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 r owing.
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 and a certificate of completion 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 (a reduction in workforce) 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 Executive s as bonuses and the next year's racing team was "out-sourced" to India... Sadly, the End.
However, 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.
Fiscal 2006 results: Toyota makes $11 billion in profits while Ford racked up $12.6 billion in losses. Ford folks are still scratching their heads.
IF THIS WASN'T SO SAD IT MIGHT BE FUNNY!
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Comments: 22
The company I just quit (retired from if you can call a $229 per month check retirement) has the same basic problem. A management team decided to give employee bonuses at the end of the year if an employee scored a 100% evaluation. They announced the plan in the company news letter. Later they passed a secret memo that no manager was allowed to give a 100% because no one was perfect.
The company board was forced to issue 7 checks before he was satisfied. I wonder if he got a 100% on his evaluation?
Either wage for assembly line workers, seems high, but if you are selling product and growing, what's the problem?
Sue. Costco's CEO probably does not need a huge bribe like that because he does not have to sell out his employees and his country. Three cheers for Costco.
It is true that GM/Ford have more economic load because their pension plans and the number of retired workers they have made promises to, but even with that I think it shows that they mismanaged their money, or they would have the cash to carry out their promises.
What is certain though is that the products management chooses to make have so much less appeal to Americans that we are not buying them. The phrase "The Big # Automakers" has disappeared. In my opinion this is due to management incompetence, not worker cost.
That said I cannot really agree with Sheryl that they should blindly build cars that they do not understand of are not sure there is a market for. Perhaps they are just incompetent in terms of the modern world, design process, technology - stuck in the past. There are some good ideas, like the Chevy Volt, but who knows when that will ever see the light of day?
It is also true that with costs what they are for Americans manufacturers, due to mismanagement of money and investments, when they do not have the cash, they cannot be so bold and innovative with the risks either.
If that is true, you can blame the auto producers for not diversifying, getting caught with their pants down, or it may be a ploy to buy up these companies on the cheap, by the Saudis say ... after all Saudi influence under the guidance of Henry Kissinger, and other lobbying firms, Carlyle, etc, have passed legislation to make it a crime to reveal the extent and investments Saudis have in the US. Odd huh?
Believe me, me too, but I am not a typical idiot American consumer
with something to prove to my neighbors. And actually the technology
has been there, in the sense of the ideas, but even now it is not
certain that Toyota can build a Plug-in Hybrid electric because of the
charge characteristics of the batteries they are using. Turns out
that they Nicads (I think) they use in the Prius are performing better
than expected, but I am waiting for the pluggable electric, and it is
a different technology because they need batteries that can go through
a "deep-charge" cycle, apparently, if they are to be believed and hold
up many years of that charge-discharge duty-cycle.
I will buy one when they come out, but right not you pay extra that you
do not get back in the life of the car to do the right thing.
http://www.nytimes.com/2007/07/21/business/21auto.html?ei=5070&en=5f89471d93d9068d&ex=1186027200&adxnnl=1&adxnnlx=1185854770-0mM8cobePfh/wDPP2SDBFw&pagewanted=print
Rather than reprint the whole story here, here are the relevant paragraphs:
"Chrysler, which fell behind the Japanese carmaker Toyota last year to rank as the fourth-largest seller of vehicles in the United States, says it pays nearly $30 an hour more for labor than Japanese automakers do. Including pensions, health care and other benefits, each U.A.W. worker is compensated more than $70 an hour.
Labor costs for Toyota, Honda and Nissan in the United States are less than $50 an hour."
By the way, you have one of the most eerie and bizarre icons ... it's pretty cool.
In 1982, the Toyota Motor Company and Toyota Motor Sales merged into one company, the Toyota Motor Corporation. Two years later, Toyota entered into a joint venture with GM called NUMMI, the New United Motor Manufacturing, Inc, operating an automobile manufacturing plant in credit card processing Fremont, California. The factory was an old General Motors plant that had been closed for two years. Toyota then started to establish new brands at the end of the 1980s, with the launch of their luxury division Lexus in 1989.
In the 1990s Toyota began to branch out from producing mostly compact cars by adding many larger and more luxurious vehicles to its lineup, including a full sized pickup, the T100 (and later the Tundra), several lines of SUVs, a sport version of the Camry, known as the Camry Solara, and the Scion brand, a group of several affordable, yet sporty, automobiles targeted wireless broadband specifically to young adults. Toyota also began production of the world's best selling hybrid car, the Prius, in 1997.