Toyota South Africa (TSAM) announced that it’s slowly getting back on its feet after intense floods damaged its Prospecton plant in April, but that 88% of the production vehicles that were on site at the time will be written off.
The manufacturer has already resumed operations on catalytic converter exports, and in a few days, it will also restart the Hino assembly line.
“This has been a tremendous setback for the company, but we have extensive insurance coverage,” said TSAM president and CEO Andrew Kirby.
“We are also fortunate that our parent company Toyota Motor Corporation is supporting with all the cashflow challenges that we are likely to encounter.”
Road to recovery
Kirby said 60 top specialists made their way from Japan to South Africa to assist TSAM in recovering the plant.
Currently, TSAM has already performed the processes of cleaning, drying, and flushing the flooded equipment – and the next steps are to power up control panels, check the equipment for damages, and make the necessary repairs or replacements.
“As previously mentioned, the facility’s flood-protection measures were effective up to a point and will be reinstated and enhanced even further,” said TSAM.
“TSAM is also working closely with the City of eThekwini to address some of the infrastructural shortfalls in the area to prevent a reoccurrence of a similar disaster in the future.”
When it comes to the water-damaged vehicles, TSAM said it will be able to sell 500 completely built-up units – or 12% of the production vehicles on site at the time – that didn’t receive any water damage.
Unfortunately, however, 4,596 production vehicles received irreparable damage and will be “scrapped and crushed so that no potentially compromised Toyotas will ever make it into the retail chain,” said TSAM.
The automaker said it will “take some time” for local assembly lines of the Hilux, Fortuner, Hiace, Corolla Cross, and Corolla Quest to reopen, but that it’s constantly in contact with customers whose deliveries have been delayed to make sure they are aware of what’s happening.
TSAM said it will likely lose 45,000 production units due to the suspended operations, which according to MoneyWeb, is expected to last for around 12 weeks.
“With regards to CBUs (Completely Built-Up models), it’s business as usual – in fact, we have been able to negotiate additional supply despite global shortages. So, we will have extra units to compensate for the temporary lack of availability on locally-built models,” said TSAM.
To ensure that its employees are also well taken care of, the company is paying 50% of wages to qualifying employees during the downtime when there is no work and stated that none of them will lose their jobs.
To improve staff earnings during this time, TSAM is bringing in workers on a rotational basis to assist in clean-up and restoration activities, for which they are paid.
Employees who volunteer to provide community support also receive remuneration from TSAM for their efforts, and the company is providing its staff and on-site contractors with 10-litres of bottled water per week.
Additionally, TSAM is working with the government to provide temporary relief measures for employees such as UIF benefits, and it requested financial institutions with whom employees have loans for a three-month payment holiday, and many have already obliged.
Toyota further partnered with other corporations and the Gift of the Givers to assist communities, with the value spent to date on these initiatives totaling R1.5 million, it said.
“We’ve created an internal slogan for our recovery called Rebuilding Better Together,” said Kirby.
“This talks to how we all work together as one team to find a way of renewing and improving our site at the same time.”