Toyota Boshoku Offers Lesson of Survival

Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – Darwinism works for companies as well as species.

But it’s not the strongest or most intelligent that survive, says Nate Furuta, CEO of Toyota Boshoku America Inc. It is those that best adapt to change.

The market has changed for the worse in North America, but Furuta’s company, the descendent of the automatic-loom company founded in 1918 by Sakiichi Toyoda, is building three new plants over the next three years in North America and adding 1,500 jobs as it expands its business as an interior and filter supplier.

The three Toyota Boshoku plants under construction are all associated with providing interiors to Toyota Motor Corp. assembly plants.

The new plant in Canada is near start of production for seats, carpets, trim and headliners, and a plant next to Toyota’s new plant under construction in Mississippi will make the same range of products. A plant in Indiana, not far from Toyota Motor Mfg. Indiana Inc., will produce mainly components for interiors, such as seat frames.

Toyota Boshoku (Boshoku means spinning and weaving) has been through many transitions over the years, disappearing for awhile when war demands melted its machines for the metal content and reappearing by the dedication of workers who rebuilt what was left.

Toyota Motor, founded in 1937 by Sakiichi’s son Kiichiro, saved the cloth-making company in the 1970s by assigning it some auto-parts production and in 2004 folded two other companies into Boshoku to turn it into a supplier of full interiors.

Furuta: Low-cost countries may not be as low cost as they appear.

Today, Toyota Boshoku has 50 local subsidiaries in 21 countries with 75,000 workers, including 7,000 in the U.S.

Furuta, speaking here at the Management Briefing Seminars, says he believes in the future of American manufacturing.

“Low-cost countries may not be as low cost as they appear,” he says. “I believe manufacturing can thrive here, because we are more flexible and can respond to the market more quickly.”

Because of shorter lead times being demanded, manufacturing continues to thrive in Japan even though it is close to China, where labor costs are 10% as much, he points out.

“For shorter lead times, (research and development), manufacturing and transportation of materials and products must simultaneously work together,” Furuta says. “I believe we can do it here at home,” because transportation costs from China are higher for the U.S. than for Japan.

Furuta, who was a key manufacturing executive for Toyota Motor in Japan, Europe and North America before taking the CEO job at Toyota Boshoku America, says the company’s history, philosophy and future “is based on solving problems.”

“I say, tell me the bad news first, because problems must be solved, and problems are opportunities,” he says. “Our goal is to develop our people so they can quickly identify and solve problems faster than our competitors.”

Furuta first came to the U.S. 25 years ago as part of the management team at the New United Motor Mfg. Inc. joint venture between Toyota and General Motors Corp. At NUMMI, he was responsible for melding a United Auto Workers union labor contract with the idea of kaizen, or continuous improvement, which is a key element of the Toyota Production System.

“The biggest challenge was lack of trust between two parties,” he says. “I spent many days studying the UAW contract, which had many pages and inflexible work rules.”

At one of the first meetings with the union, he says, the UAW leader sat across from him and said the Japanese were responsible for taking American jobs.

“I spent many days explaining how our system works, and we took people to Japan to see the system,” Furuta says. “Eventually, we developed mutual trust and respect.”

And kaizen, which requires flexibility, was written into the next contract:

“The parties are committed to constantly seek improvement in quality, efficiency and work environment through kaizen.”

Today, NUMMI is one of the few surviving OE JVs in North America, “because the workers continue to adapt to change,” Furuta says.

The three Toyota Boshuku plants under construction are all associated with providing interiors to Toyota assembly plants.

The new plant in Canada is near start of production for seats, carpets, trim and headliners, and a plant next to Toyota’s new plant under construction in Mississippi will make the same range of products. A plant in Indiana not far from Toyota Motor Mfg. Indiana Inc. will produce mainly components for interiors, such as seat frames.