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I first found this article posted in the acuramdx.org forum of all places!

The Globe And Mail
http://www.globeandmail.com/servlet/...tory/Business/

Canada gears up to build the Lexus

By GREG KEENAN
From Saturday's Globe and Mail

Cambridge, Ont. — Toiling away in a non-descript industrial park north of Toronto, a handful of workers at Polybrite wear T-shirts that read: Team RX330.

They have visited a nearby dealership to get a close-up look at the Lexus RX330 sport utility vehicle and talk to salespeople. Some have made the trip more than once. They have travelled to Toyota Motor Manufacturing Canada Inc. (TMMC) in Cambridge to see the assembly line being set up.

Vehicles have been brought to Polybrite -- more than once.

All that is just for the grille. Just the grille? Don't say that to Mike Brett, general manager of the two Decoma International Inc. Polybrite plants where the grille for the RX330 will be manufactured and assembled.

"If anything defines the vehicle, it's the grille," he says. "Their customers attach a lot of importance to it. The fit and finish and quality of a grille goes beyond what is needed for its practical purpose."

This is the devotion to quality Toyota is seeking from suppliers, their employees and its own team members as it gears up for the most important vehicle launch in its history and arguably the most important for the auto maker in North America since Toyota began making cars here in the 1980s.

"This is a real feather not only for TMMC, it's a real feather for Canada," says Ray Tanguay, president of TMMC.

"There's not a better compliment that we can get."

Al Power, Decoma's president, echoes that view.

"We know we have a world-class industry here in Canada," Mr. Power says. "This kind of reaffirms it."

It's not an experiment. Toyota has anointed its Canadian plant to assemble the first Lexus model outside Japan and chose the highest-selling Lexus vehicle in North America, not a niche car with sales of 10,000 or 12,000 a year.

Toyota's luxury Lexus division sold 73,000 RX300 models last year -- the name for the previous generation of the SUV. The RX330 -- versions made in Japan are already on sale in Canada -- sells for between $49,900 and $62,295 in Canada.

There's a three-month wait for the fully loaded version, which comes with a DVD-based navigation system and DVD player and a rear-mounted camera that shows drivers what's behind them as they back up.

An RX330 will come off the line every 3.5 minutes once the 700 TMMC employees crank the assembly line up to full production of 60,000 vehicles a year late this fall.

"It's a full-fledged investment in Canada," says industry analyst Koji Endo, who follows Toyota for Credit Suisse First Boston in Tokyo.

"It's very important."

To make sure that parent Toyota Motor Corp. in Japan doesn't end up thinking it made a mistake, Mr. Tanguay is seeking perfection.

Lexus ads talk about the relentless pursuit of perfection. Mr. Tanguay dismisses that. Instead, he refers to "the passionate pursuit of perfection. 'Relentless' doesn't have enough energy."

At Polybrite, Mr. Brett understands the message.

"You don't discuss tolerances," he says, "you discuss perfect fit."

He and his team began preparing for perfect production last year.

They already manufacture a grille for Toyota's Camry sedan, which is assembled in Kentucky.

So they set up a work cell for Camry grilles using the Toyota production system, which demands -- among other things -- that workers ensure the final quality of the parts before they hit the loading dock and so-called one-piece flow, where the assembly of the parts is done without interruption.

Once production for Lexus starts later this year, Polybrite workers will be able to make a smooth transition to the RX330 grille.

Decoma officials can't reveal the price of the grille. But on the average vehicle it's a $40 or $50 part.

"When the Lexus was a question mark about North America, the question mark was whether we had the supplier infrastructure in place to meet the Lexus quality," Mr. Tanguay says.

So he and other TMMC executives have spent much time in the past few months visiting suppliers, assessing their plants and procedures and making sure they will be ready.

"Is the building up? Are the tools in place?" asks Dave Nicolle, assistant general manager of supplier preparation. "Are you ready for the various milestones?"

Mr. Nicolle has urged suppliers to make their Lexus work areas stand out from the rest of their operations. Suppliers take extra care of the tools they're using to make Lexus parts, he says, so one supplier will put its Lexus tools on a clean rack and cover them with a curtain.

The Cambridge operation is also making sure its own house is in order, from the body shop to the paint shop to final assembly.

Employees who work in the paint shop face some of the strictest rules in the entire plant.

They can't use Snuggle or Downy fabric softeners on their clothes. English Leather colognes are forbidden.

Fumes from any of those items can contaminate the paint and cause craters in the final coat.

Forklifts used in the paint shop can't go anywhere else in the plant. Cardboard is banned in the paint shop to reduce airborne fibres.

Toyota has also found a way to make the paint shop more environmentally friendly.

The traditional way of sending vehicles through a paint shop is in batches of 30 or 50 or more. Fifty vehicles will go through and be painted white. The next 50 will be painted blue.

The sprayers have to be flushed with solvent each time the colour changes, causing an environmental headache and waste if the colours are switched for each individual vehicle.

But Toyota will paint the SUVs individually. It has developed a system where a robot will grab a cartridge filled with one colour, spray the SUV, put the cartridge back and pick up another cartridge to spray the next vehicle.

That drastically reduces the need to flush the sprayers.

"We don't find too many customers who want to buy 50 cars," Mr. Tanguay says. Toyota is trying to develop a more customer-driven assembly process, so that vehicles are assembled as people order them.

Throughout the plant, where contractors are erecting robots and buzzing about in forklifts and team members are sequestered in a room full of computers designing their workstations, there are constant reminders that quality is not the most important thing, it's the only thing.

In the body shop, billboards advise team members about processes where extra care needs to be taken, the rear suspension mounts, to cite one example.

Banks of video monitors will sit near the assembly line so workers can examine specific elements of a job close-up.

Touching will be kept to a minimum.

That's particularly critical in the interior, where the wood trim in each vehicle will come as much possible from the same tree, so any damage to one piece means all the trim has to be replaced. And it's real wood -- walnut from U.S. forests and bird's eye maple from Canada.

The wood is sent to Switzerland for cutting, then to Germany for storage and distribution, and to Romania where it's manufactured into the trim for centre and rear consoles and door and seat trim.

Then it goes back to Germany and from there to parts plants in Palmerston, Ont., and Elmira, Ont., for installation into the components that will go in the vehicle.

Mr. Tanguay says the goal is to infuse the entire TMMC operation -- Corolla sedans and Matrix crossover utility vehicles are cranked out on another assembly line -- with the attention to quality that is essential for Lexus.

"We want to make a Lexus plant," he says.

When asked if that means converting the entire plant to Lexus production, he points out that any discussion of that is premature since "we haven't produced anything yet."

But Mr. Endo, the Credit Suisse analyst in Tokyo, says it makes a lot of sense to turn the plant over completely to Lexus, perhaps by adding production of the ES300 sedan, which shares the same underbody as the RX330.

If the market share losses experienced by the Big Three U.S. auto makers continue, he says, they may force the U.S. government to place tariffs or quotas on imports, which would hit Lexus hard, since most of the division's vehicles are imported from Japan, even with production of the SUV starting here.

"It's kind of essential to make Lexus in North America," he says.

For Canadian suppliers, such as Decoma, the hope is that supplying parts for Lexus will lead to more business with Toyota.

"This is a golden opportunity for them to raise the bar and put themselves above the competition," Mr. Tanguay says.

Decoma's Mr. Power says the Lexus contract has led to additional business with Toyota in both North America and Europe that will begin in the next few years.

Toyota is the kind of customer Decoma wants, he says, because although it is demanding, it works with its suppliers to help improve processes and doesn't switch suppliers constantly in search of a cheaper price.

"They look at it as a failure to have to change suppliers -- a failure on their part," Mr. Power says.

And he compares that attitude with the stance taken by other auto makers.

"They just want to come into our plants to figure out how they can take our money away."