Toyota Warns Ky. Plant to Cut Costs

Workers at Toyota Motor Corp.’s factory in Georgetown, Ky., have been warned step up their cost-cutting efforts to match the superior efficiency of factories in Japan.

In a video seen by Bloomberg News, plant manager Wil James tells employees Toyota makes more money on a Camry sedan built in Japan and shipped it to Kentucky than on the same model made in Georgetown.

James tells workers he’s not trying to scare them, but only to “heighten your awareness of the current risk we now have.” He also insists Toyota has no plans to close the Kentucky plant, and he says the company intends to invest in the facility for decades to come.

But the Camry plant at Tsutsumi in Japan has been implementing the company’s new flexible production system, dubbed the Toyota New Global Architecture. That process explains the model’s lower manufacturing costs in Japan. Toyota hasn’t indicated when it will apply the same system in the U.S.