OT: why American businesses are in trouble

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, 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 Executives as bonuses and the next year's racing team was "outsourced" to India . .

Sadly, the End.

However sad but oh so true! Here's something else to think about:

Ford has spent the last 30 years moving all its factories out of the US, claiming they can't make money paying American wages. Toyota has spent the last 30 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.

IF THIS WASN'T SO SAD IT MIGHT BE FUNNY.

Reply to
Jimbo
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Jimbo wrote: ...

You might want to look at _where_ in the US those plants are located and see if that is, perhaps, enlightening...

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Reply to
dpb

Please enlighten me.

Toyota prefers Canada to the Southern US. Sad NYTimes article :

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Reply to
Garage_Woodworks

Certainly might be, but not for the reasons you are thinking.

Reply to
Mark & Juanita

Jimbo wrote in news:874b4ec0-d3f4-4f73-837b- snipped-for-privacy@i12g2000prf.googlegroups.com:

Reminds me much of IBM. I think the problem started with the hiring of middle management.

They don't have the baggage the American big three must carry.

Reply to
Hank

I believe I've read that the Big three have a labor/benefit cost of nearly $75.00 per hr where-as Toyota has one of $45.00...not a insignificant difference.....Good medical and retirement packages do not come cheap.....Rod

Reply to
Rod & Betty Jo

So how do you propose to fix things, with crappy medical and retirement packages? Or do you want the .gov to deliver those plans? And what's the problem we're trying to solve? Unemployment is pretty low so this sounds like a lament for the auto industry. Personally, I wish Detroit designed cars I wanted to buy. Sadly, they don't.

Reply to
Jeff

How do you know that? :)

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Reply to
dpb

Jeff wrote: ...

The latter is the Japanese way which is a major part of the cost differential. Secondly, they don't have the other 50 years of operations prior to WWII to add that legacy overhead of facilities, etc.

As for the solution, I don't have a great "magic bullet", but definitely isn't level field at present...

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Reply to
dpb

If you want an argument, change the subject.

The US auto industry is simply reaping the rewards of their arrogance of the last 50+ years of building a poor product and thinking their customers would continue to buy that poor product offering indefinitely.

Bring back those big tailfins and the chrome rings on the Buicks of the mid

50s used to distinguish a new model year.

NOT

Lew

Reply to
Lew Hodgett

Do you remember seeing the UAW bumper stickers in the 70s that said "Buy What America Builds"?

Too bad that management never figured out that the Japanese were eating them for lunch with a different approach: Build What America Buys.

Reply to
Doug Miller

Toyota may prefer Canada but they have a brand new plant in San Antonio Texas that builds some the new and very popular Tundra's.

Reply to
Leon

Very true, they don't have to provide health care for long gone workers and their families even after they are dead.

Reply to
Leon

snipped-for-privacy@milmac.com (Doug Miller) wrote in news:qXHmj.5530$ snipped-for-privacy@nlpi068.nbdc.sbc.com:

Isn't this called capitalism, or the marketplace? The marketing people and the beancounters can confuse things to the public so that labor costs are "postponed", but eventually it comes out somehow, and the labor contract needs changes,or the company goes "bankrupt" and the pensions are converted to something the "government" "guarantees".

Reply to
Han

You hit the nail on the head Lew. Additionally they paid workers benefits that were bordering on reckless. The big 3 never had to compete. There was always too many buyers until the Asian and German automobiles started to catch on. I retired at 40 from the automotive business and from age 23 to retirement I worked for an Oldsmobile dealership and later a wholesale AC/Delco/3M distributor that sold strictly to GM dealers. I was always in upper management and the BS GM would pull left me with no sympathy for the now gone Oldsmobile division. They are getting what they deserve.

Reply to
Leon

Maybe we should start a war with the Japanese and this time let _them_ bomb _us_ into rubble. I mean it worked for _them_.

Reply to
J. Clarke

Just plot the existing facilities on a US map...

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Reply to
dpb

Exactly so. Too bad the government decided that it "had to" bail out Chrysler when they were belly-up. That distorted the action of the free market, and allowed the mismanagement to continue, thus postponing the point at which Ford and GM would get the message.

Reply to
Doug Miller

snipped-for-privacy@milmac.com (Doug Miller) wrote in news:TVImj.9211$ snipped-for-privacy@nlpi070.nbdc.sbc.com:

Not sure that the bailout had that effect. I thought that Chrysler sort of righted itself and paid the loan back, even ahead of time. I think that the current state of affairs is mainly a product of "collusion" between the accountants and the labor benefits people, so that everything was postponed on the balance sheet until later (which is really soon now, when the older workers really retire). That's why I think that for pensions and health care contributions defined benefits are bad, and defined contributions better, from a true accounting standpoint. Somehow we are going to have to learn that there is a real cost to benefits, and we should take responsibility. Question is how to make people pay (one way or another) for the costs of preventive healthcare vs. cancer treatment. Example is that women apparently choose not to have mammograms if there is a copayment. How many will then get breast cancer that is detected too late???

Reply to
Han

I don't get that comment regarding "legacy overhead of facilities ...". The fact is, that if the infrastructure in facilities is that old, it has been paid in full for a number of years compared with the real cost and overhead of having to build new infrastructure in a place you've never done business before. *That* should be an advantage for the US automakers, not a detriment.

Reply to
Mark & Juanita

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