This article first appeared in IMPO's June 2013 issue.
Many don’t think of Toshiba as an American-made brand, especially when it comes to the U.S. automotive market. And for quite some time, that was true. Since 2003, Toshiba had manufactured hybrid electric vehicle (HEV) motors for Ford Motor Company at its Japan facility. But in 2011, under the weight of supply chain pressures and growing currency risks, Toshiba Industrial Corporation began manufacturing motors for Ford’s hybrid vehicles in Houston, TX. The U.S. HEV plant today produces 130,000 motors annually and employs over 100 American workers.
A wholly-owned subsidiary of Toshiba America Inc., Toshiba International Corporation (TIC) already had facilities in Houston, making it a “prime location,” says Matthew Bates, HEV plant manager. Other locations were considered, but TIC ultimately chose Houston for a variety of reasons. “Houston has one of the most talented and productive work forces in the country, and its strong economy and low cost of living helps businesses attract and retain top talent from across the country,” explains Bates. “This current environment makes Houston an ideal place for future business growth.”
While some American auto buyers are ‘buying American,’ TIC and Ford were also looking at the supply chain and examining risks when deciding whether to shift HEV production to the U.S.
Explains Kristina Adamski, Ford Manufacturing and Purchasing communications manager, “Ford’s strategy is to source from where we build. In this case, Toshiba had a footprint in Houston and it was faster for them to utilize their existing facility than to build a new plant. U.S. production of the hybrid motors and generators allows Ford a cost savings on logistics and helps with currency risk.”
Adds Bates, “Anytime you pick up and move your operation, especially one as complex as this, you take a chance of disrupting your supply chain due to focusing so many resources on the large move.” “Toshiba has very high standards and a very high quality product, and we took special care to make sure this was never affected.”