The Toyota Peugeot Citroën Automobile company completed the installation of technology in all plant operations and is proceeding with the comprehensive testing of technology phase. Finishing the installation is an important step in preparing to start mass production in the first quarter of 2005. In addition to preparing technology, the preparation and training of employees is just as important. To date, the company has invested over one billion crowns in TPCA employee training. Successful preparations for mass production led TPCA to a substantial increase in employee salaries by an average of 18% by 1.1.2005.

1. B-zero Project

In July 2001, the Toyota Motor Corporation and PSA Peugeot Citroën signed a contract for the joint development and production of a new small car, codenamed B -zero. The project included the construction of a new joint manufacturing plant.

Choosing a suitable site began immediately after signing the contract and in December 2001, the company announced that the chosen construction site of the plant was Kolín in Central Bohemia. The site selection was carried out in record time and the period of three and a half years from the start of the project to start mass production in the first quarter of next year will be the shortest in automobile industry.

The new car, B -Zero, who is known from the Paris Motor Show as Toyota Aygo, Peugeot 107 and Citroën C1, will only be available to European markets, but the scope of the project is global: Two automobile companies coming from completely different regions with completely different corporate cultures come together to build a plant in a third country -the Czech Republic. Three nationalities speaking predominantly English, which is not the mother tongue of any of the nationalities, are involved in the whole project. Open communication and mutual respect are therefore prerequisites for success.

2. Preparations for start of production
 
2.1. Technology preparations
 
The installation of technology was started In April 2004 for all operations at TPCA (stamp, welding, paint and final assembly) and was completed in early October 2004, exactly as planned. Upon finishing the installation, comprehensive testing of technologies was run on all operations, which will last until December 2004.
During comprehensive testing, the functionality of individual parts of equipment or operations is tested without material or with material. The plant itself as a whole is not tested. In December 2004, the factory goes into trial operation, which results in commercial mass production in the first quarter of 2005.

Production planning requires careful coordination with the suppliers of parts. Currently, 75 % of the suppliers chosen will supply parts from the Czech Republic, 15% from Poland and 10 % from other countries. 1.0 petrol engines and transmissions will come from Polish Toyota plants, 1.4 HDi PSA diesel engines will be provided by the PSA Peugeot Citroën plant in Douvrin, France.

The successful completion of the installation of technology phase also opens up great challenges and tasks that stand before TPCA. The primary objective is unmatched quality and TPCA has set the task of being one of the best quality producing plants of Toyota and PSA Peugeot Citroën in the world for itself.

The second major challenge is the efficiency of production. Many car manufacturers have abandoned the segment of small cars due to their low profitability. Toyota and PSA Peugeot Citroën came into this segment on the other hand because both companies are convinced that the production of small cars can be profitable. But this can only be achieved by the most efficient manufacturing, cutting costs every day, eliminating all losses and delays in the production process and lean -production. On the other hand, TPCA is not going to accept any compromises in terms of quality.

The key to achieving these goals is the TPS production system (Toyota Production System) and its basic principles: continuous improvement (Kaizen), solving problems at the spot of occurrence (Genchi Genbutsu), stop the production process immediately once discovering a problem (Jidoka) and teamwork.

Completion of the installation of technology also allows induction and training of employees at TPCA production facilities. So far such training must be conducted in foreign Toyota plants in France, Japan, Great Britain and Turkey. The planned tact-time one minute on each car requires thorough training of all employees. 

2.2. Preparation of human resources

TPCA recruitment was launched in May 2003. Gradually, management positions of managers and engineers were filled, then specialist positions and Group Leaders (Masters), further then Team Leaders, and finally Team members. The recruitment curve has been rising gradually, and its peak of 3, 000 employees shall be reached in September 2005, when the third shift recruitment will be complete. To date, TPCA employs 1,205 staff and recruitment for the first shift is complete. Since, the job was accepted by approximately 150 other employees. 

2.3. Job market

The job market shows a considerable level of competition as well as any other market. TPCA’s goal is to get the best employees, who are available on the market, and therefore must enter into a hard competition with other employers. First, TPCA does not want to limit recruitment for resident applicants and considers the whole Czech Republic as an attraction zone. The program to support mobility is prepared for employees from greater distances:

·        Public housing – Kolín city is building a total of 850 flats for TPCA. The first 57 were completed in July 2004, another 80 will be operational by the end of the year and the rest of the flats will be available in 2005. Objective criteria decide the allocation of housing: workers at the lowest positions are at an advantage, while the managers do not qualify for apartments.

·        Hostel support - TPCA contributes CZK 1,500/month for hostels for employees from distant regions, who have not yet received public housing,

·        Moving support - TPCA contributes financially to the costs associated with relocating employees. It also provides one day of paid leave (according to the Labour Code, the employee is only entitled to unpaid leave). 

Second, TPCA aims to be as close as possible to potential bidders and to simplify the selection process. Currently, TPCA recruitment days are being held in regions with high unemployment, such as Most, Teplice, Cheb and more. Candidates here can pass through the first round of the selection process, which saves them a trip to Kolín.

Finally, TPCA addresses potential employees with standard marketing tools such as advertising media, promotional materials, billboards and the like.

2.4. Training
To date, TPCA (Toyota Peugeot Citroën Automobile) has invested CZK 1.1 billion in the skills of Czech employees. The investments are made in three basic types of qualifications:

Ø  License (training specific skills)

Ø  Technical skills

Ø  Internships abroad

The high standard of quality and production efficiency of Toyota and PSA Peugeot Citroën car companies puts the same high standards into the skilled workforce. The complete training system guarantees that the qualifications of the employees will be exactly at the required level. It also allows recruiting candidates without experience in the automobile industry, including new graduates.

2.4.1 License (training specific skills)

TPCA provides employees with a number of courses to enhance skills and acquire new skills. These are "supporting" skills that employees in production or maintenance must manage for the performance of their job. Examples are working with a forklift, welding and crane work, working at heights and more. All courses are completed by awarding licenses valid in the Czech Republic.   

Number of issued licenses: 1866

Number of training days: 5985
 
2.4.2 Technical skills training
This training is the final step in the preparation for employment and may vary by individual departments. For maintenance it is, for example: the theory of electricity, electrical repairs, technical drawings and the like. Production employees prepare for specific work on the production line or in logistics. Technical skills training, which takes an average of three to four weeks, must be passed by each employee except for administration.

2.4.3 Internships abroad
Employee training for mass production takes place in the Toyota plant in France, Great Britain, Turkey and Japan. TPCA has sent 667 employees for internships abroad by 1.10. 2004 and by the end of 2004, there will 700. TPCA employees spent 18763 days abroad overall. By the end the year it will be 2,150 days.

2.5. Translations and interpreters
 
By sending Czech employees into plants abroad as well as foreign trainers coming to work at TPCA requires the provision of extensive translation and interpreting services. In each of the foreign plants (including Turkey and Japan) around ten interpreters are permanently available and about another twenty interpreters work at TPCA. The cost for translation and interpreting services amounted to CZK 47 million.

2.7. National incentives

A smaller part of the cost of retraining employees will be covered by the national incentive. Its exact value will, however, be quantified until after the conclusion of the training activities and subsequent negotiations with the responsible institutions.

2.6. Salary policy

The successful completion of technologies, successful development of the B-zero project while transitioning into the most important phase - preparation for the start of production - led TPCA management to decide on increasing the base salaries for all TPCA employees across the board by an average of 18% and a bonus of 5% in effect from 1. 1. 2005. 

2.6.1 Remuneration and motivation

The TPCA philosophy is: "Share success with employees." TPCA did not earn any profit since its formation due to ongoing preparations and wages must have reflected this fact. Today it is clear that preparations for the start of production are taking place well above expectations and company profitability is a question of the very near future. For this reason, the salaries may be increased throughout the company, and sooner than originally planned. This step is a reward for the employees for their contribution to TPCA’s and the B-zero project’s success.

An increase in salaries is also the motivation: TPCA is entering the final stages of preparation. During this period it is necessary for maximum cooperation and effort of all TPCA employees leading to a common goal, which is to start actual production. Therefore, the increase in salary was accompanied by an increase in bonuses as well.