Toyota and UAW make strange bedfellows

Toyota's workforce in the USA is not unionised. The workers at America's traditional 'Big Three' car makers ARE unionised -- and enjoy industry-leading health benefits.

You could be forgiven for thinking the interests of Toyota and the Big Three's employees (members of the Union of Auto Workers; UAW) would not overlap, but both parties share this much; they're being pilloried for the state of the American motor industry.

Some blame Toyota -- and Honda too -- for building cars that outgunned offerings from GM, Ford and Chrysler, but in a free market like America, that is acceptable. Left without a rational argument, supporters of the Big Three have claimed that Toyota underpays staff and saves on salaries.

On the other side of the fence, the UAW workers are being ridiculously overpaid, these critics claim.

In fact, neither is true, says Mike Michels, Toyota's American VP of Communications. Michels cites a typical wage of $29 per hour paid by the Big Three to UAW workers in the northern state of Michigan. An equivalent role with Toyota pays $30 per hour. Far from UAW workers being overpaid or Toyota being a scrooge with its salaried employees, the reverse is true.

Michels does admit that there is a wrinkle in the relationship between the Big Three and the UAW, whose older members have been promised the sort of health benefits that some will claim are driving the car companies to the wall.

"We don't have the legacy costs," Michels says on that point, but the UAW has shown a willingness to make concessions to the health benefits -- those very benefits that the car companies themselves offered the UAW in the first place.

Toyota's situation in the US is not unlike the company's Altona plant in Australia. Rather than building plants in the traditional car-building municipality of Detroit, Michigan, the Japanese 'transplants' are often established as greenfield sites in (occasionally depressed) areas that can draw on a highly skilled workforce.

Michels denies the stereotype that Toyota builds plants in rural areas where the work ethic is high and so is the unemployment rate, with workers joining the company from farms that have gone bust.

While the company's Kentucky plant is rural, the plant in Indiana is located in an urban area and the workforce on hand is very skilled. The Mississippi plant is located in an area of high unemployment, but workers there tend to come from the depressed furniture-making industry and are quite skilled in manufacturing.

The truck-making plant that builds the Tundra pick-up at San Antonio in Texas is located in an area of high unemployment, but that's a different case, according to Michels.

"We're placing [that] plant near the customer," he says. Texas is a large-scale consumer of pick-ups such as the Tundra.

With the occasional exception, like the San Francisco plant, Toyota's facilities in the US are located inland. Michels offers two reasons for that pattern. Just as Victoria does here, a state will offer Toyota incentives to site a plant there, to reduce unemployment and attract further investment, but Toyota has found too that the cost of running an operation in a coastal area can be prohibitive.