There is a scenario that demonstrates the power of change, which is a strategy to survive

and thrive during the Great Recession from December 2007 to June 2009.

As sales profit and total revenues have declined, Toyota has planned to set the
profitability at 70% capacity. This 70% target capacity includes the cutting of fixed operating
costs both in the plants and in all support functions. One of the most prevalent measure for
most companies is to dramatically reduce cost by laying off workers and executives.

However, no workers and executives are forcibly dismissed in some Toyota North
America plants like Toyota Motor Manufacturing Indiana, Inc. (TMMI) and Toyota Motor
Manufacturing Texas, Inc. (TMMTX).

During the first quarter of 2009, 40% of the employees of TMMI were not building
cars. Instead, TMMI focuses on investing its workers by delivering classroom training with
hands-on Kaizen projects. Initially, the defect rate occurred during the car assembly is about
150 defects per 100 vehicles. By the middle of 2009, it has reduced by progressive training
down to 20 defects per 100 vehicles. As a result, the productivity of the manufacturing plant
has enhanced over time.

As for (TMMTX), the Toyota Business Practices training is conducted for the manager
level and above. Additional training modules are even developed which comprise wide-ranging
topics such as statistical methods for quality control, ergonomics analysis, work hazards
training, line balancing, and equipment maintenance. As the training has commenced, a big
gap is identified between how much employees are expected to know and how much employees
really know. Gradually, the plant is able to improve on cost reduction, quality, and safety during
this unfortunate period.

The significance of workforce is subjectively evaluated in different industries. Some

companies perceive workforce as dispensable expenses, except for these Toyota manufacturing
plant. To them, it is unwise to give up previously well-trained employees to solve a temporary
crisis. Employees are one of the ultimate weapons in achieving business outcomes, not
customers. Lawrence Bossidy, Former COO of General Electric has once emphasized the
employee’s roles in the industry world. He has said: “Nothing we do is more important than
hiring and developing people. At the end of the day, you bet on people, not on strategies”.

The entire cost cutting in these Toyota plants was done for future profitability. The idea
is to cut any expenses that did not have an impact on customers or on the company’s future
growth prospects. As a result, the workforce retainment ensures that the company will emerge
from the recession stronger than ever. Through workforce retainment during the Great
Recession, Toyota plants have the competitive advantage to design and build competitive
products as compared to other automobile manufacturers in the long term.

In summary, there can’t be only one strategy or solution in overcoming different

situations. As mentioned above, firing employees is not the only way to sustain and prosper in
the market. There are always some feasible, worthwhile and fruitful alternatives that await us
to be implemented. Just as in the conduct of the war, there is no fixed situation and condition,
just like water has no constant shape and configuration.