Big Three: "From Kings of the Road to Roadkill"

Link is to a speech made at Hillsdale College on January 26, 2009.

Joseph B. White writes for the WSJ. I think what he says is probably the most complete and accurate synopsis of what we can expect from the mainstream media on this matter.

I'm not an expert on the matter, but I think we don't necessarily give the Big Three a fair and balanced shake. For example, White (as well as most Leansters) portrays Japanese quality as being rock solid as soon as they rolled off the boat. This simply wasn't true. Toyota themselves early on found that their engines weren't up to the endurance Americans subjected them to on our long distance highways. And I don't know about you, but the one thing that sticks out in my mind about early Toyotas are the pickup beds that COMPLETELY rusted out. Owners replaced their beds with pressure treated lumber rather than risk another shakedown through several Vermont winters with a metal one. It was kind of an underground aftermarket product up here in New England for many years! See craftsmanship above!

Anyway, the point isn't that White missed some of these low points in Toyota's entry into the U.S. market. He simply made the standard declaration that by some magic of Japanese management principles, imports were of better quality because they were better engineers.

I believe this is only (sort of) half true. What I understand is that companies like Toyota, LEARN HOW TO LEARN from their mistakes. For a few years pre-2000, there were some really bad paint problems with Ford products. I can't remember the model line, but certain Ford paint products were peeling off. Just recently, I saw another Ford car with the same problem, nearly ten years later. Why hasn't this problem been eliminated? Has Ford learned from their mistake?

It seems that they may be, but I'm not convinced (again, chronic quality problems are perceived to be only with Big Three). As Jim Harbour points out in his new book, Factory Man, the Big Three have closed the productivity gap. A lot of those gains came from better quality design. But the Big Three have a long way to go regarding quality in other aspects of their business.

White makes a strong case for how this quality mindset is still lacking in Detroit. He quotes Rick Wagoner to set up his premsie, recently in front of Congress, as he reflected on what GM could have done differently instead of paying off UAW concessions:

"Obviously, if we had the $103 billion and could use it for other things, it would enable us to be even farther ahead on technology or newer equipment in our plants, or whatever."

This 'whatever' is the sticking point of course. Wagoner's acknowledgment of 'whatever' either illustrates that he was too exacerbated to explain 'whatever' to Congress (can't say I blame him) or perhaps he doesn't have a good grasp of whatever 'whatever' really is. Leansters have an idea, (of course!), but the thought of dragging a company as big as GM out of 'whatever' and into a different level of thinking is overwhelming to say the least and beyond the grasp of any one lean thinking individual.

White uses Wagoner's Cognressional testimony of whatever as a launching point to paint a picture of the overall problem: quality. The cost, level and perception of quality is strongly tied to inventory, technology, employee involvement and hundreds of other business concepts; a holistic approach that requires lean thinking. White does a fantastic job of tying together the labor relations, overproduction of fleet inventory to make up the Japanese-American cost gap and its devestating impact on value, quality perceptions and how all of that currently put GM in its dire situation.