Then there's Toyota's North American manufacturing headquarters in Erlanger, Ky., north of I-64. Opened in 1996, the $53 million, 700-employee headquarters is already expanding.

Cluster Boosts Efficiencies
Those I-64 locations form a critical cluster in Toyota's U.S. designs.

"Undoubtedly, Indiana, Kentucky and West Virginia will be Toyota's U.S. production base," says Toyota President Fujio Cho, who for six years ran Toyota's U.S. production. "Those plants are very close, so they can help each other or compete, inspire each other."

The cluster's closeness fosters strong interaction, Copenhaver says. "The Indiana, Kentucky and West Virginia plant managers formally get together monthly in Erlanger," he explains. "And with Toyota's very open communications system, the plants have ongoing self-initiated communications. We're always looking to see how things worked in other plants so we don't reinvent the wheel. Everyone has been very open in sharing."

Clustering also minimized TMMWV's need for nearby engine component suppliers.

"A lot of suppliers that moved to Kentucky to support the engine plant that started in 1992 just expanded to supply us when our facility came online," Copenhaver explains. "And we're not necessarily a big enough customer to merit major investments coming to supply us. We do have a lot of local West Virginia suppliers for a lot of other things, but not engine components."

TMMWV also demonstrates the increasing reliance on U.S.-made parts, which make up some 65 percent of TMMWV-made engines, Copenhaver estimates. Toyota's domestic sourcing curve will start anew, though, when the West Virginia automatic transmission plant comes online in the spring of 2001. "Since Japan's the only place Toyota's ever made automatic transmissions, all the parts will initially come from there," he says. "Then, like the other engines, some of the components will likely be sourced out."

The Small Town Strategy
The I-64 cluster also illustrates Toyota's preference for small town locations. It's a long, long way, figuratively and literally, from Detroit to places like Buffalo, W.Va., Georgetown, Ky. (pop. 12,000), and Princeton, Ind. (pop. 8,200), prompting considerable conjecture about Toyota's strategy. But there's nothing unique about Toyota's southward drift, a pattern increasingly dominating auto site selection. Currently, 37.4 percent of the 12 million U.S.-made cars and trucks are manufactured in the South, reports Lansing, Mich.-based CSM Forecasting; by 2005, Southern plants will make 42 percent, CSM projects.

Many of the South's location pluses are widely known -- generally lower wages and strong right-to-work sentiments, for example. Says Trevor Bain, director of the University of Alabama's Human Resources Institute, "When auto plants locate far from the UAW's traditional roots, that increases the odds of winning an organizing vote."

Copenhaver, however, sees something else driving Toyota's small town migration.

"Personally, I don't think Toyota's picked smaller towns just to be the employer of choice, but because those areas offer the large acreage needed for major manufacturing," he says. "Areas with a rural, agriculturally rooted culture also have very strong family ties, a closeness that produces a strong work ethic. It's the same reason, attracting the best people, that brought the textile industry to the South." Indeed, that's the same strategy reflected in Toyota's origins.

Eager to escape Tokyo's urban bustle, founding father Kiichiro Toyoda in 1930 sold part of his textile business to buy farmland near the small town of Koromo in central Japan (later renamed Toyota City). "Toyota's ideology is rooted in a rural feudal culture," says Michael Maccoby, a prominent Japan scholar and business consultant. "Workers were typically farm boys parents brought to the factory."

Clustering is also a central feature around the Toyota City headquarters, which epicenters a network of 12 manufacturing plants and supplier facilities located within a 20-mile (32-km.) radius. Seventy-five percent of adults living in that area work either for Toyota or a supplier.

Maximizing JIT
The physical proximity of the small town U.S. cluster also maximizes the efficiencies of the just-in-time (JIT) system that Toyota is credited with perfecting.

"With JIT, we keep enough inventory to last a shift and a half," Copenhaver says.

To support its heralded JIT modus operandi, Toyota has precision-tuned its logistics system. Unlike most U.S. automakers, Toyota rejected hiring an independent firm to transport parts. Instead, Toyota meticulously manages the flow to meet razor-thin lead times. Routes, for example, are carefully plotted to pick up parts from several suppliers in a single trip, and trucks returning to supplier plants are filled with recyclable packaging.

Ironically, the JIT system that's helping fuel Toyota's success in the huge U.S. market sprang from the Japanese market's limits in the 1930s. Toyota hit a major roadblock in adapting Henry Ford's mass production methods: The then-miniscule Japanese market's small production volumes meant manufacturers couldn't afford to maintain surplus inventories. JIT was the only way to cope.

JIT and logistics alone, though, can't explain Toyota's continued success. There's something more at play here, something almost metaphysical.

Haruo Shimada, a labor economics expert at Japan's Keio University, even calls Toyota's system "humanware" -- an adroit mix of management style, worker participation, incentives and technology that maximizes motivation, productivity and personal development.

"With Toyota's system, we've been able to get started very quickly," Copenhaver says. "We haven't even been in production a year, and we're already making 1,000 engines a day."

The Productivity Push
Copenhaver attributes TMMWV's fast start to crackerjack training, "plus people who think well, with an unbelievable work ethic and great enthusiasm." Of TMMWV's line workers, 98 percent are West Virginians. But Toyota also imported a core of expertise to implement its celebrated system.

"We have 16 Japanese on staff full-time," Copenhaver says. "Most of them are here for three years and then rotate back to Japan. We also have a lot of short-term support from Japan for very intense on-the-job training."

TMMWV's success, though, is hardly atypical. That's underscored by 1999's edition of the highly regarded Harbour Report on North American Automakers. GM, for example, would've saved a staggering $4.9 billion, says the '99 Harbour Report, if its 1994-98 labor productivity had matched Toyota's, which Harbour & Associates (www.harbourinc.com) President Ron Harbour calls "truly remarkable."

Copenhaver feels much of Toyota's productivity magic lies in a collaborative style light years beyond many firms' lip-service exercises.

"Consensus has been Toyota's style forever, and it's a big part of what we do here," he says. "We have a lot of meetings to reach consensus on what we want to do, whether it's a new program, a new benefit or whatever.

"Everyone is made to feel their ideas matter," he continues. "There's a Japanese word in the Toyota system: jidoka, which means all team members are expected to stop work when problems arise. In some plants, you'd get yelled at for stopping the line to prevent producing defective parts. Toyota expects it."

Do they ever. Several years ago, a defective part (the first in 60,000 pieces) at Toyota's Bodine Aluminum plant in Troy, Mo., prompted an eight-hour staff meeting.

Toyota's consensual style extends to office space. Each of TMMWV's 78 front-office personnel has a seven-by-seven-ft. (2.1-by-2.1-m.) cubicle. "It's the same in all of Toyota's plants in Japan, and it's just great for promoting communication," says Copenhaver.

Strong Community Support
Toyota has also gained a strong consensual partner in the surrounding community, says Copenhaver, who particularly praises the West Virginia Development Office (WVDO at www.wvdo.org). "They've been just great," he enthuses. "They've done everything they said they'd do and when they said they'd do it."

Lavish incentives, though, weren't a major location factor, says Steve Spence, WVDO international division director.

"We didn't offer anything special," Spence explains. State incentives included standard tax credits, and the state took applications, he says, when TMMWV was deluged with job seekers "as we frequently do for major operations. Our biggest incentives were in getting the site ready, and providing training incentives." Planned Putnam County infrastructure improvements were also expedited, he adds.

"West Virginia's long positive relationship with Toyota was a major plus," Spence asserts. That relationship began in 1990, when West Virginia made headlines by establishing the first U.S. state office not in Tokyo, but in Nagoya, an industrial city of some 2 million near Toyota's headquarters.

Toyota officials later visited West Virginia, which was a major contender for the truck plant that went to Indiana in 1995. Toyota officials, however, said they wanted to continue their relationship with the WVDO, Spence says. Within a year, Toyota's West Virginia expansion fireworks were under way.

"It's the biggest international investment in West Virginia's history," says Spence. "And it's been a wonderfully positive experience, because there's no better corporate citizen than Toyota" (which has already donated more than $1.2 million to community programs).

The experience, says Copenhaver, has been equally positive for Toyota, one of 17 Japanese firms locating in West Virginia since 1990.

"One of the big things Toyota liked, people's openness, supportiveness and warmth, hasn't changed," he says. "Having worked in West Virginia before, it made me feel pretty proud to see everyone perform with the same enthusiasm after we got here. And I've sure seen that not happen."

Parallel Universes Meet
Copenhaver is uniquely qualified to assess community responsiveness. The 52-year-old previously spent 25 years in economic development, where he often seemed to be running on a parallel track with Toyota.

As West Virginia Roundtable president, in fact, Copenhaver even showed TMMWV's site to prospects. "This property, which American Electric Power used to own and has all the right ingredients for a plant site, was in the state portfolio," he says.

That prospect didn't bite. Similarly, while in economic development in South Carolina, Copenhaver unsuccessfully tried to recruit the Toyota plant that landed in Georgetown. And a later economic development assignment took Copenhaver to Lexington, Ky., only 12 miles (19 km.) from Georgetown. Toyota and Copenhaver's parallel universes met in 1996.

"I was in economic development in North Carolina, and I was in New Orleans at the World Congress for the International Development Research Council (IDRC). I got a call from a headhunter for Toyota. I still have no idea how he got my name."