Ford must copy Toyota, which copied Ford

[nadepalma]

I thought this was an interesting perspective...

SOURCE: http://www.freep.com/apps/pbcs.dll/a...014/BUSINESS01

Originally Posted by Auto.com/Detroit Free Press

Ford must copy Toyota, which copied Ford
Other carmakers should follow suit
February 18, 2007
BY TOM WALSH

Today, as the once-vaunted DaimlerChrysler merger frays, as Chrysler Group casts away 13,000 workers, as Ford Motor Co. fails to meet even the modest targets of its second Way Forward revival plan, as General Motors Corp. struggles to produce a coherent 2006 financial report after weeks of delays, it seems fitting that "The Machine That Changed the World," the seminal 1990 book on lean manufacturing as practiced by Toyota Motor Corp., is now being reissued.

In the next few weeks, Simon & Schuster will publish a paperback edition of the book, with a new foreword and afterword reflecting on Toyota's ascendance to the top of the world automotive heap during these past 17 years.


The foreword, titled "Why Toyota Won: A Tale of Two Business Systems," notes that when authors Jim Womack, Dan Jones and Dan Roos wrote their book in 1990, Toyota was only half the size of GM and two-thirds the size of Ford.

"Today," they write, "Toyota has easily passed Ford and is surging past GM to become the largest and most consistently successful industrial enterprise in the world."

The sad part -- for Detroit anyway -- is that Toyota managers unabashedly based their business model and production theories on those practiced by Henry Ford in the original Model T plant in Highland Park, circa 1914.

GM and Ford butchered the lean-production system in subsequent decades and lost their zeal for rooting out waste. When Toyota and Honda and other carmakers set up shop on American shores in the 1980s, Detroit responded with denial and excuses for its loss of market share to foreign-owned rivals. But even after conceding the merits of Toyota's system, the Detroit Three have found it difficult to duplicate.

Wonder why?

Jim Womack, chairman and founder of the Lean Enterprise Institute in Cambridge, Mass., relates this unsettling tale on his Web site www.lean.org

"In 1997, I got a call from Jac Nasser, who had just taken over Ford's North American Automotive Operations on his way to becoming CEO of Ford. He matter-of-factly told me that Ford's Explorer and F-series pickup trucks were the only Ford products that made serious money and that he calculated that he had four years to become as efficient as Toyota. Otherwise, the large pickups and SUVs would be copied by foreign firms at lower cost with higher quality and Ford would be in terminal decline.

" 'So,' he asked, 'how can Ford become Toyota in four years?' We sat down to talk over just what this would mean -- dramatically changing the supplier management system, dramatically changing the product development system, dramatically changing the production management system, dramatically changing what managers do -- and he quickly concluded that it was just too hard. So he changed the management metrics, purged the poorest managers according to the metrics, and experimented with selling cars on the Web. I was not asked back and had no desire to go back."

In short, Nasser saw the future correctly -- Toyota and others would challenge Detroit dominance in trucks and SUVs -- but didn't have the stomach to do what was needed.

Womack's prescription for new Ford CEO Alan Mulally is the same: "Ford needs to remake itself once more, this time in the image of the company that copied Ford's original system: Toyota."

GM and Chrysler should pay heed, too. Time is growing short.

[56 Starchief]

Toyota did do a lot right...but they haven't been in this position for long.

Time has a tendency to decompose things. Toyota is now starting to fray in quality as we have seen in various reports I can cite, such as pieces falling off dashes and headliners sagging.

Toyota is not the holy grail everyone thinks they are, they have not invented anything more significant than GM and Ford did many years ago but have forgotten over time.

And only time and the current restructuring effort will heal Detroit.

[Hitman1970]

Sad but true. Yes, I am not a Toyota fan, but I respect the hell out of what they have accomplished. First step to defeating a rival is respecting them.

[stevecmh]

Originally Posted by Hitman1970

Sad but true. Yes, I am not a Toyota fan, but I respect the hell out of what they have accomplished. First step to defeating a rival is respecting them.

unfortunitly ur right

[rsbaker]

I am opposed to protectionist policies but It seems though that Toyota Honda an Nissan and every other Asian maker and indeed some European ones enjoyed decades of protected markets while they had free access to US markets until they learned how to make cars well. No one would doubt that GM and Ford could have gone to Asia and bought up companies like Honda and Toyota in the 1960's for spare change. Now it's time to give the Big American 3 at least a little of the protection that all foreign makers have received in the past until they can completely reorganize themselves and become competitive. This should be done not for the sake of those Companies but for the sake of this Nation and for its economic future. I for one don't want the United States to become the Great Britain of the 21st Century. A nation can only be great if it is able to make and manufacture things.

Shame on us all for not looking out for our country FIRST and allowing almost all of the industry in this country to be bought and sold at Fire Sale prices to enrich the moneyed few.

[LAMRONH]

Lack of leadership...it'll kill you every time. Unfortunately this is happening at the highest levels in our country and has been for some time.

Fortunately for Bill & Co., Mulally IMHO is many pay grades above Nasser in skills, track record, balls, and brains.

[Chet]

Originally Posted by rsbaker

I am opposed to protectionist policies but It seems though that Toyota Honda an Nissan and every other Asian maker and indeed some European ones enjoyed decades of protected markets while they had free access to US markets until they learned how to make cars well. No one would doubt that GM and Ford could have gone to Asia and bought up companies like Honda and Toyota in the 1960's for spare change. Now it's time to give the Big American 3 at least a little of the protection that all foreign makers have received in the past until they can completely reorganize themselves and become competitive. This should be done not for the sake of those Companies but for the sake of this Nation and for its economic future. I for one don't want the United States to become the Great Britain of the 21st Century. A nation can only be great if it is able to make and manufacture things.

Shame on us all for not looking out for our country FIRST and allowing almost all of the industry in this country to be bought and sold at Fire Sale prices to enrich the moneyed few.

The US automakers had protection - see the quotas of the 80s. These did nothing but hurt the US automakers in the long run. It made Japanese cars in more demand, which allowed them to make more profit. The US automakers where able to keep market share and still make profits - except that they now had no reason to invest in product. We all know where this lack of investment got them when it came time to compete.

[guitarlix]

"Ford must copy Toyota"

I think it's a little too late for that. Now, Ford must concentrate on being 100% American Ford. Maintain quality and reliability but come out with better looking cars.

[mbukukanyau]

They forget to mention Currency msanipulation, legacy costs etc..

Toyota is no saint of efficiency.

[JonathanRohr]

Originally Posted by 56 Starchief

Toyota is not the holy grail everyone thinks they are, they have not invented anything more significant than GM and Ford did many years ago but have forgotten over time.

You right, they only made like what, 17 billion dollars last year?

And we almost broke even!

Weve already won! WAHOOO!!!

[b4z]

Ford made $22.5 BILLION in 1998.
Look where they are now!

Their reliance on trucks, bad management and the pay scales of the UAW
got them and GM into this.

[lio45]

Originally Posted by guitarlix

"Ford must copy Toyota"

I think it's a little too late for that. Now, Ford must concentrate on being 100% American Ford. Maintain quality and reliability but come out with better looking cars.

You're misinterpreting. What they must copy is Toyota's methods for efficient production and management. Nowhere does the article says anyone should look at Toyota's products for inspiration.

It's possible to put out 100% American products while still having lean manufacturing methods, management accountability, etc.

[DuallyMan]

You can blame strong dollar on the Fed and its interest rate policy. Bank of Japan has dollar surplus, so they buy US treasury. Which keep the dollar high. They keep inflation low and make everyone happy.

Originally Posted by mbukukanyau

They forget to mention Currency msanipulation, legacy costs etc..

Toyota is no saint of efficiency.

[tgagneguam]

Originally Posted by mbukukanyau

They forget to mention Currency msanipulation, legacy costs etc..

Toyota is no saint of efficiency.

If the assertion is that Toyota simply made it because of currency manipulation, dumping its cars on the US market, a lack of legacy costs, and many similar external factors, then I'm left to wonder why other companies that "grew up" in the same environment fared so poorly; Nissan was near bankruptcy at the turn of the Century and only within the past 2-3 years sold more cars than it did in the mid-1980's (when it moved nearly 830,000 units, making it the largest Asian make in the US at that point), and I have to wonder if Mitsubishi will ever get its act together.

I'm aware that some external factors played a role in Toyota's rise, and there's a little luck that played a role, too, but much of what the Company has accomplished to me is quite enviable. It's not sinister to say that, and it's not a "then go to Toyotanation and buy a Lexus, tgagneguam"-deserving statement. It simply means that as a lifelong GM car driver, GMAC mortgage customer, GMCard holder, and holder of GMAC DemandNotes, I think that GM still has a few things to learn from the best run automaker in the world. If GM learns a few key efficiency and constant improvement lessons from TMC and applies its own strengths to the formula, the Company will be far better off.

As Hitman1970 suggests, there's nothing at all wrong with putting pride aside and learning from the best (in some respects).

[Havasavana]

Originally Posted by LAMRONH

Lack of leadership...it'll kill you every time. Unfortunately this is happening at the highest levels in our country and has been for some time.

Right. Responsibility starts at the top, and the top at Ford has been the Ford family since they have enough control of voting stock to control the company. With GM, the top has been the stock holders, and with the US, the top is the citizens. All too lazy and ignorant to give a damn or do what's needed. It'll kill you every time and it's killing us.

This book was researched in the late 80's and involved lots of interviews and participation by high-level people from GM, Ford, etc. So they knew what what was going on and how poorly they compared with Toyota. Result? More of the same in terms of sloppy processes. Result? More of the same in terms of market share losses.

Has anyone read the book "Dark Age Ahead" by Jane Jacobs?