posted on Feb, 17 2011 @ 03:23 PM
Toyota's latest export:
Factories on the cheap, for China
FORTUNE/The Truth About Cars -- Today, I saw a new, and so far the finest specimen of Japan's new export products: A car factory. Recall the press
about a new Toyota factory in the Miyagi Prefecture with a U-shaped assembly line where the assembly time is cut down to a third? Not only did they
get it wrong. They missed the best part of the story: Budget car factories, ready for export.
The article describes the opening of Japan’s latest car factory, and coincidentally the first new Japanese auto plant in nearly 2 decades. The
interesting part is that it is very simple with little automation. Toyota figures that 60% of a typical vehicle’s cost is the plant (and its
lifecycle cost), 25% is raw goods and 15% is labor. The idea here is to design simple inexpensive modular car plants for places like China and
Indonesia where labor is cheap (note the two PLA officers present at the plants opening) and to shift that proportion back to labor cost. As the
article points out, if people are cheaper than robots in Japan, just how much cheaper are they in China?
What does this mean for the future of industry though? The history in industry in the first world has been the mechanization of labor intensive
processes. A steel mill that used to employ 10,000 now does the same work with just 500. Mechanization is primarily what keeps developed economies
competitive with developing ones for value added products.
Does this mark the begging of a trend where this key advantage can be eliminated, speeding the already steep rate of first world deindustrialization?
edit on 17-2-2011 by SirMike because: added link