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Old 02-12-2007, 02:30 AM
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Arrow Report: Toyota works to trim labor costs in North America


'The Lives of Others'

DETROIT Toyota Motor Corp. is working to restrain labor costs at its North American manufacturing operations, which are expected to rise by $900 million in the coming years, according to a confidential company report obtained by the Detroit Free Press. The newspaper published details last week from a copy of the 42-page report, which was left unsecured on computers at the Japanese automaker's Georgetown, Ky., plant and passed around by hourly employees. The report from Seiichi Sudo, president of Toyota Engineering & Manufacturing in North America, says Toyota's North American manufacturing labor costs continue to increase at a faster rate than its profit margin. "This condition is not sustainable in the long term," he said in the report. By fiscal 2011, the report says the labor costs are expected to rise by $900 million because of increases in its work force, as well as rising wages and benefits. It says human resources officials are working to trim that increase by $300 million. Following a speech Thursday at the Economic Club of Chicago, Jim Press, president of Toyota Motor North America, told reporters that the report was a planning discussion and doesn't reflect an official company plan. Some of the information in the report was speculative, he said. "It's more about making sure the labor component as a percent of the value of the car becomes more in line where we need to go so we can have high-value cars in the future and continue to be efficient and profitable," Press said. The company has acknowledged that the documents supplied to the Free Press were authentic. The presentation apparently was left on a shared computer drive and later printed, Toyota spokesman Daniel Sieger said. Sieger declined to release a copy to The Associated Press, but said in a statement the essence of the five-year planning document was that Toyota will continue to focus on enhancing productivity, quality and safety. "There are no plans whatsoever to reduce wages," Sieger said. "Toyota's manufacturing wages are not only very competitive, but are among the highest in the industry." The report said Toyota should strive to align hourly wages more closely with prevailing manufacturing pay in the state where each plant is located "and not tie ourselves so closely to the U.S. auto industry, or other competitors."

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