Toyota In Valenciennes, France:

Toyota in Valenciennes, France:

Cultural Communication and the Fate of the Yaris

December 1st, 2003

Claude Boulle, former Ministry of Labor official and current Vice President of

Administration at the Toyota Onnaing production facility, quietly sat at his desk among a

sea of executives in a collective, open work space. Despite having worked at Toyota's

Onnaing automotive factory in the suburbs of Valenciennes, France for several years,

Boulle felt uncomfortable at his desk; he still was not used to the Japanese style of shared

working space. He missed his private office. Sitting among the clamor and din of a half

dozen executives, Boulle began to daydream. The first Yaris, the company's most

popular and successful model, rolled off production floors less than three years ago.

Today, his facility produced upwards of 200,000 cars a year.

Restless, he stood up and headed out to the corporate cafeteria for a late breakfast.

Along the way, he passed several young French employees clad in blue and white jackets

emblazoned with the company's logo: dual, intersecting ovals that formed a sleek and

modern 'T.' Below the logo, the jackets were personalized with the employees' first

names. In the cafeteria, Boulle dined with a number of floor workers having just returned

from morning exercises. He hadn't thought it possible...

Toyota had managed to construct a world class, state-of-the-art production

facility capable of producing 16,500 units a month utilizing the Toyota Way1 , a

comprehensive philosophy composed of 14 management principles for successful

automotive manufacturing. Given that Toyota established the Valenciennes plant just a

few years ago, Boulle was skeptical that a Japanese corporate environment and

management style was applicable in a French environment. He had good reason...the

cultures were so different....Mixed feelings still existed on the work floor and in the

executive office, but the Japanese prepared well before arriving. Corporate offices in

Tokyo had researched long ago probable French reaction to the Toyota Way.2 Having

sent executives to live and study in France, as well as in French Canada, the firm felt

ready to select a site. Today, Toyota Onnaing still was not free from cultural

misunderstanding, but the Yaris retained its market share in Europe.

Boulle wondered, though, how long success would last, and if Toyota could

weather a longer storm. He returned to his desk, collected his employee evaluation sheets,

and prepared for a board meeting with plant President Hiroaki Watanabe and CGT, a

French labor union. One week earlier, several recently fired employees had filed a formal

complaint against management, charging harassment on the work floor3. Toyota claimed

that the workers were belligerently absent and routinely arrived for their shift up to thirty

minutes late. Boulle sighed...after all the company had accomplished and compromised,

this was the third similar occurrence in a month.

1 See exhibit 1 for a listing of all 14 Toyota Way principles.

2 Tagliabue, John. 'At a French Factory, Culture is a Two-Way Street' New York Times. February 25,

2001. Page 4.

3 'CGT denounces trade union repression and harassment.' France Press Agency. November 26, 2003.

Had Toyota managed a cross cultural miracle, or would the Yaris fall victim to

unresolved cultural differences? Union challenges in Japan were uncommon, and

Japanese management in Valenciennes often responded slowly to labor complaints. This

was still one area of cultural management that had not been sufficiently addressed.

Historical background

Valenciennes: a recovering economically depressed region

Valenciennes is a medium-sized city of 350,000 inhabitants in the northeast of

France near the Belgium border. The region was severely struck by the steel crisis of the

1970s and the following constriction of the coal mining industry. With an unemployment

rate approaching 30% during the 1980s, the region suffered from economic depression.

Unemployment decreased steadily with the arrival of Jean-Louis Borloo as mayor

in 1989. For thirteen years, he reduced the jobless rate from 22% to 14% thanks to a

policy promoting industrial diversification. The installation of the Toyota factory in

Onnaing, in the industrial suburbs of Valenciennes, was a very important piece of this

regional revitalization process, as it promised the creation of more than 2,000 jobs. Given

the economic circumstances of the Valenciennes region, the Japanese plant was more

than welcome.

There were some concerns, however, about the company's willingness to remain

in the region for the long-term. To attract Toyota, national and local governments, as well

as