Leah Curry Gives Remarks at the Center for Automotive Research

As prepared for:

Leah Curry

President

Toyota Motor Manufacturing West Virginia, Inc.

Center for Automotive Research

Management Briefing Seminars

Monday, July 31, 2017

Good morning, everyone! And, thank you Jay for the invitation to join you in kicking off this year’s Management Briefing Seminars.

I’ve been in the automotive business now for some 20 years, but my manufacturing roots go back to 1980 when I entered the field as a skilled maintenance technician.

Early on in my career, I wore a tool belt and worked on robots and programmable logic controllers, even while expecting two of my children. Just before my second child was born – and prior to the current OSHA safety guidelines – I was troubleshooting a robot.

While I was working on it, I leaned in and my pregnant belly touched an unguarded wire, and I received a shock! To this day my family has a long-running joke, saying that’s what’s wrong with my son! That said, like many of you today, I feel right at home here talking about manufacturing and being in this automotive setting!

It’s a transformative time for our industry, and at Toyota.

I started with Toyota as the Princeton, Indiana plant was being built. That was in 1997, and at the time, Toyota had just one other vehicle manufacturing plant in the U.S. – located in Georgetown, Kentucky – and our engine plant in Buffalo, West Virginia had just broken ground the year before.

Fast forward two decades, and we now have 10 plants across the country, employing 136,000 people and producing over 2 million cars and trucks and nearly as many engines in a single year.

Needless to say, we’ve come a long way, and things certainly have changed since I started with the company.

In 1997, Prius was the game changer that our company and the industry was talking about.

Today, while hybrid technology is still very much a part of the mobility conversation, it’s broadened to include things like autonomous driving, 3D printed cars and the Toyota Mirai, a hydrogen fuel cell vehicle capable of emitting only water vapor.

Our industry is at the center of technology and innovation, which makes it an exciting time to be an automaker.

This time reminds me of the “Race for the Moon” era in the late 60s when technology was advancing at such a rapid rate. I realize that reference may date me, but I truly sense the same excitement as that time.

But today… I’d actually like to talk about simplicity. In fact, in this era of more complex and more sophisticated cars and car-making technology, at Toyota, we’re looking for a simpler way of doing things.

That’s where Toyota New Global Architecture comes in.

You’ve likely heard a little about this recently, with the launch of the all-new 2018 Camry- the first U.S.- assembled vehicle built on Toyota’s new global architecture.

It’s a beautiful car… can we just pause a moment and enjoy this view?

This new Camry is grabbing headlines with its newfound performance and style, and rightfully so.

But, TNGA, as you saw in the video, is about much more than just great-looking cars.

At its core, it is an intentional “rethinking” of how we work at Toyota and a “reworking” of how we develop and produce vehicles.

TNGA was born out of a time of intense reflection for our company and is a strategic step in our ongoing pursuit to grow sustainably … to become, as Akio Toyoda put it, “a tree with a strong trunk.”

With the aim of building ever- better cars for our customers, TNGA is about:

· Improving basic vehicle performance by enhancing powertrains and platforms and designing cars you want to own at first sight.

· It’s about smarter manufacturing by introducing shared platforms, parts and powertrain components with the goal of reducing resources required for development by 20 percent or more.

· And it’s about working even closer with suppliers to further reduce costs and reinvest the resulting resources into developing advanced technologies and strengthening product appeal.

TNGA represents a new Toyota – and it’s a game changer for our cars, our company and our customers.

And it’s been nothing less than that for our plant in West Virginia, too.

With TNGA, we’re introducing new engines and new transmissions… which is great news for Toyota’s U.S. powertrain operations.

And, while the 2018 Camry is stunning… if you’ve ever gotten your hands on a transmission or taken apart an engine, like I recently had the opportunity to do…you know it’s what’s on the inside that counts.

My sons were curious if that transmission worked after I reassembled it! I said of ‘course it did!’ But it wasn’t actually placed into a vehicle! As you can see, they’re a work of art!

And, the folks we have building engines in West Virginia are among the best in the business.

Toyota West Virginia is the only Toyota plant in North America to produce both four-cylinder and V6 engines and six- and eight-speed transmissions. A new transmission rolls off the assembly line about every 25 seconds, with four-cylinder engines rolling off every 30 seconds.

Those represent the fastest production times for Toyota, globally.

Out of West Virginia, we’re supplying engines for the Camry, Corolla, Sienna, Highlander and Lexus RX 350 and transmissions for most of these vehicles plus the RAV4 and Avalon.

And, in one year, we can crank out more than 650,000 engines and 740,000 transmissions.

All with a workforce of about 1,650 team members.

So, you might say we’re the little engine plant that could.

But, on top of all this, in 2016, we kicked off a $400 million dollar reinvestment in our 20-year-old plant to become one of the first Toyota plants in North America to introduce Toyota New Global Architecture.

This marked the largest investment in our plant since breaking ground two decades ago, and has prepared our plant for the next generation of powertrain production.

Through TNGA, we’re developing powertrains and platforms together to create a lower center of gravity for our vehicles, making components lighter and more compact, and applying unified design through modularization.

In West Virginia, with this $400 million dollar investment, that has translated into an overhaul of our 8-speed transmission line, the addition of an all-new 4-cylinder engine line and an extensive renovation of our gear production line, the only one of its kind for Toyota in North America.

This required an unprecedented amount of change for our plant- 50 percent new processes in fact- and an aggressive timeline of about 12 to 14 months to complete.

But, with twenty years of production experience, we had a few “firsts” under our belt in West Virginia…

Like in 2001, when we became the first Toyota plant in North America to produce transmissions… in 2002, when we became the first plant outside Japan to produce Lexus engines and transmissions… and, in 2008, when our plant became the first- and only- Toyota plant outside Japan to make and machine gears.

We were up for the challenge.

To prepare for the launch of TNGA production last year, we invested in our plant’s technology and equipment to create work areas that are modular and flexible- a core tenet of any TNGA plant.

Thanks to this new set up, during assembly, team members can now move with the engine as it moves on our new 4-cylinder line, and adjust the height of a process for easy ergonomic access.

We also invested in more efficient and cost-effective tools, moving away from monument-type equipment.

Older gear tools, for instance, come with a high capital investment and were expensive- tens of thousands of dollars, even- to replace… our new ones are more precise, and carry a fraction of the cost.

But our most important TNGA investment was in our team.

I mentioned earlier that our team members are among the best in America- if not the world- at what they do. The skill it takes to build an engine… to build a transmission… or to machine a gear… is impeccable.

As I’ve learned from our team members, it isn’t about millimeter precision; it’s about micron precision.

The team members working on our gear line are trained to pick up on defects as small as 3 to 6 microns. That’s substantially less than a single strand of hair.

But, with TNGA, we took on the challenge to get even better at our craft. And, we responded by putting nearly half a million hours into training.

As I mentioned earlier, to launch TNGA, our team members were asked to learn 50 percent NEW processes.

That meant hours studying, hours practicing and hours spent on the job. Each team member, in fact, went through 450 reps of their processes- which included memorizing on average around 20 steps per process- before they were considered TNGA ready.

This preparation also meant trips to Japan to learn from experts at the plants that had already launched TNGA- what we call go and see. It also meant in-person guidance from those same experts, later on, as we began to launch TNGA in West Virginia.

Today, these investments are adding up to a nimbler plant and workforce, capable of responding quickly to the needs and desires of our customers- a fundamental TNGA benefit.

But the real results can be found under the hood of the 2018 Camrys, which you can experience firsthand very soon as they begin to arrive on dealer lots across America.

What’s happening at our plant in West Virginia and in Kentucky now with the launch of the new Camry, is a reflection of Toyota’s global TNGA vision.

So, now, let’s look at the big picture.

Prior to TNGA, worldwide, we were building models on approximately 100 different platforms with as many as 800 engine variations.

The shear variety of this number of models and engines made our ultimate goal of ever-better- on each model- pretty challenging. If not impossible.

By introducing TNGA, these numbers are being dramatically reduced. And, with efficiencies gained as a result, in the future we’ll be able to quickly provide our customers worldwide with ever-better vehicle options that are also more environmentally-friendly and fuel-efficient.

TNGA in fact is ushering in new possibilities with engine and transmission efficiency that are equating to direct savings at the pump, while also delivering more get up and go.

In fact, across our vehicles, we’re increasing the overall fuel efficiency of our powertrains by approximately 25 percent and overall power output by more than 15 percent.

To give you an example of how this will take shape, look no further than the 2018 Camry.

It now reaches an estimated 206 peak horsepower and still gets a combined 34 MPG… that’s a 26 percent improvement over the last model.

By the end of 2021, Toyota plans to introduce 17 versions of nine engines, including the new 2.5-liter engine in the 2018 Camry, and 10 versions of four transmissions.

In this same timeframe, Toyota aims to have these new TNGA powertrain units in at least 60 percent of Toyota-brand and Lexus-brand vehicles sold annually in several markets worldwide, including the U.S.

Great news for those of you in the market for a new car!

Although rolling out new TNGA platforms and powertrain components will temporarily require increased production line investment, overall we’re expecting these investments to be lower than in the past.

This goes back to smarter manufacturing.

And because TNGA's strategic sharing of parts and components allows multiple platforms and powertrain components to be added to a line for mixed production, as a company, we’ll be able to respond flexibly to changes in demand and achieve significant reductions in overall production line investment in the future.

Most importantly though, for our customers, TNGA means better design and functionality. It means not having to choose between “get up and go” and the gas pump.

It also means improved handling and a more comfortable ride- the kind that makes you want to keep on driving.

By improving basic vehicle performance, enhancing powertrains and platforms, designing cars you want to own at first sight and by introducing smarter manufacturing with shared platforms, parts and powertrain components, TNGA is changing the game for our cars, company, and our customers.

It represents a new Toyota – and, the new 2018 Camry is just the start.