TOYOTA ROAD USA

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Toyota has its own reason for smiling. All this is a long way from the company's modest U.S. debut in 1957, when the first Toyopet Crowns--woefully underpowered tadpole-shaped vehicles--were unloaded from the freighter Toyota Maru in Long Beach, California. Yet even as Toyota improved its cars and gained market share, the company remained reluctant to build them on American soil. Not until 1985, when Honda and Nissan were already producing cars in the U.S., did Toyota decide to build the Georgetown plant. The company has since been at pains to avoid such stereotypes as those spoofed in the 1986 Michael Keaton comedy, Gung Ho, which depicted Japanese managers holding fire drill-like pep rallies and speeding up assembly lines to a Chaplinesque frenzy. Toyota responded in methodical fashion: it bought copies of the film to show Japanese managers how not to behave in American factories.

Since then, Toyota has Americanized itself at a rapid pace, which accelerated last year after a nasty trade dispute in which the Clinton Administration threatened to slap a 100% tariff on luxury cars like Toyota's Lexus. Shortly afterward, Toyota executives swooped into Indiana to pick a site for the T100 truck plant and sped up the timetable for the new West Virginia factory. Says senior vice president Jim Olson, a 16-year Ford veteran who joined Toyota in 1985: "It will now be very difficult for the Big Three to attack us as the enemy at the border. We're across the border and we're here."

Yet in the beginning, some locals like Randy Sinkhorn, a fifth-generation Kentuckian who trains welders and other hands at the Georgetown plant, had to overcome deep-seated doubts about working for the Japanese. Even today, Sinkhorn says, laughing, people outside the area want to know, "'Do you work like a dog 15 and 20 hours a day?'" He says he doesn't.

But the company does put workers inside what Olson bluntly calls the "Toyota vise." He describes his Japanese employer as "an immensely stubborn, universally tenacious company. There's this hatred of waste, and [you're] continually driving to get more for less. You're never happy. You're never allowed to be satisfied. Attacks and setbacks are only used as learning exercises."

Toyota's relentless cost engineering creates efficiencies that Detroit can chase but not match. Its philosophy of continuous improvement--rethinking the thousands of steps that go into building each model-- allows Toyota to constantly trim material costs and production time. The company lowered the base price of its 1997 Camry by 4%, for example, after taking steps that included streamlining the front-bumper assembly from 20 parts to 13 and reducing the number of steel body fasteners from 53 to 15. Such improvements enable Toyota to assemble a car in 21 hours, vs. 25 for Ford, 27 for Chrysler and 29 for GM.