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07/25/2005 Entry: "Toyota of Ontario"

"But last month Toyota decided to put the new plant, which will produce RAV4 mini-S.U.V.'s, in Ontario. Explaining why it passed up financial incentives to choose a U.S. location, the company cited the quality of Ontario's work force.

"What made Toyota so sensitive to labor quality issues? Maybe we should discount remarks from the president of the Toronto-based Automotive Parts Manufacturers' Association, who claimed that the educational level in the Southern United States was so low that trainers for Japanese plants in Alabama had to use "pictorials" to teach some illiterate workers how to use high-tech equipment.

"But there are other reports, some coming from state officials, that confirm his basic point: Japanese auto companies opening plants in the Southern U.S. have been unfavorably surprised by the work force's poor level of training.

"There's some bitter irony here for Alabama's governor. Just two years ago voters overwhelmingly rejected his plea for an increase in the state's rock-bottom taxes on the affluent, so that he could afford to improve the state's low-quality education system. Opponents of the tax hike convinced voters that it would cost the state jobs."

Now we know the opposite is as true as it ever was.

"But education is only one reason Toyota chose Ontario. Canada's other big selling point is its national health insurance system, which saves auto manufacturers large sums in benefit payments compared with their costs in the United States."


"For now, let me just point out that treating people decently is sometimes a competitive advantage. In America, basic health insurance is a privilege; in Canada, it's a right. And in the auto industry, at least, the good jobs are heading north."
Toyota, Moving Northward, by Paul Krugman, NYT Op/Ed, July 25, 2005

What is it again that's costing U.S. jobs?

"Now, even with the economy far from a recession, the cost of these promises is becoming a drag. On Tuesday, the size of the drag became more apparent for General Motors, which said it would eliminate 25,000 jobs by 2008 - in part because of the cost of its healthcare commitments, now amounting to about $1,500 per car."
Rising benefits burden. GM has announced 25,000 layoffs, but other industries face similar cost burdens, by Ron Scherer, The Christian Science Monitor, July 9, 2005

It's still time for national health insurance for everyone. It's been high time for national health insurance for everyone for the past 25 years. It might even be more than time for national health insurance for everyone. How bad does it have to get to get national health insurance for everyone? Wake up, Am-mer-ri-ca!

Replies: 3 comments

Hey, my Corolla was built at the plant they already had in Ontario.

Keep in mind, health care is only part of the equation. I think the wages there are generally lower, adjusted for the exchange rate. Also, the current Ontario plant is non-union and has consistently rejected attempts by the CAW (an independant cousin of the UAW) to join their ranks. Toyota offers them competitive wages and benefits to keep them from joining. Also, the Ontario plant is consistent leader in productivity so, lined up with low health costs, Ontario seems a logical choice for a North American location.

But to your point, yeah, you really need to get on the public health care bandwagon. All the cool countries are doing it. Canada's system has its problems (lots of them - a 12 hour wait in Emergency is not a pleasant experience) but it's better than a purely private medical system. We do seem to be moving toward a two-tiered system where you'd have a choice between paying for your own care or going public. I have no particular fear of that, lots of public health care countries have such a duel system but the public option should always be a valid one.

Posted by John @ 07/25/2005 12:42 PM PST

Well, I was in a car accident on Friday, not badly hurt, but needed to get checked over at the ER anyway. I did a nine hour wait for a doc and x-rays, and I'd trade those three hours for better health insurance for all of us.

For those wondering, my little bitty Toyota Echo was hit, and hit hard, on the driver side front fender near the headlights by a Chevy Tahoe SUV. I can't tell you how glad I was she hit me there and not on the door because her bumper would have come through the window. I have a spained neck and big ugly bruises but, as ascertained by my 9 hour wait and medical science, no structural damage. Thank you car Gods. Toyota really builds a good little car, too. I have meds and one of those soft collars that goes with nothing in my wardrobe, alas. Am waiting on the insurance Gods, so all positive thoughts are very welcome. Ginger

Posted by Ginger Mayerson @ 07/25/2005 04:43 PM PST

I'm glad you weren't hurt too badly. Although I understand a sprained neck can get a little complicated. But hopefully things will work out. I'll be thinking of you.

My previous car was a Tercel. I miss it sometimes. They are tough, scrappy, fuel-efficient little things.

I wonder how much accidents like this would be reduced if we drove smaller, more practical cars instead of urban tanks.

Posted by John @ 07/31/2005 06:24 AM PST




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