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Deep inside Toyota's car factory in Georgetown, Kentucky, is the paint shop, where naked steel car bodies arrive to receive layers of coatings and colors before returning to the assembly line to have their interiors and engines installed. Every day, 2,000 Camrys, Avalons, and Solaras glide in to be painted one of a dozen colors by carefully programmed robots.

Georgetown's paint shop is vast and crowded, but in two places there are wide areas of open concrete floor, each the size of a basketball court. The story of how that floor space came to be cleared--tons of equipment dismantled and removed--is really the story of how Toyota has reshaped the U.S. car market.

It's the story of Toyota's genius: an insatiable competitiveness that would seem un-American were it not for all the Americans making it happen. Toyota's competitiveness is quiet, internal, self-critical. It is rooted in an institutional obsession with improvement that Toyota manages to instill in each one of its workers, a pervasive lack of complacency with whatever was accomplished yesterday.

The result is a startling contrast to the car business. At a time when the traditional Big Three are struggling, Toyota is thriving. Just this year, Ford and GM have terminated 46,000 North American employees. Together, they have announced the closing of 26 North American factories over the next five years. Toyota has never closed a North American factory; it will open a new one in Texas this fall and another in Ontario in 2008. Detroit isn't being bested by imports: 60% of the cars Toyota sells in North America are made here.

Toyota doesn't have corporate convulsions, and it never has. It restructures a little bit every work shift. That's what the open space in the Georgetown paint shop is all about.

Chad Buckner helped clear the space. Buckner, 35, has a soft Southern accent and an air of helpfulness. He is an engineering manager in the painting department, where he arrived straight out of the University of Kentucky 13 years ago. His whole career has been spent at Toyota.

As recently as 2004, a car body spent 10 hours in painting. Robots did much of the work, then as now, but they were supplied with paint through long hoses from storage tanks. "If we were painting a car red, before we could paint the next car white, we had to stop, flush the red paint out of the lines and the applicator tip, and reload the next color," Buckner says. Georgetown literally threw away 30% of the pricey car paint it bought, cleaning it out of equipment and supply hoses when switching colors.

Now, each painting robot, eight per car, selects a paint cylinder the size of a large water bottle. A whirling disk at the end of the robot arm flings out a mist of top-coat paint. When a car is painted--it takes just seconds--the paint cartridge is set back down, and a freshly filled cartridge is selected by each robot.

No hoses need to be flushed. There is no cleaning between cars. All the paint is in the cartridges, which are refilled automatically from reservoirs. Cars don't need to be batched by color--a system that saved paint but caused constant delays. Cars now spend 8 hours in paint, instead of 10. The paint shop at any moment holds 25% fewer cars than it used to. Wasted paint? Practically zero. What used to require 100 gallons now takes 70.