History Why the American Automotive Industry Failed, and Continues to Fail: W. Edwards Deming

We could keep this a union and greedy exec. bashing tread. Yes they deserve some of the blame, but not all of it.

The most basic economic principle of sustainable economic advantage dictates where resources (capital and labor) go. In order to earn 8X what another worker makes in another country, you have to be 8X as efficient as they are all things equal. We're not! A big part of the problem is taxes.

Face it, it's tough to compete in manufacturing now in N.Amercia as it is. At least in Canada there is an unstoppable decline in manufacturing jobs. You can't compete with the highest income (60-70%) and business (45%) taxes in the G8, with crumbling 1950's infrastructure, an influx of unskilled immigrants and declining education standards with more efficient countries. Instead of spending the money on world class infrastructure, education, R&D, efficient transportation, and encouraging people to have families, we're taxing the shit out of everthing to piss away on pet projects to generate votes, bloated government adminstration, waste, wars and helping everybody else. We're happy to get a couple of new diesel locomotives to replace our 25 year old commuter trains that go 100 KMPH. The Chinese are putting in high speed electric trains that go 300 KMPH. Who's first world? How many miles of track and trains could we have built with the $30Billion we've pissed away in Afghanistan alone?

I know countless professionals (engineers, doctors, accountants, business owners) who now choose to work part time, or take long vacations because any income over $100K is taxed at almost 50%. If the bills are paid, why kill yourself? How are you going to compete when some of your highest skilled workers chose to fish or garden instead.

Read the world wide competitiveness studies. You know who's on top. Switzerland. Is anything cheap there? No but they have world class infrastructure, R&D, and the lowest business and personal taxes in Europe. It's world headquarter and R&D heaven. For the most part, they have their shit together. Look what Ireland has done in the last 10 years.

I can't change it, so I just focus on my small business, spending time with my family and working on my '49 Ford has time and finances permit. I have not bought a Canadian newspaper in 5 years and haven't had cable in 3. I'm tired of the doom and gloom. The Canada I grew up in is long gone and never coming back. I catch world news on the internet and try to be happy. I think most of us should be pretty happy with what we have. Not too many workers in China and India get to go home to a decent house and work on their toys. If you think we're fucked, talk to business owners and workers in South Africa or other places.

 

I'm not trying to rationalize or justify anyones wages. I did say workers but I mean all employees of a company. If you want to keep jobs and manufacturing in the U.S. in this day and age you have to realize that you are competing in a global economy. The days of being able to say we need to keep everything in our own country, pay high wages, give great benifits and then we will be fine are over. When companies are owned by people all over the world (stockholders) and they are not all fat cats, the bottom line is profit and stockholders would rather pay one guy 1 million dollars than 10 people $50,000 dollars if that one guy can make them more money. Business is not about whats best for a nation anymore it is about money, and the individuals who want a return on their investments (just like your 401k), and if one nation cannot compete with another they lose out. Not saying it is a good thing but it is todays reality.

North Americans have become used to a lifestyle that the majority of the worlds population does not enjoy. We need to realize that and understand that the give me give me attitude is starting to bite us in the ass. We have wasted and induldged for along time and it was inevitable that something had to change. Our demand for more and cheaper stuff has opened the doors for countries whose workers will work for $12 an hour, and a lot less, to become powerhouses and we financed that. It's pretty hard now, when the U.S. owes countrys like China huge amounts of money to say sorry but we are closing our doors to all of your products so that we can support our workers. I don't think that would go over all that well with China and they would probably want to know where their money was.

Greed is a relative term. You and I thing that CEO's making Millions are greedy but there are plenty of families right here in North America who would probably think that you are greedy wanting to send kids to college and go on trips to Disneyland because they are barely able to scape by. To them what you have probably seems as far out of reach as owning that multimillion dollar house with the fully stock garage is to us. We have it pretty good and sometimes I think we take it for granted.

However, I think we are straying from the topic. Bottom line I think that the American car manufactures did just about everything that they possibly could wrong (quality, development, foresight, wages, pensions, upper managment) and it is going to be a tough hole to crawl out of.

 

This is going way beyond where I feel I can comment. So from now on I,ll just watch.

 

this might not be good news for me and a lot of people... http://media.gm.com/servlet/Gateway...monthlyreleasedetail.do?domain=74&docid=49679

acdelco parts is a big part of my job and my paycheck... gawd' do I hate "globalization"

 

And had they not wasted their money buying those ailing European brands maybe they'd have more money to help them out of the situation theyre in now.

And all those Camrys are made in Australia, NOT Japan or America. In fact much of the current Camry's styling is from Australia.

The Toyoda family embraced Demming when he was in Japan and based the Toyota Production system on his teaching. The 'Toyota Way' is a combination of Sakichi Toyoda's phylosophy combined with Demming's genius.

I sincerely hope the US industry is not to late and can get itself out of the dire straits it's gotten itself into. Ford should be OK, Chrysler, I dunno, but GM will need some radical and quick action and a serious departure from 'tradition' in the longer term, if it's to survive.

Problem is, the company you all love to hate, needs the US manufactirers to remain in business, for it's own well being.

 

you have been totally brainwashed by the liberal left wing automotive press, into thinking the Big Three USA car makers are doing so bad, and the Japs and Germans are going so good

in reality, they are ALL doing bad- Toyota sales down 24%, Honda sales down 25%, and Lexus sales down 33% just to name a few

GM, Ford, Chrysler have been here before, they lasted through the Great depression 1929-1941. And they will survive this as well. The best thing they could do, is combine all 3 companies into one huge American conglomerate, then they'd really kick ass.

see just how bad the Japs are doing here:

http://www.toyota.com/about/news/corporate/2008/10/01-1-sales.html

http://www.sfgate.com/cgi-bin/artic...27/financial/f040951D89.DTL&feed=rss.business



Toyota sales went down 29.5 % last month, along with the entire auto
industry, due to the credit crunch

Lexus went down 33%

GM has been there before, during the Great Depression- no biggie.

now we'll separate the men from the boys. It's easy to make hay in
the sunshine, let's see the Jappers make hay in the rain.

Toyota Reports September Sales

October 1, 2008 - Torrance, CA - Toyota Motor Sales (TMS), U.S.A.,
Inc., today reported September sales of 144,260 vehicles, a decrease
of 29.5 percent from last September, on a daily selling rate basis.
Calendar-year-to-date (CYTD) sales total 1,793,303 units, down 10.4
percent from the same period last year.

The Toyota Division posted September sales of 128,215 units, down 28.9
percent from last September. The Lexus Division reported September
sales of 16,045 units, a decrease of 33.4 percent from the year-ago
month.

Toyota's global sales down in July-September

(10-27) 04:09 PDT TOKYO, Japan (AP) --

Toyota Motor Corp. said Monday its global sales in the July-September
quarter fell for the first time in seven years due to faltering demand
in the U.S.

---------------------------------------------------------------------------­-----
Japan's top automaker sold 2.24 million vehicles worldwide during the
quarter, down 4 percent from the same period last year. It marked the
first year-on-year decline in the July-September period since 2001,
the company said.
Toyota had enjoyed strong U.S. sales earlier this year on robust
demand for fuel-efficient vehicles, but September sales there dropped
32 percent due to sluggish consumer spending

 

http://www.thetruthaboutcars.com/honda-sales-down-252/



Honda Sales Down 25.2%
By John Horner
November 4, 2008 - 822 views

Honda’s press release puts the number at 28.4 percent, but that’s
using Daily Selling Rate nonsense. In simple terms, Honda sold 25.2
percent fewer units in calendar October 2008 than in the same period
last year; which puts them in the same boat as Toyota. Only two models
showed sales upsides: the Honda Fit and Acura TL. The Fit has been
capacity constrained forever and is still a relatively modest player
at 6,478 units for the month. The TL is likewise a niche vehicle which
jumped from 3,421 units last year to 4,340 this October thanks to the
all new 2009 TL. But, Acura has two disaster products on it’s hands;
the forever poor-selling RL range topper and the near luxury mini-ute
RDX. RDX sales collapsed from last year’s already low 1,937 to an
abysmal 647 units. Back over at the Honda brand, one surprise in the
numbers is the collapse of Accord sales, down from 30,936 to only
19,783, a 36 percent drop in Honda’s #1 selling product. The Odyssey,
Element and MDX also all posted larger than average declines. However,
for some reason the Ridgeline’s fall was a little less than the
average falloff. Cash on the hood effect? Year to date, Honda is still
up slightly over 2007, but that record seems likely to fall over these
next two months. During the first half of 2008 Honda seemed to be
playing in a different ballpark than the rest of the US auto business.
But from summer on they have regressed to the mean. But hey, there is
one fun-fact buried in the numbers: Honda took sales credit for one
unit of the FCX Clarity hydrogen fuel cell vehicle. I wonder who the
lucky customer is?

http://www.zacks.com/blog/post_detail.html?t=12015

U.S. Keeping Honda Sales Down

Posted Thu Mar 20, 11:12 am ET
Posted By: Paul Raman, CFA

Honda Motor Company (HMC) is expanding its business in Asia, growing
its global network to increase efficiency and introducing new products
to satisfy local markets. Further, capacity expansion plans in Asia, a
new sales strategy in Japan, and the proposed launch of Acura in Japan
inspire optimism about Honda's future prospects. Strong sales in the
emerging markets and cost-cutting also helped lift the car maker's
quarterly profit.

However, unfavorable currency exchange rates, flat-to-lower sales in
its key markets (North America), and increased competition will
threaten HMC's global competitive position. Therefore, we maintain our
Hold rating with a six-month target price of $28.50.
Currently, ADRs of Honda Motor Co. are trading at 7.9x our 2008 EPADR
estimate of $3.46. We believe Honda's stock has a further upside,
given its technological leadership and global production capabilities
that enable it to continually provide its customers with cutting-edge
products designed for their unique local needs. However, volatile
crude prices and intensifying competition are some factors that may
lower volumes.

 

Interesting talk about management. I think management and sales are doing a poor job over-all, but worse than that, the product they manufacture is no longer reliable, and is not maintainable by the owner.

It's basically a Rube Goldberg device now.

I don't even know why they open the hood at the sales point.

 

You guys are missing an obvious point here. Yes, Demming had a lot of profound ideas & it took a long time for Detroit to embrace them. The US automakers had to learn the hard way, but the ideas did take root.
The focus on quality @ GM & Ford runs deep. At GM, I have to respond to warranty data even when there are as few as 8 cases out of the 120K vehicles sold!

You only have to look at the last few years of the JD Powers results to see that Detroit has been kicking Toyota's, Nissan's, & Honda's ass!!
If the credit crunch & $4 gas didn't happen, GM would be printing money with their line up. The implosion of the banks due to thieves & scoundrels killed their plans.

Some JDP survey results-
http://www.singlefingerspeedshop.co...f=2&t=27&sid=3014041ed336937849998756a6aaa9d1


Buying imports kills US jobs, so we should treat it as a form of sedition! Hang the traitors!

 

Name five people in the wing.

 

Maybe the Big 3 are going down because everybody wants to drive a Hot Rod. I hope not. The big 3 will want to get in on the act and they'll ruin that as well.

 

Scrounger's got an agenda to politicize this thread and get it shut down just like the one he started posting the exact same verbage.

Actually when you look at it, the "facts"he spews aren't really tied directly to manufacturing philosophy (ie the purpose of this thread), they're corporate values involving design, marketing, finance, the whole ball of wax.

 

As a retired quality assurance professional I am intimately aquainted with Deming's work, background and statistical tools. The big three realized in the late 70s they had screwed up and have been playing catch-up ever since.

The legacy costs of producing a big three car, in my opinion, will put all three into bankruptcy. I still have brand loyalty to American made iron but there is going to be blood in the streets during the shakeout. The shear number of model offerings is killing them. How many do Toyota and Honda offer?

 

Methinks it's gettin' a little bit too political here.

For whatever reason and whoever's fault, the domestic North American auto makers are hurting. I think we all try to do our best to support our way of life despite the deals and schmeals the policrats do. There's more than enough blame to go around, both with the govt, the manfacturers and the unions. I'll do what I can while restoring my Ford, and will try putting as much "made in USA" parts into it as possible. I heard there's supposed to be a new round of incentives coming out next week and I'm in the market for a new pickup. Goin' down to the Ford dealer to do some window shopping this afternoon. They ARE still made in North America, right?

 

Hmmm....

 

It seems to me, we used to fight the communists with firepower, but today we have found the ultimate weapon. We print dollars, they take it and deliver us manufactured goods.

The money is completely worthless, so why are we complaining about communist product quality?

We even got them tainting their baby milk.

I figure five, ten years we will have produced a perpetual killing machine in China, Vietnam, and Russia.

We can then declare victory, and stop printing worthless dollars

 

A few thoughts here:

The thoughts about Deming, quality improvement, etc. are certainly important and certainly a big part of the problem. The problem has a few other facets, though:

The mainstream (non gearhead) automotive press fell in love with Japanese and German cars decades ago, and are unwilling to view American cars without looking at them through the prism of the '74 Pinto. I still remember when Toyota and Chevrolet joint-ventured the Geo. Consumer Reports gave the Geo a terrible review for build quality and reliability projection, and gave the Toyota Corolla outstanding marks. The punch line? They were built at the same plant, to the same designs, by the same workers, on the same assembly line. I haven't thought of CR as anything but CRap since. Read any review in any mag like Autoweek, Car and Driver, Road and Track, etc. Any flaws in Japanese cars are excused as "likely exceptions," while any flaws in American cars are treated as continuations of a theme. While you can argue that the Big 3 may have earned this reputation, I don't think the magazines do anyone a service by this kind of reportage.

The comments about the American view of the workforce earlier in the thread were under-recognized in my opinion. You can implement process improvement all you want, but when you're constantly training new workers and letting experienced workers go, you're treading water.

The American view of the dealership selling experience is utter crap. This happens to be my field of expertise; nearly every industry that employs professional salespeople to facilitate the final transaction has radically changed and updated their methods over the last 20-25 years. Not the car business - it's the same old manipulative bullshit that they were doing when they were peddling Falcons and Chevelles. This hurts the automakers in two ways - first of all, customer buy cycles are extended, because consumers will put off new car shopping rather than go into the dealership, because the experience sucks. The second way is that the customer relationship is never built, so the customer starts his buying process from scratch, rather than from a pre-existing brand/dealer/salesman loyalty.

I would also argue that one thing that characterized American cars for many years was DESIGN that was unique and exciting. That has been lost, for the most part, as Americans have tried to build cars that look like the same wet bar of soap as their overseas counterparts. Some put down the new Mustang/Challenger/Camaro as retread designs; I like the hell out of them simply because they have lines on them that exist for no other reason than to look good.

Personally, although I've owned a few foreign cars, I prefer American. My daily driver is a '98 Buick Riviera (supercharged V6) that is trouble free and still feels like a bank vault on wheels at 150,000 miles.

 

I remember Deming well, I worked for a large corporation that went for the big prize, the Deming award, spent no telling how much money, spent a lot of time with it.................won it............people were laid off, the company was later split off and then sold.............

I was forced out with 27 yrs of service and had turned 55...........but I was lucky.. I still had full retirement,but was not ready to retire......etc..

he had some good ideas though,
now back to my hot rod.................

 

I agree.

Q: How Much?
A: I can put you in this car today for $239 a month.

Q: What's the loan pay-off?
A: I'll have to do a credit check.

Q: I'll pay cash.
A: We're not equipped to handle cash.

 

"...you have been totally brainwashed by the liberal left wing automotive press...."


Holy shit, thats the funniest thing I've heard in quite some time!
Thats an example of having nothing else to blame...

 

Over-production. Their folly. They have ignored one factor, the law of supply and demand.

I look at the bright side. I thank the Automobile Industry for the extra cash I (don't) spend on a new car.

Their inept-ness has made it possible for me to buy a 5 year old car with less than 120k miles on it that cost 20,000 new for around 5grand. I havea been doing that ever since the 1980s.

Being of modest means, I resist buying anything that I have to make paymnents on because with that comes additional costs, interest, the requirement by the lender for me to have full coverage insurance, etc. The only insurance I ever carry is the liability mandated by the state of Colorado.

Without a car payment and the additional cost of full coverage insurance I have an estimated $$500 a month to play with, spend on my old car hobby!

Thank you, again, Automobile Industry. Thank you, thank you, thank you!

 

Every brand of car discussed in this thread, be it foreign or domestic, is manufactured by a publicly traded corporation. The profits and proceeds go to the shareholders.

If I own Toyota shares, why would I buy a Ford? Toyota is partially owned by me, I should buy from my competitors? The cars are made all over the world - engines in Korea, tires in China, electronics in Japan, assembled in Maryland....workers everywhere, consumers everywhere.

From here forward, its just branding.

 

yawn

kinda against what this forum is about ..aint it?

what so "traditional hot rodding" about this?

we all have our views as to why this crap is going on..and it all becomes intensly political..again, against what this place is about..

 

Keep in mind the US auto industry went from many many manufacturers of cars to the big three. They've had their bad days, but if they fail we could go back to small manufacturering as a way to get American cars. Good for innovation, but you'll either make your own car or order one two years in advance. Keep in mind the US is really the only country with an interstate highway system ie no hopes pinned on mass transit except avaition and the funny goverment boondoggle of the passenger rail system.