Madison County member Sean Naylor speaks at the Workers' Rights Board

Good afternoon, ladies and gentlemen. My name is Sean Patrick Naylor and I am here to represent the nonprofit organization Kentuckians for the Commonwealth. KFTC is a 26-year-old grassroots organization with over 4000 members statewide working for a better quality of life for all Kentuckians. KFTC fights for social, economic, and environmental justice through member education and civic action. KFTC is the avenue by which its members voice concerns, hold elected officials accountable and participate in the policy process. I am also here as a concerned private citizen, as a helicopter mechanic for twenty one years empathetic to the needs of others in manufacturing, and as a budding policy analyst studying at the Martin School of Public Policy and Administration at the University of Kentucky.

I am here today to express our concern related to the plan by Toyota management to reduce labor costs by focusing on headcount, wages and benefits. The goal, as stated in the company memo by the President of Toyota Engineering and Manufacturing of America Mr. Sudo, is to reduce wages and benefits to the prevalent manufacturing wages in the area, and to not link its wages and benefits to the U.S. auto industry. Not only would this affect the employees of Toyota here in Kentucky, but by removing competitive pressure within the labor market, this could also have the affect of lower the quality of life for many other manufacturing employees in the region.

We feel that Toyota has a responsibility to improve the quality of life for manufacturing employees here in the state of Kentucky. Although we would like for this responsibility to be born simply out of corporate morality, it is actually more a matter of fiscal responsibility. Toyota has been the recipient of more than $420 million in incentives. This includes tax subsidies, land and facilities, purchased, built, and improved through grants and government bonds, and other benefits provided by the state.

The State of Kentucky provided these incentives with the belief that Toyota would provide good jobs that would improve the quality of life for all Kentuckians. We look to Toyota to improve the standards of local manufacturing wages and benefits, not to water down its wages and benefits to local manufacturing standards. It is hard to imagine Kentuckians agreeing to the use of so much of its public funds to continue subsidizing an employer intent upon lowering the quality of life for so many.

Manufacturing employees at Toyota contribute to the continued success of Toyota products on the automotive market here in the U.S. as well as worldwide. Toyota profits are up while they increase their market share. Employees contribute to this success through improvements in quality and efficiencies. An example of such improvements is a minor change made to the Camry assembly line, changing the point in the process at which a radiator support bar was installed, improving the access to install the engine. Such employee input shows commitment to Toyota. Now Toyota must show commitment to its employees.

We recognize that Toyota has provided for the local community through payments to the Scott County school system. But these payments have been made in lieu of paying taxes. Through this arrangement, Toyota is able to exert some control over the local school system, and the state has lost the ability to decide what is done with the more than $27 million that has been paid. It is easy to feel good about the benefits to the Scott County school system, but this is an irresponsible use of public funds.

We also recognize that the government bonds will this year be paid for through lease payments made by Toyota to the state government. But a state’s ability to sell bonds is limited, and the provision of land and facilities to Toyota through the sale of bonds tied up funds that may have been used elsewhere.

While we do not resent the incentives provided, Toyota must recognize that they have an obligation to the community. Revenue not collected due to these incentives is not available for other state needs, such as education, health care and public safety. Kentuckians expect a return for their investment, and that return is an improved quality of life.

The community here in Kentucky has made a commitment to Toyota, providing incentives and a good labor force. We should have the right to expect Toyota to continue its commitment to provide jobs with good wages and benefits, wages and benefits that improve the quality of life for all Kentuckians. Toyota has a responsibility to the State of Kentucky, a responsibility to provide the quality of life for which we have paid through the incentives provided.