet almost all of your money on that guy. But since we don't know in this auto world which one will become the winner we have to place our bets several different things. You cannot put all of the eggs in one basket because it's too risky.
MS: Take us back to the first time you stepped on Kentucky soil, and now - how do you feel, looking back to that day and today?
FC: It's hard to single out. One thing in my mind is people in Kentucky. There are so many people in Kentucky who are very helpful, who accepted us readily, who gave us very precious advice and who worked with us very hard. All those people are still around me so when I came back here after 25-years, my memory goes back to 25-years ago.
Another thing - I'm saying this in a very positive sense - things didn't change too much. You look at the town or the streets or the sceneries, whatever, they look the same as 25-years ago.
Because I live in Japan now and I live in the prefecture called Aichi prefecture, however because of my job I frequently travel in different parts of Japan ... but there is nowhere that I can see the sun rising or the sun going down on the horizon. You don't see any horizon in Japan. So I have been seeing that for ten years and whenever I came back here I really feel that Kentucky is my second home - my wife says the same thing. So every morning before the sun starts to rise we are standing by the hotel window enjoying watching the sun coming up over the horizon.