Thames charts a new course

By Rod Oram

For decades, generations of workers at Toyota's plant in Thames honed their skills building cars. Now the 50 left working in the factory are honing very different skills - how to take cars apart.

When the removal of tariffs last year made car assembly uneconomic, Toyota switched from producing new cars to refurbishing used imports.

The two products are chalk and cheese. Assembly required standardised procedures for some 330 employees working on a cycle time of 30 minutes to produce 40 cars a day. Refurbishing is customised, requiring a lot of judgment by the staff of 50 as they partially disassemble, inspect and recondition each import.

Working to tight financial controls, they have to decide what action to take. For example, could a windscreen chip be polished out? Or should the glass be replaced? If it is replaced, will Toyota recover the cost when it auctions the car to dealers?

"We're still looking to achieve the same goal of quality, but we need different skills and we're working on a really wide range of vehicles," says Ron Edwards, one of the staff.

"This work is not so repetitious," says Garry Webber, who moved from Toyota's payroll to the AA's as an inspector making final independent reports on the refurbished cars. "You've got to be on the ball all the time."

The tight profit margins on used cars has squeezed pay. Overall, rates are about 10 per cent lower than for car assembly, although people who were once supervisors have taken bigger cuts.

Three base rates range from $10 to $14 an hour today with some tradesmen grades on top. There is no company-funded superannuation as there was in the old set-up.

"We had to start lean and hungry," says Chris Leavy, the plant manager. "My goal is to build up those rates" as the staff develop new systems and refurbishing becomes more profitable. The company is also trying to organise a staff-funded super scheme through a bank.

The changes have been a big wrench for the staff who had painstakingly built up their systems over many years. So expert were they in Japanese-style quality and just-in-time inventory programmes that they shared their experience with many others.

Over 10 years until the end of production last year, some 9500 people from around New Zealand came to the Thames plant for a one-day course in its systems, taking away lessons to apply in their own businesses.

"It was like starting all over again. I'm still coming to terms a bit with the changes," says Mr Leavy, who has been plant manager since 1985.

"I had the opportunity to walk away from it and take an overseas post with Toyota at Derby [in Britain], the US, Australia or a developing country like Pakistan. But at the end of the day I thought this was different. I thought it would be nice to recreate something in Thames."

Once the plant ceased assembly last October, the machinery was stripped out and one-third of the plant around the paint shop was laid out for refurbishing used cars and the preparation of new imports. The other two-thirds of the huge plant is an indoor car park for stock.

Refurbishing of imports began in February and output has climbed to about 16 cars a day (plus preparation of an average of 34 new ones). The staff are still developing new systems and new skills for the work, expertise they believe Toyota will be able to apply elsewhere in the world. "This is unique in Toyota worldwide," says Mr Leavy. "They're watching us as a bit of a model for other countries picking up on second-hand cars."

There's already a good flow of used Toyota imports into Ireland and from there into other European countries. From next year, Britain will allow direct used imports.

Toyota's decision to refurbish cars in New Zealand and sell the best of them under the Signature brand was obvious. "Basically we're following our customers," says Mr Leavy. Today the sales split in the total local car market is about 20 per cent new versus 80 per cent old, roughly the reverse of the ratio about 15 years ago.

* Last Saturday, Rod Oram wrote about efforts in Thames to establish new businesses following the downsizing of Toyota's plant.