A Tale of Teamwork: How U.S. Associates Helped Their South Korean Counterparts
January 24, 2012
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Associates, Products, Toyota
Limo in the Limelight – A Sienna premieres at Daejong Film Festival, South Korea’s version of the Academy Awards. The minivan is marketed as a “First Class Limousine” in South Korea.
Just two years after Toyota dealers began selling cars in South Korea, the Japan earthquake and tsunami triggered a flood of challenges.
Production plummeted and inventories shrank, leaving South Korean dealers with near-empty lots. Used cars are a separate business there, so they couldn’t fill the gap. Because they’d been in business for such a short time, dealers lacked a loyal customer base. Service business had yet to grow. With little to sell or service, dealership employees eyed jobs with competitors.
“They were in a world of hurt,” says George Irving, national manager in Toyota Motor Sales (TMS) Export Operations.
The remedy? Export Sienna minivans from the United States.
On the Move – After making sure Siennas move from the United States to South Korea, Hisao Nakabayashi (left), president and CEO of Toyota Motor Korea, and Norm Bafunno, president of Toyota Motor Manufacturing, Indiana, carry a banner signed by grateful Toyota Motor Korea associates. Deemed “a great treasure” by Bafunno, the banner is now on display at the Indiana plant.
When the quake and tsunami pummeled Japan in March 2011, five Toyota dealers were selling Camry, Prius and RAV4 in South Korea. They wanted to add Sienna because none of their competitors sold anything like it. “There was a niche this vehicle could fill,” Irving says.
Immediately.
“Not only did they want it, they wanted it yesterday,” he says. “Usually, dealers want a vehicle for additional profit. These dealers needed the vehicle to help them stay in business. We could not follow the normal timetable.”
It normally takes two or three years to launch a new vehicle in another country. To slash that timetable, Irving and others joined a task force led by Andy Lund, executive program manager in the Product Development Office at Toyota Technical Center.
They held a conference call every Friday at 9 a.m. Eastern time, requiring Irving to dial in from home at 6 a.m. Pacific time. “I learned you cannot have a conference call at 6 a.m. on the 405 Freeway,” he quips.
He also learned the value of a very determined task force leader. “Every time somebody said, ‘No, we can’t do that,’ Andy Lund offered to get on a plane to help them find a way they could do that.”
There was a lot to do to comply with South Korean requirements. Windshields had to contain green-tinted glass, and VINs had to be stamped under the passenger seat. Floor mats had to meet different recycling standards.
Token of Appreciation – After Toyota associates across the U.S. buttoned up the Sienna export project, Toyota Motor Korea representatives wore this button to the Toyota World Convention.
Then there was the remote keyless entry, which used the same frequency as the South Korean Army. The frequency had to be changed.
TMS established payment procedures, and Toyota Logistics Services set up a shipping system. Toyota Motor Manufacturing, Indiana, assembled the minivans.
Last October, just seven months after the quake, the Sienna debuted at Daejong Film Festival, South Korea’s version of the Academy Awards.
In November, Toyota Motor Korea representatives thanked their U.S. counterparts at the Toyota World Convention in Las Vegas. Wearing yellow buttons depicting the American and Korean flags, they presented a banner signed by the approximately 100 associates who work for the South Korean company.
“I thought it was a really nice touch and something you don’t see much in business these days,” Irving says.
Weekend Warrior – After shepherding Siennas to South Korea, TMS Export Operations National Manager George Irving takes time out on a Sunday to visit the Gyeongbokgung Palace in Seoul. One of his South Korean counterparts suggested he dress up as a 14th century palace guard.
South Korean dealers are well on their way to meeting their first-year sales target of 600 Siennas; they sold 100 minivans in the first month alone. This month, Toyota also began exporting 6,000 Camrys a year from Kentucky to South Korea.
Because the dollar-won exchange rate is more favorable than the yen-won rate, exporting vehicles from the United States instead of Japan makes financial sense. “Having customers all over the world stabilizes the product, maximizes capacity at plants and ultimately, gives Americans more jobs,” Irving says. “It’s directly related to Toyota’s profitability.”
But the extraordinary effort to export Siennas to South Korea wasn’t simply about profits. It was about helping people in need.
“This shows Toyota at its best,” Irving says. “Toyota associates rallied around solving a problem for somebody on the other side of the world. Everybody worked together to provide a product that customers want. It shows Toyota is one family.”
By Susan Pack