US Auto Industry Doesn't Get It

It is a complicated problem the US will never fix. Actually, it is a simple problem and Deming predicted this demise years ago before he left for Japan in the 50s and the rest is history.

I interviewed Deming in late 80s by phone - his secretary had arranged it - from a conference he was speaking at in Vegas.

He told me what he'd been telling American managers for years.

"Managers don't get it. They need to promote those on the manufacturing floor to the highest prominence. The VP of manufacturing cannot be a finance guy or anyone other than those with direct expertise on the plant floor. Until that happens, America will always be weaker than Japan in auto manufacturing."

All these buzzwords the US has been using - Just in Time - Continuous Improvement - Zero Tolerance - and so on. These come from Japanese manufacuting concepts but in Japan, the whole concept is set up so that precision-engineered autos are made.

More but I have to go now.

Featured in the Triple Name Club.

I have seen people with the experience on the plant floor have to put up with the stupid and boneheaded decisions from the VPs of manufacuting, those with biz degrees. Never works.

Absolutely, the first thing I would do, were I an auto CEO, is assemble leaders from the various plant floors and get their input as to how to make better production leaner and better without layoffs. I'd give them a stake in the future and treat them as more important to the company than the shareholders.

It is a complicated problem Kathryn, but I think the answer is at hand.

First you have to wean the US motoring public off big gas-guzzling cars. Who really needs them? The Europeans and Japanese have managed to get along fine without them.

Cheap oil, and the expectation that oil would never run out, have driven the US market for big, inefficient cars for decades. By contrast, in Europe oil is relatively more expensive because of government taxes, so consumers demand fuel-efficient cars.

Higher oil prices, which are now a feature of life for all of us, will force US manufacturers to produce smaller cars that use less fuel. Ford and GM have subsidiary companies in other countries manufacturing more efficient, smaller engines. They should import more of those engines into the US and put them into smaller cars while they re-tool the outmoded engine plants to make smaller engines.

There are taxing measures that the US government could employ to force consumers into smaller cars, but that's a different issue. For now, higher fuel prices should provide the impetus to force US car makers to offer smaller cars.

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thanks for the information

great amount of info but the solution isn't what is done in europe. thank you for sharing this

You hit the nail on the head. They dumped all of their money into researching suv's and hardly any into smaller more efficient cars for years and now they complain because they can't sell their cars.

The true problem is one of inventory: you can't keep making 3000 of anything per month, only sell 1000 of those anythings per month and keep paying those "hard working, life long Auto Workers a decent living wage". If you didn't sell what you made, regardless of what that is SUVs or sub-compacts, you will NOT make money. Stop building -- sell inventory -- face reality. After all, how many cars / trucks / SUVs does each living American need anyways?????

They also need to make the type of cars needed in this time. Economy, and less gas guzzlers. People can no longer afford to fill the tanks of those monsters.

We also need greener cars that don't emit destructive gases. Detroit has been very slow to respond to the times.

Everything is turning into one big company owned by the same set of billionaires.

GM-Chrysler merger? That's a match made in hell!

When I was in grade school, in the early 60's, we learned about the unequal trade arrangements. The American cars were and are taxed so heavily in other countries, that they could not compete. The US did not and does not tax imported cars at a comparable rate. Of course the imported cars can be sold cheaper. Now they are being built in the US.
If grade school kids understood the situation in the 60's, why are the manufacturers and government leaders just now catching on?

I don't understand why America is shipping American jobs out of the country and inviting foreign countries to enjoy benefits not expended to American citizens.

While I would like to see more fuel efficient cars, I doubt if our aging population is going to be comfortable in tiny cars. Can we make them more efficient without sacrificing size and quality?

Charles:
I hope you're joking. Good cars in the '60s and '70s? They were rattle traps. My '65 Mustang was fast, but the doors sounded like dropping tin cans when you closed them. That's exactly why the US auto industry is in the toilet today.

Jan:
People prefer Toyotas, Hondas, even Hyundais and Kias over Fords & Chevies because they're better more efficient cars. Not because Japan taxes Fords. American auto companies are going bankrupt because their managements have adversarial relationships with their workers; they take the short view making high-profit gas guzzlers instead of innovating. They would rather pay a lobbyist to stop higher CAFE standards than a researcher to develop an electric car.

personally ...... I need a family size vehicle that does not guzzle gas .... it has to have room for four kids plus one or two of their friends, and my hubby and I ..... I think that sort of precludes the "smaller" eurpoean vehicles based on space needs .... after all, can't go to the grocery and leave half the kids at home because there is no space in the vehicle for them or the groceries ....

if the American car manufacturers would be so kind as to meet my family transportation needs and keep me from going bankrupt every time I have to put fuel into the vehicle .... then I would be happy to buy their vehicles

My all time favorite car was a Rambler 4 door. It was a 1967 model, had comfy seats, a trunk, a great radio and got 35 miles to a gallon. Really. We did not drive fast though.

K.S. interesting to read that you "need" a big car for your family. I've seen Thai families, sometimes four people riding a motorcycle together, for example Dad driving, Mom carrying a baby and a kid at the rear. Not saying that you should do this, but you might want to rethink exactly what it is that you "need" versus what you are comfortable with and what you "want."

There are countless smaller cars around on the market designed for families of five or six. In my opinion, and it is just that, anything bigger than something like that is obscene, a waste of gas and contributes directly to our foreign wars, dependence on oil and puts money into terrorists pockets.

Get rid of CAFE? Then how do we enforce fuel efficiency? Seriously, you got a real idea? Tell me. Otherwise car companies will make crappy cars that get crappy mileage and we'll keep bleeding money away in the deserts of Iraq.

And one other thing K.S.: I am in no way saying that you are not free to choose whatever car you want. But here's a question: when does freedom stop being about quantity of things in life and start being about quality of life?

US auto companies cost structure isn't helping. Bloated management structure with the usual overpaid top management, plus 30 and out with generous pensions and health coverage for union workers--with all of that the likes of GM have to seek high profit niches.

One of my friends started work at one of the big three right out of high school. He retired at 48 years old. The company will be paying pension and health care on him for probably another 30 years or more. How the heck do manufacturers with that cost structure compete in thin profit markets like small fuel-efficient cars? They can't, not with US manufactured cars. And, as I mentioned, they also have the self-inflicted wounds of a huge, bloated and overpaid management structure. Add in large amounts of debt, and you can understand why they try to push the market to high-profit items like SUVs and light trucks. They can't compete in the other markets, not with their US manufacturing.

Sean-Paul ....... actually, I NEED a vehicle that is safe, well-made, is fuel-efficient, and will hold ALL of the people in my family at one time [as stated above] ..... and still be within the law for occupancy, safety [seat belts and car seats] etc.

if the children are NOT in individual seats, I can be fined ..... if they are not buckled in with seat belts or into car seats and/or booster seats, I can be fined ........ if any of these actually happen, and I get into an accident, one or more of the children could be hurt or even killed ....... much worse than a fine ............ so, YES, I actually do NEED a vehicle with certain specifications ................. as required for safety and by law, where I live ......

I suspect that the Thai families that ride one motorcycle together ..... do so because there is no other option .... and the laws in Thailand allow this dangerous practice as acceptable, or at the least, necessary ..... hopefully, they do not get into some kind of accident ... protecting human lives is much more important than "cheap" transportation ...

the vehicle that I currently have fits my family, but it takes more fuel than I would like .... it only gets about 32 mpg on the highway, and less in the city ...... my main complaint is that the vehicles COULD be more fuel-efficient, but they are not .......... the technology is out there, but it is not being utilized properly ........

after all, WHY should the car companies create vehicles that are actually GOOD for the environment and family-friendly? .... there are no good incentives for them to do so [according to corporate greed] and the costs of re-tooling the manufacturing plants is just something that they do not want to expend until they are forced to accept the fact that people just will not buy the product they are creating ..... hopefully, because they will be purchasing a better, greener vehicle from a competitor ......

when it comes down to taking a hit on the wallet and losing sales because the car manufacturers are not producing what the population wants, THEN they MAY decide to re-tool and give the people what they want and need instead of forcing their current "stock" into the market .......... who knows .....

I really do not know why the auto industry has not gone under in the USA. These guys belong to the same country clubs in Dearborn, Grosse Point etc. As many of you know a country club mindset develops and they feed each other egos. They seem to have not learned through the years.

Sadly they have Unions that do not much more than act as greedy thugs. Wanting more but giving little including an attentive attitude.

Forbes has an article Dumb, Dumber and Hummer by Jerry Flint, 10.12.08 that addresses this so well --- "This reporter has been through these things before: Studebaker and Packard, Nash and Hudson, Kaiser and Willys. Merging two losers in the auto business does not work, but this idea is particularly terrible."

Sean Paul I am sorry to hear you are leaving gather hope your adventures in life continue to bring you worldly adventures...