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A Modern Parable -- Corporate America

avidhunter

New Member
A Modern Parable.

A Japanese company ( Toyota ) and an American company (General Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the "Rowing Team Quality First Program," with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India.

Sadly, The End.

Sad, but oh so true! Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages. Toyota has spent the last thirty years building more than a dozen plants inside the US The last quarter's results: Toyota makes 4 billion in profits while Ford racked up 9 billion in losses.



Ford folks are still scratching their heads!
 
this seems very true...
Not quite 100% sure about what I am going to say here but....

I was told that Toyota has recieved incentives from the American Govt to move their plants here and that they are not required to offer retirement programs to their employees.

I am not sure if this is 100% accurate but someone should look into it.

If this is true it could make sense as to why they are showing so much profit.
 
I don't know about the Gov't incentives, but I can guess the reason they are profitting and the big 3 aren't is that Toyota and Honda aren't slaves to the auto union.
 
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I don't know about the Gov't incentives, but I can guess the reason they are profitting and the big 3 aren't is that Toyota and Honda aren't slaves to the auto union.

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True. But I think it just comes down to that Toyota and Honda build damb good vehicals. I was always a GM guy but my last 2 or 3 GM cars really soured me. Maybe some day if American based companies build a reliable car I will switch back.
 
I was a parts manager for a Lexus dealer(div.of Toyota) for 11 yrs.and if they ever had a problem,which was very few,They would have a recall and have the problem fixed ASAP.We were also a GM dealership and shared the same parts dept.and would see the same problems year after year.Part of our pay was commission and the guy that sat by me was selling engines and transmissions all day long and I was selling oil filters and tune-up parts.Not as much money in the paycheck selling maintenence parts.
 
I feel as though I have some understanding of what differentiates Toyota v. others, although I am sure there are many other factors that I do not know about too. Toyota "invented", or at least popularized, a method of manufacturing that goes way beyond how nuts and bolts are applied to cars on the way down the assembly line. Their entire organization is "wired" and behaves differently than most traditional US companies and in particular, staid, "we're the best in the world, we've always done it this way..." companies. The entire organization is taught how to recognize and eliminate waste through lean manufacturing techniques and so forth, they are extremely diligent in pursuing improvements relentlessly and are much more customer focused and quality minded than many other companies.

That they have now surpassed GM and Ford as the largest automakers is something that has been coming for years, even decades. Their success is not the result of some recent "program of the year" or any other type of management fad, rather, it is a product of completely different corporate culture and way of doing things, something they have been building for years.

Case in point anecdotes... I bought a new GM car in 2001 and there were at least three things wrong with it "out of the box" right off the dealer floor, not major things mind you, but things that were clearly built wrong and/or not fixed prior to shipping. We bought a Toyota van new in 2005 and there wasn't a flaw on it that I ever came across until I backed into one night with the trailer!
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I would prefer to buy American, so to speak, but I am pretty sure my next auto purchase will be a Toyota.
 
Daver

The company I work for is going throught lean manufacturing now. I think it's a good program but I'm not sure how far up the ladder the lean theory runs. My company is huge (80,000 world wide employees) and it moves at the speed of cold mud with change. Throw in the money factor and I can see this lean process taking many many years. Sometimes I think they need to start lean from the top down.
 
All I know is all this lean manufacturing is making my pockets lean.

I liked it a lot better when GM was running FAT AND LAZY throwing money at problems.

Toyota is getting a lot of tooling built overseas...

Designing and building molds for good ol' John Deere right now.
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Moose - I hear you... one of the points I was trying to bring out is that Toyota has been doing "lean" for arguably about 40 years now, as opposed to so many US companies that just now are "starting" to use these principles.

Every company DOES need to start out at the top, but many do not. It is truly a cultural thing and the culture of a company comes from the leadership. It is terribly hard to bring about culture change from a mid or low level position in a company because sooner or later you will get trumped when the upper level does not agree. The lean theory, properly done, should START at the top, it's just that it so often doesn't in real life. Toyota on the other hand, with many, many years of ingraining this culture and building skills and experience is way ahead of most of its' competitors and it is showing in their profits, their products and their customer satisfaction levels, etc.
 
Toyota = (TOY)! If they ever build a real truck i might look at one but until then i will stick with GM. I will say they do seem to be getting closer on there car and trucks. They don't seem to be the tin cans they use to be.
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I have owned only GM trucks also,and have a buddy that just bought the new body style chevy and really like it over his 05 chevy truck.I will look at the new style chevy truck,but will also look at the new Toyota Tundra.
 
I think the American companies need to focus more on building a better quality vehicle rather than changing the body styles every couple years or trying to come out with crazy new designs all the time. I drive american myself but I always buy my wife Honda or Toyota because I don't want her stranded somewhere. Plus it pisses me off that if you buy a new GM or ford car, it's only worth half as much in a couple years.
 
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Toyota = (TOY)! If they ever build a real truck i might look at one but until then i will stick with GM

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Blaster. Apparently you havn't looked at the new Tundra in real life.
 
Let me start by saying that I have been in the car business since 1977 and have seen a lot of changes over those years. There a lot of factors here that most of you either don't know or understand. I won't say that there was at one time a diffinite reliability gap between Japaneese cars and Amercian built cars. Over the last 20 years as more plants have been added here in ther US that gap has narrowed and in many cases dissapeared. Most of the problem comes from perception. Using Toyota as an example, they tells us that their cars are better so we believe it because many years ago they were better. What they don't tell you is that even though their repairs are fewer those repairs cost twice as much. Toyota has fostered and promoted their reliablity very well and we are believing it and paying more money for the cars becasue of it even though that reliablity can't be proven today. The failure rates that they report aren't just based on US production but rather world production. Plants in either Japan or some of the other countries work on a much stricter enviroment and production quality than in the US so that all those statics aren't what they seem. As more of these cars are built here more reliability problems come up along with the associated recalls. We have to understand that the same type of Amercian employees build Fords, Chevys, or Toyotas, with the main difference being that the design companies are Japaneese rather than Amercian. Every single time you ditch Amercian made cars you are saying that your fellow Amercian workers aren't as good, or smart, or care about what they do as the same workers that work in the Toyota plants. Do you really think that is TRUE?

Another thing that is a huge burden to the Amercian car companies is their employee benifits. Currently Ford pays more retired and unemployeed people benifits than they do regular full employees. Why, because that is all part of the union contracts that were negoiated over the years. They pay retirement, medical, legal and many other kinds of things for all the retired workers. Toyota doesn't, partly because they haven't been in the Amercian labor force for nearly as long. Also most of the parts are made out of country and shipped here just for assembly so they supply far fewer Amercian jobs and there for Amercian pay checks per car sold than Ford or Chevy.

One last thing Double Drop Tines, you might be the nicest guy in the world and the one guy that I would pick to marry my daughter, but if you worked for me in a Chevy store and chose to purchase a Toyota I would probably find a reason to ask you to go work for a Toyota store. I think it a slap in the face to your employer and the GM customers you serve everyday to not drive the product that feeds you and your family. People will probably say that it is a free country and that you can drive anything you want, but I think that if you accept a paycheck from your store that you owe them loyalty and should drive the product that you expect others to buy and drive so that you can continue to get that paycheck. I know that I am old fashioned but that seems the most disrespectful thing, to use that paycheck to make a payment to Toyota when they are doing every thing they can to put your dealership out of business and make you unemployeed.
 
Hey Bowmaker

I agree with you 100% about the US blue collar workers assemebling the cars and trucks. The problem with the big three is a bit farther up the ladder IMO. Cost cutting decisions with cheap materials and poor designs in favor of slick ads and marketing was bound to catch up with them sooner or later. I had my 99 Camry in the body shop getting a new fender put on and we had a 02 Sedan Deville as a loaner. Although I don't know what kind of life that Caddy has had I know I wouldn't have traded my car for that one. And it had 30K less miles. I thought the dash was gonna fall in my lap when we went over a bump. I should make it clear I wish no bad luck on any of the big three. It's not good for the US if they do poor or fail. But for me to ever buy a chevy or Pontiac again they will have to have a much longer track record with reliability and customer satisfaction than they have right now.
 
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Over the last 20 years as more plants have been added here in ther US that gap has narrowed and in many cases dissapeared. Most of the problem comes from perception.

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I have to disagree with this statement. I have been an ASE certified master technician for many years now. I work for an independent shop that services all makes/models. Where I live, 2/3 of the cars on the road are imports, yet 80% of our business is domestic. I'm sorry, but there is still a HUGE gap in quality between Japan and US auto makers. The majority of the domestic cars I work on have realitivly low miles and are already experiencing major problems, compared to almost no problems on a Jap car with the same milage. You would be shocked to see how many Accords we have in the shop pushing 300,000 miles and still running like a champ.

And as far as cost of repair goes, that is where the gap is narrowing. How many years in a row can the big 3 continue to put parts on cars that they know have had severe failure rates before they make changes? The answer to this is still undecided because in many instances it has gone on for 10+ years without correction.

I own a Honda Accord with 160,000 miles and a Dodge Dakota with 75,000. If I am going on a trip of any considerable distance, I take the Honda because I know it will get me there and back, which is more than I can say for the Dodge.

None of what I have said is a knock on the people assembling the cars. It is a knock on the quality that each manufacturer chooses to put into their car line.
 
It's too bad some of you have had some lemons.

Ford F150 90% US/Canadian
Chevy Silverado 90% US/Canadian
Toyota Tundra 75% US/Canadian
Dodge Ran 72% US/Canadian

Add to that the white collar work which is mostly US/Canada and where do they spend their dough? I have 206,000 miles on one of the vehicles in my yard. 117,000 on another and they have not had troubles. Routine maintenance only. I'll stick with my US born, owned and made vehicles because they are tested and proven. Nothing against the others, just haven't had a reason to consider them yet.
 
BTW, Toyota is NOT a Japanese company, just as Ford is NOT an American company. Both are traded/owned globally. I own stock in Toyota, and odds are so do you - if you read the list of securities your mutual funds include
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The problem with GM and others is very much what the "Modern Parable" addressed. The workers are virtually the same at every plant in the US. The differences lie in the engineering, design, manufacturing processes, and quality of parts, NOT in the labor used to assemble/repair them.

The difference in stock price is a result of more people buying Toyotas, plain and simple. How long has it taken GM/Ford to come out with a more fuel efficient automobile? Toyota has been making them since 1997. People want fuel efficiency, not necessarily because they want to "hug a tree", but more likely because they want to make ends meet. I completely agree that GM/Ford (traditional US auto manufacturers) have been in the death grip of short sighted management, too consumed with giving themselves executive bonuses, as well as being in the stranglehold of Auto Unions.
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