[DeTomaso] allowing Detroit to fail

[Charles McCall]

a) Thanks to all involved for keeping this debate friendly. I'm surprised
that there hasn't been more name calling considering the emotional nature of
the issue, and the pro-and contra Union positions. It's been interesting to
read despite the complete lack of DeTomaso content. It will only remain
interesting as long as people remain civil. 

b) There are some fundamental differences between the American and Japanese
production systems. I make my living implementing the so-called "Toyota
Production System" in a number of sectors. Why have other companies copied
them? Because it works. Because the Japanese lead the world year after year
in quality (it's not opinion, it's a matter of statistics. Happy to provide
them to those interested). Quality in this instance being defined as "lack
of defects as detected by the customer" as opposed to luxury. The cheapest
Toyota in production can be higher quality than a Mercedes costing 10x. 

c) In the 80's, Porsche had serious financial problems. One third of the
manhours required to assemble a Porsche was use to debug the car - find the
defects that had been created during the assembly process and repair them.
It's a long story, but they hired the Japanese to help turn them around.
With the Germans (and especially Porsche's) reputation for pride, you can
imagine how difficult it was for them to ask for Toyota to come help them
build cars. But Porsche has been one of the most profitable companies for
years, and one of the leading consultants in Lean Manufacturing in Germany
is Porsche. The first step in the implementation in Porsche was for the
company president to put on a set of overalls, grab a die grinder, and cut a
set of warehouse stands in half to reduce available storage space. Long
story, but the objective was to get management out of the office and onto
the shop floor, which is where value is created in the company. 

d) Traditional "quality" marques like Mercedes, Audi, and BMW have spent
years selling expensive cars that have many more defects than Toyota. The
extra cost is partially due to having a small army of people at the end of
the production line correcting mistakes instead of using this army to find
and abolish waste in the production process. 

e) You can put up trade barriers if you wish, but that is short sighted. If
your response to the competition producing a superior product is to bury
your head in the sand and pretend they don't exist, you have no motivation
to improve your own operations. Toyota has built profitable plants in the US
- the problem isn't the workforce it is the management system. 

f) In closing, nature likes balance. So do companies. If one side of the
equation - labor or management - is too strong then the company suffers. If
labor is too strong and inflexible and the company is not free to do what it
needs to do to survive and be competitive, then it cannot continue. If
management exploits its workforce and doesn't look for a win-win situation,
it will not have a qualified workforce, nor will it unlock the true
potential it may offer due to continous conflict. One of my favorite books
of all time, GOOD TO GREAT, analyses various sets of companies to identify
why certain companies in the same sector have varying results. 100% of the
companies that have substainable, long-term outstanding results have
management that is genuinely interested in the company and not personal
profit or fame. It's a fantastic book, and highly recommended. There are
huge, multinationals that are good places to work. Their employees are
happy, absenteeism is low, morale is high, and the company prospers. The
book points out that those are rare, however. 

-----Mensaje original-----
De: detomaso-bounces at realbig.com [mailto:detomaso-bounces at realbig.com] En
nombre de Rick Moseley
Enviado el: miércoles, 10 de diciembre de 2008 18:01
Para: detomaso at realbig.com
Asunto: Re: [DeTomaso] allowing Detroit to fail

A Modern Parable.

A Japanese company ( Toyota ) and an American company (Ford 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 7 people steering and 2 people 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, 2 area steering superintendents and 1
assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people
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
rowers. There was discussion of getting new paddles, canoes and other
equipment, extra vacation days for practices and bonuses. The pension
program was trimmed to 'equal the competition' and some of the resultant
savings were channeled into morale boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid-off one rower, halted development
of a new canoe, sold all the paddles, and canceled all capital investments
for new equipment. The money saved was distributed to the Senior Executives
as bonuses. 

The next year, try as he might, the lone designated rower was unable to even
finish the race (having no paddles,) so he was laid off for unacceptable
performance, all canoe equipment was sold and the next year's racing team
was out-sourced to India.

Sadly, the End.

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, and collecting bonuses... 

IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY
 
 
 
But don't worry we [the tax payer] we will bail them out so we can continue
their mediocrity....

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