Section 3. Local Production Starts in North America
Item 4. Plant Operations Establish Local Roots
All possible efforts were put into ensuring quality in the operations of TMM (now TMMK) and TMMC. Both the Camry and Corolla vehicles produced at the two plants were also imported from Japan, and there were doubts about whether the local plants could continue operations if they did not achieve the same quality as the vehicles produced in Japan. TMM introduced a state-of-the-art flexible body line that can produce multiple vehicle series bodies on the same line in preparation for future developments and established the first overseas plastic molding plant with the expectation that it would achieve high productivity and quality.
One original TMM innovation was the adoption of a new plant layout suitable for sites outside Japan. The final processes of the welding, painting, and assembly were concentrated near each other. This allows each person responsible for quality to check the status of quality on the products themselves, and if a defect is detected, to immediately meet with other personnel to modify the defective process. This procedure, with some exceptions, later became a fundamental concept at plants outside Japan. In addition, a test course and an audit plant were created, just as is done in Japan, establishing a system for assessing quality locally.
TMC set as a fundamental principle when conducting overseas business activities creating employment opportunities and contributing to the development of local economies from a medium- to long-term perspective as a good corporate citizen. Establishing independent operations in the United States was significant from the perspective of establishing activities in accordance with this principle too. For example, Toyota conducted open local procurement of parts and materials, and as one part of this, TMM held the first suppliers conference in Kentucky in February 1987.
At that time, the criticism in the United States was that Japanese manufacturers conducted closed transactions within their corporate groups (keiretsu). It was under these circumstances that TMM held a conference with about 60 suppliers from around the United States and announced an open door policy of procurement from any supplier that could meet its quality, cost, on-time delivery rate, development capability and other conditions and sought the understanding of the suppliers. The participants reacted favorably to this policy, and Toyota's local procurement rates went on to become comparable to those of U.S. manufacturers. Toyota group companies and other Japanese suppliers also actively undertook the establishment of local operations in the United States, either independently or through joint ventures with local companies.
TMM completed its first Camry in May 1988. TMM adopted "Today's Quality Produces Tomorrow's Successes" as its plant slogan from among suggestions from employees, and entered full-scale production in October while resolving to maintain quality of the highest levels. In addition, TMMC produced its first Corolla in November of that year. TMMC's plant slogan was "Quality, Our Driving Force," and as the policy of emphasizing quality permeated throughout the workforces of both companies, the TMMC Corolla won the 1989 Best Vehicle Built in Canada award in February 1989 and went on to win it for three consecutive years until the award was discontinued.
Toyota now had three local production bases in North America including NUMMI. Production volume increased sharply from 70,000 vehicles in 1988 to 250,000 vehicles in 1989.