Toyota to Detroit: We Will Bury You

[Wes Bucey]

Most of the employee discount programs are bogus, because what they don't tell you is that dealers, by and large, won't allow you to negotiate your best deal and then take the discount. It's usually an either/or, and often you can negotiate a better deal on your own.

One of my customers was a supplier to Ford and thus entitled to a "deal" to lease or buy a new car. He opted for a Jaguar Van der Plas with every toy. He claimed his price was "dealer invoice plus $50."

(Of course that didn't take into account rebates dealers routinely receive for meeting sales quotas)

 

[chaosweary]

Looks like Toyota is becoming Americanized! To combat the quality problems they are hiring 8000 engineers :mg:

Yes, and those 8000 engineers will have to get used to horizontal process ownership versus vertical hierarchy of functional departments.

 

[Bill Pflanz]

In reading the article, the author made a very large leap from the sound business practices that Toyota was pursuing to the inference that "We Will Bury You". I would describe it as writer's hyperbole to make a point rather than a factual statement.

What has really happened to the U.S. automakers is the usual marketplace working as it should. The rest of the world lost lots of production in World War II and when it was rebuilt it was done with state of the art facilities and management practices. For a couple of decades, the U.S. automakers did not face competition except from each other and they were happy to share the market (as long as GM could be #1). When the world caught up, there was competition again.

Have you ever wondered how Toyota and Honda have been so successful with building plants and cars here in the U.S.? It has to be more than unfair practices overseas since they can do it with workers and parts from here. Maybe they do not have the same overhead for benefits and pensions but that is old news. GM and Ford have used that excuse for the last 20 years. The Japanese managed to recover from the loss of their entire production facilities in less time than that.

Bill Pflanz

 

[Randy]

Toyota (and the other Japanese companies in thier sector and other business sectors) took PDCA-CI to heart and really used it instead of just providing lip service.

 

[wmarhel]

Have you ever wondered how Toyota and Honda have been so successful with building plants and cars here in the U.S.? It has to be more than unfair practices overseas since they can do it with workers and parts from here. Maybe they do not have the same overhead for benefits and pensions but that is old news. GM and Ford have used that excuse for the last 20 years. The Japanese managed to recover from the loss of their entire production facilities in less time than that.

Bill Pflanz

How about a combination of poor management, not giving the market what it wants, and crazy salaries for mediocre performance of the executives?

Here's an article which offers some potential reasons the Big 3 just aren't keeping up: Car Connection

A few excerpts:

Factoring everything together, Harbour Report declared Nissan North America's most efficient automaker. Its plants required 28.46 hours of labor. According to analyst Harbour, that gives the Japanese manufacturer a $300- to $450-per-vehicle cost advantage over less efficient automakers.

That's down from a $1500 productivity gap between the best and the worst back in 1989, but it's still significant, the consultancy stressed. It's money that can be doled out to stockholders or, suggested Harbour, "That money can be put back into the vehicle in the form of (added) content that people will pay for."

Though there are other factors at work, those hefty givebacks pounded GM's bottom line, the automaker losing an average $2,496 on every car, truck, and crossover it sold in North America last year. Ford, meanwhile, went $590 per vehicle into the red. Only DaimlerChrysler made a profit on its products, averaging $225 each.

Honda recorded a $1215 profit per vehicle, Toyota $1587. Nissan was also the most profitable maker, on a per vehicle basis, at $2249.

Wayne

 

[Bill Pflanz]

How about a combination of poor management, not giving the market what it wants, and crazy salaries for mediocre performance of the executives? Wayne

Actually they were giving some of the market what they wanted: big SUV's and trucks with poor gas mileage. Unfortunately, the market changed and they are caught flatfooted again. Management did use poor decision making that did not consider the long term but did satisfy short term profit making. It is not only the automakers who have a disconnect between performance and salaries. U.S. executives have the highest salary to worker salary ratio in the world. Of course, if they continue on their current path, the U.S. auto executives will no longer have a business and the ratio will be zero for everyone.

Bill Pflanz

 

[Sidney Vianna]

Just heard on NPR that Ford CEO, Mr. Mullally just came back from Japan where he met with Toyota executives. Details of the meeting are sketchy, so rumours abound...

 

[Antonio Vieira]

Assuming that one of the most perfect definition of Quality, is “Customer Satisfaction”, I wonder why Toyota/Lexus is always in front of all lists those customer satisfaction indexes of car owners in Europe.
I’ve made several visits (audits/on job training) to factories of components for automotive industry. I’ve seen in almost all of them that sell parts for Toyota, that the place in the factory where they make the components for Toyota is completely separated from all the other brands. Sometimes even the owner of the factory has no control over that part of his factory – that belongs to Toyota Engineers.
What is happening with Japanese auto makers for the last 20 years, is starting to happen in Europe with South Korean auto makers lake Hyundai, and will be soon the same with Chinese cars.

 

[justncredible]

Just heard on NPR that Ford CEO, Mr. Mullally just came back from Japan where he met with Toyota executives. Details of the meeting are sketchy, so rumours abound...

True:
https://www.breitbart.com/news/2006/12/27/061227142228.b06l9tc6.html

As for 6 axis it is x,y,z,I,J,K

Toyota kicked QS/ISO standards out for being a waste.

 

[Old Quality Gal]

Interesting! I have a couple of observations that come to mind.
1.) All of the big three US companies are customers of mine as are Honda ( Marysville and Anna Ohio plants, along with BMW, Daimler Mercedes, Jaguar and Saab. They are all pretty much cookie cutter replicas of each other from a process and plant layout point of view except the two Honda plants and BMW.
The workers at the two Honda plants were resentful and grateful in seemingly equal measures. The rules had rules in the two facilities and I found myself both impressed and disturbed by some of the differences. The BMW facility here in the US had cultivated the most evolved work force I have come across in years!
2.) David Halbersham's ( Sp?) book "The Reckoning" is still a worthwhile read today even though the book is over 20 years old. It talks about squandered US chances and bad decisions in the US Auto Industry and the nothing to lose approach of the Japanese industry pulling itself into the 20th century and embracing every new tool offered to them. The section on Robert McNamara is worth the read for the insights into his management style alone. He was approached by Ford people telling him they needed to invest in larger paint drying ovens that necessitated painting the fenders separated from the body and then assembling them. The paint was chipping on the fenders then rusting at the seams resulting in unhappy customers. His reply was "Unhappy customers??? Why?? They got their split! He viewed cars as a component to get money which was the product for the "customer" the stockholder. That view is such an unhealthy short term dynamic that they have never recovered to this day.
4.) Finally our family has three vehicles two American made, a Ford and a Chrysler and an older Toyota Camry we keep and toss the keys to out of town visitors so they need not rent a car here in Florida. I would say we have spent $100 for each US car in repairs and maintenance compared to each dollar spent on the Toyota. That is the only reality that matters to most consumers.
I may buy a foreign car but I will never ride a foreign made bike. I can't see myself on anything but a Harley ever. Just a personal prejudice.
Regards,
Mary