Closing Down - Making the Best of a Bad Situation

By now it is not uncommon for people to hear about layoffs and downsizing. An interesting local story is one about the closing down of a joint venture between Toyota and GM called the NUMMI plant located in Fremont, California. It has been a long saga whose history, accomplishments and challenges have been discussed throughout the news outlets here in the local area.

What interests me is how Toyota handled the closure. Per an earlier news item the workers will be receiving $278 million severance payout, job assistance for several years, and other services in their overall package. While the ultimate goal would have been to keep the plant open, the decision to close and the actions by Toyota management to offer a severance payout ranging by some reports from $21k to $68k is very generous by any standard used by any company in it's releasing of some 4,600 employees.

By comparison many larger organizations I have been released from offer very little severance in today's economic climate or do what I call the "consulting switch" whereby they "release" employees from their permanent positions to consulting partners for the same salaries but with consequently different benefits, business processes, culture, and far longer working hours. 

As a company, Toyota could have offered a very minimal payout and assistance. Heck a lot of other companies in their position would have. However while there have been some intense feelings on all sides about the closure, many of the workers being let go hold their heads high, are proud of their work, and in also hold their employer Toyota in high regard. This is something Toyota has embraced as a core company value which is to make their employees feel like valuable contributing members of the company. Even when faced with the plant closure, Toyota's actions as reflected in the process of the closure and the severance package offered to the plant workers demonstrates the company's commitment to their core value.

It is this commitment, in this case to the core value to it's employees, that defines a company. Toyota has faced tremendous challenges on numerous fronts and while not necessarily handling it in the best way in hindsight, they certainly could have done much worse. 

I use Toyota and several other outstanding companies in a number of ways to illustrate exactly how leading organizations with excellent cultures stand by their values through thick and thin, and follow through with actions. So many organizations do so much less to their employees. In these trying times, it is nice to see that some companies do not compromise their core beliefs no matter what the bottom line or "bean counters in accounting" say. Hopefully more companies and their leaders can learn from this example.