Why we are falling behind

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RickyZ

Senior Member
Sep 20, 2012
8,677
313
83
#1
From Facebook...

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 paddling and 1 person steering, while the American team had 7 people steering and 2 people paddling.
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 paddling.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the paddling team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 2 people paddling the boat greater incentive to work harder . It was called the 'Rowing Team Quality First Program, with meetings, dinners and free pens for the paddlers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices , and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.
The next year the Japanese won by two miles.
Humiliated, the American management laid off one paddler, halted development of a new canoe , sold all the paddles, and cancelled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.
The next year, try as he might, the lone designated paddler was unable to even finish the race (having no paddles), so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India.
Sadly, the End.
Here's something else to think about:
GM 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.
The last quarter's results:
TOYOTA makes 4 billion in profits while GM rack s up 9 billion in losses.
GM folks are still scratching their heads, and collecting bonuses....
IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY.
 

RickyZ

Senior Member
Sep 20, 2012
8,677
313
83
#2
Today's LA Times says Ford and GM will stop producing sedans and only make trucks and SUVs from now on.
 

tourist

Senior Member
Mar 13, 2014
24,893
3,298
113
63
Florida
#3
TOYOTA makes 4 billion in profits while GM rack s up 9 billion in losses.
GM folks are still scratching their heads, and collecting bonuses....
IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY.[/QUOTE]

GM ,burdened by past debt and mistakes adds the cost of their ineptitude to each new car that is produced. I read in a business journal once that $1100 is added to the cost of each new car to pay for unfunded pension liabilities and mismanagement policies. This was over 15 years ago, probably at least double now. This current business model is not sustainable. The failure of GM is inevitable. That's OK, I drive a Nissan.
 

Locutus

Senior Member
Feb 10, 2017
4,818
422
83
#4
GM's profits and losses need to be put in perspective:

The Detroit automaker’s existing operations in the fourth quarter lost $4.9 billion on $37.7 billion in revenue. That loss is related to a non-cash $7.3 billion write-down of its tax assets in the fourth quarter of 2017. GM reported an 18.7 percent increase in pre-tax profits, earning $3.1 billion in the fourth quarter.

“We believe the bull case for GM is too positive to ignore,” Barclays analyst Brian Johnson said in a statement. “Even with the ongoing market volatility, we believe GM stock should outperform today — and we hope that the (fourth quarter) is potentially more of a catalyst to spark some momentum.”

Full text:

https://www.detroitnews.com/story/b...gm-annual-earnings/110146218/?from=new-cookie
 

SpoonJuly

Senior Member
Feb 16, 2018
811
502
93
#5
GM has to deal with the UAW, Toyota does not.
What is the difference in the labor cost per car?
 

Locutus

Senior Member
Feb 10, 2017
4,818
422
83
#6
I looks like they are comparable - Toyota is not unionized but their pay package is probably competitive to a Union car marker as the union is trend setting the rate to a degree.
 

Oncefallen

Idiot in Chief
Staff member
Jan 15, 2011
5,085
826
113
#8
I looks like they are comparable - Toyota is not unionized but their pay package is probably competitive to a Union car marker as the union is trend setting the rate to a degree.
Where the non-union plants win big time is in pension packages (they typically have 401Ks instead of old style pensions that have to be funded fully the employer.
 

zeroturbulence

Senior Member
Aug 2, 2009
21,940
1,720
113
#9
Im probably going to catch a lot of flak for this but, the bottom line is that Toyota makes better vehicles.

I've been interested in the rise of the japanese as an industrial leader for a long time. If you remember back in the 60's and early 70's, japan was more well known for their toymaking and they weren't very good at it. There was an american named Deming who introduced the japanese to a concept called Total Quality Management (TQM) and when they put that to work along with their culturally ingrained sense of having an excellent work ethic, japanese products became top quality. Even now, they have a work ethic that would put americans to shame. They work 12-16 hour shifts and they equate their personal self-worth with the quality of the work that they do. If a product is defective or poorly designed or put together they consider it a personal failure. The suicide rate among japanese workers was very high in the 80s and 90s. I dont know if thats still true but I wouldnt be surprised if it is.

When japanese companies like toyota put together a car they focus on making the best quality vehicle they can within that vehicle's price range. Of course their vehicles arent perfect and some even have big issues, but overall their build quality is very good and they are well engineered to last and give trouble-free performance. GM in general tries to get away with cheaper, lower quality materials and designs that aren't made to be as durable, but they save the company money.
 

SpoonJuly

Senior Member
Feb 16, 2018
811
502
93
#10
Where the non-union plants win big time is in pension packages (they typically have 401Ks instead of old style pensions that have to be funded fully the employer.
Seems I read somewhere that GM workers total labor cost is $70 per hour and Toyota was $55.
That seems like a ridiculous amount of pay.