Toyota is worried that growth of its U.S. labor costs could cut into the automaker’s future profits. According to a internal high-level report, Toyota wages and benefits in the U.S. are among the highest in the auto industry and are growing faster than the company’s profit margin.

The report by Seiichi (Sean) Sudo, president of Toyota Engineering & Manufacturing in North America, said that the automaker should try keep wages more in line with the local manufacturing pay, “and not tie ourselves so closely to the U.S. auto industry, or other competitors.”

“The U.S. auto industry pays among the highest manufacturing wages in the world. Compared with Japan and France, the U.S. auto industry pays 50% higher wages and over five times more than Mexico’s auto manufacturers,” according to Sudo’s report.

The Detroit Free Press reported last week that some of Toyota’s nonunion workers at its Georgetown, Ky. plant earned more than UAW assembly workers for Detroit’s automakers.

Most nonunion automaker’s, except for Hyundai, have set their wages based on UAW wages to avoid unionization. Workers at Hyundai’s Alabama plant make about half the wages, bonuses and benefits of Toyota, Honda, Nissan and the Detroit automakers. But they are about 30 percent higher than comparable Alabama manufacturing wages.

Toyota, despite its record profits, continues to keep its eye on problems that could occur years down the road. Toyota has said that the automaker it worries the most about is Hyundai, and Toyota appears to be pulling a page out of Hyundai’s manual.

## Source: The Detroit Free Press ##

Posted in: Toyota, Manufacturing, Business, Financial
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