With a Hush, an American Lexus Plant Goes to Work

Last month, a switch was flipped at a sprawling auto factory in Georgetown, Ky., and with it, Toyota started building Lexus cars in the United States for the first time.

It is something of a long-awaited homecoming for a brand that was originally conceived of as an American-focused creation: a way of attracting well-to-do American buyers with a moniker unburdened by the Toyota name’s middle-of-the-road image.

But Lexus vehicles have never been manufactured in the United States, until now. Adding the 50,000 Lexus ES 350 models to be produced each year will transform the Kentucky plant into the largest Toyota factory by volume in the world.

“It underscores just how important the American market is to Toyota, and how growing its manufacturing capability here is a key to its future success,” said Mike Jackson, director of North American product forecasting at IHS Automotive.

That Toyota, the world’s largest automaker, will have its largest factory in the American South is only the latest example of a building boom in the United States by foreign automakers like Toyota, Mercedes-Benz and others. Domestic automakers, by contrast, have resisted building new plants in the United States even as they have announced billions in new investments in their existing production facilities.

Mercedes-Benz last year announced plans to expand its plant in Vance, Ala. And in March, the company’s van division said it would invest around half a billion dollars to build a new Sprinter van factory in North Charleston, S.C., with construction set to begin next year.

Even Volkswagen, reeling from its emissions cheating scandal and forced to consider cutbacks on investments across the globe, nevertheless reaffirmed recently that it would move forward with a $600 million expansion in Chattanooga, Tenn. The Chattanooga factory is growing to build a new sport utility vehicle designed for the American market.

Domestic automakers have taken steps like adding shifts and hiring more workers at existing American plants, but building new ones and expanding facilities in the United States have mainly become the purview of Japanese and European automakers that are taking advantage of the lower shipping and trade costs, currency stability and largely nonunion work force that American factories provide.

“There’s a benefit to understanding what the market is here, as well, and simply coordinating your efforts on a day-to-day basis,” said Jessica Caldwell, a senior analyst at Edmunds.com.

Karl Brauer, an analyst with Kelley Blue Book, said the higher sale prices of luxury vehicles like the Lexus models also made them a safer bet to build in the United States.

“For luxury cars, you have more of a price cushion to protect from fluctuating costs,” Mr. Brauer said. “It’s much tougher for midsize and compact mainstream cars, which is why we’re seeing a lot of that kind of production heading to Mexico.”

In Georgetown, getting the new Lexus production line ready meant an expansion of machinery to create an almost completely separate operation, even down to a separate paint shop, from the rest of the Toyota factory. (Some early-stage steps like stamping panels are shared with the main factory.)


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It also meant training workers in the Lexus quality control methods, which require tighter tolerances for fitting parts compared with regular Toyotas and more meticulous painting. The new model led to 750 new jobs at the factory, and workers spent a total of 1.5 million hours training, said Wil James, president of Toyota Motor Manufacturing, Kentucky.

Some even traveled to Japan, to train with Lexus workers at plants in Kyushu and Tahara. Others were sent to local Lexus dealerships, to observe the differences in how customers approached buying the cars they would build.

Then there is the noise at the plant — or lack of it.

The quest over the last 30 months has been to create what was unimaginable not too long ago: a largely noiseless, hushed atmosphere to house the new assembly line.

“We want our team members to be able to hear a click,” Mr. James said.

Toyotas have been produced in Georgetown since the first American-made Camry in 1988. But Lexus has a set of rules all its own. It is not just enough for a worker to see a potential problem; the worker should be able to hear it, too.

“It’s about detecting things at a much deeper level as a vehicle heads down the line,” Mr. James said. “So we had to design the plant to allow for that.”

Mr. Jackson, the analyst at IHS, said the company’s decision to bring Lexus production to Georgetown was a sign of its confidence in American autoworkers to produce vehicles on par with anyone in the world.

“This is a huge endorsement of the workers’ capabilities and their operations,” he said.

For most of Lexus’s existence, its models were constructed only in Japan, until 2003, when Toyota started producing the RX sport utility vehicle in Ontario, Canada. Until Georgetown, it remained the only plant outside Japan building Lexuses.

“They’re getting past that way of thinking of making them only in Japan,” said Mr. Brauer, the Kelley Blue Book analyst.

He said that with Georgetown becoming Toyota’s largest factory in the world, it would almost certainly hold more sway within the Toyota empire. But he said the company had been trying to decentralize its operations for several years, since the scandal dating back to 2009 over unintended acceleration in Toyota vehicles. That has already led to increased decision-making locally at Toyota’s American facilities.

Back in Georgetown, Mr. James, the factory’s president, said that he intended to take a soft-spoken approach concerning the plant’s status as the company’s largest.

“It’s not about being the biggest,” he said. “It’s about what we can do.”

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