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Technologies and the Human Element

Technology is only worthwhile if the human capital is available- that’s what IO tells us about technological innovation and related spending on R&D to cut costs, thereby increasing bottom lines. As we’ve read previously in the term, Toyota has been on the cutting edge of lowering costs through manufacturing. First seen in Toyota’s implementation of the third shift (which was eventually taken up across the automotive sector), Toyota has recently begun a new cost cutting endeavor, all while focusing on human capital in order to truly achieve gains from already enhanced technology and production processes.

Toyota, in conjunction with the University of Kentucky is now offering a two year associates program for skilled workers. From public speaking, to history, to English classes, the program offers all courses considered mandatory for associate’s degree level of achievement- all the while offering real work experience in factories and tailoring an education to maximize the development of productive skills.

Toyota had found their hired work force to be lack luster. “We can’t just go out and throw up some ads and hire some skilled people. They’re not out there,” says Dennis Dio Parker, an assistant manager at Toyota who helped create the AMT Program. “They’re not talented at the level we need them to be talented,” says Parker.

While advanced manufacturing skills are weakly supplied by the current workforce, they are in high demand. Further, almost all of the students who complete the program end up with a job, with a starting salary close to $65,000 a year. With overtime, pay can be as much as $80,000. That’s more than the median starting salary for graduates of the highest-earning bachelor’s degree programs in the United States, according to a recent report by PayScale.

In addition, the skills learned at Kentucky’s AMT program are transferable. According to the author, even at companies like 3M, the skill set required is hardly different from those required to work at Toyota. As such, 15 other companies have gone in on the endeavor, and have seen great boosts to their work force as a result.

The typical school day emphasizes the focused industry; instead of U.S. history classes, one might take U.S. history of automobiles to achieve credit. Public speaking and English classes encourage students to practice effective communicative skills, both orally and written. Students take robotics classes, and learn the inside and outs of manufacturing organization. Students have eight hour days, three days working at the plant at $12/hour with raises every six months with the other two days devoted to academic studies. With wages, students leave the program debt free and career ready.

Toyota and their associated partners in this endeavor have made extreme progress in attracting some of the best and brightest. While applicants still don’t have the same average standardized scores that the program initially would have hoped, as word of success spreads, the program is becoming more and more competitive. With college more expensive than ever and offering only ambiguous future career opportunities, Toyota has taken the future of its technology and manufacturing into its own hands, simultaneously solving problems that plague our generation. With such great economic benefits, we might soon see a higher education revolution with private companies and future employers playing a greater role in the educational experience.

A company short on skilled workers creates its own college-degree program


  1. warringl16 warringl16

    This program is very similar to what many STEM-based companies offer. For example, NASA and DuPont will pay for graduate school as well as a salary to students who agree to work for the company for a few years after graduate school is completed (i.e. a career pathway). I believe these types of programs are beneficial for firms as employee turnover would decrease, thus reducing a firm’s costs while improving efficiency. Less funds are needed to train new employees, and employees who stay continue to gain experience. As a result, firms with programs that provide educational benefits to workers gain a competitive edge over other firms. Nonetheless, I would expect other companies, particularly those in the automotive industry, to follow suit and begin offering their own educational/work programs.

  2. strauss strauss

    I recently read an article on the shortage of skilled workers in the US, and this issue inevitably comes up every election cycle. Despite what the soundbites from politicians tell us, the issue has more to do with low pay being offered for these positions. A model for a labor market would show us that if there is a shortage for a particular industry then the pay should rise for that sector, but for whatever reason pay for skilled workers in the US has only risen slowly. Toyota’s decision to train the workers themselves and offer a well paying job upon completion makes perfect sense in this situation, and I would expect other firms to make similar moves or at least raise the pay for these workers.

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