a modern parable

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 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 and free pens 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 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 out-sourced to India.
Sadly, the End.
Sad, but oh so true! Here's something else to think about: Ford 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 Ford racked up 9 billion in losses. Ford folks are still scratching their heads.
IF THIS WASN'T SO SAD IT MIGHT BE FUNNY!
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One thing to remember: The average age of the American unionized auto worker is getting up there in years. How much does health care cost Ford (and GM and Dodge) for these workers? Quite a bit. Now here comes all the foreign badged factories building cars in the states. Who do they hire, the older workers? Of course not. They hire the kids in their 20s and their health care costs are next to nothing. They also don't have to pay the pension for somebody who has not yet retired. They are also non-union. Do you now see why Ford moved their workforce out of the country? Now you could say that this is Ford's fault for agreeing to union demands, but our government also helped destroy American made cars when they agreed to have the foreign made factories sprout up without letting Ford, GM and Dodge compete against them by having the workforce the same age. The comparison between American cars and American made foreign cars is really like comparing apples to oranges. Bash Ford and GM all you want. They are not competing with the foreign makers with the same rules.
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wrote:

US, claiming they

Perhaps this might explain why they are non-union?
http://www.autoblog.com/2007/01/31/toyota-workers-in-us-made-more-than-uaw-members-for-first-time-l /

Yes, I see why they moved their workforce out of the country. No, I do not understand why they are still losing money. According to the article, Toyota workers are now at parity or slightly above UAW wages. With Ford having so much outsourced to Mexico, they should have a -lower- wage burden than Toyota.

Nothing more than political talking points.

Right. Their rules seem to be to golden parachute all their executives.
Once you pay an exec a salary more than 500K a year, they are way beyond the level 'needed' to live. In short, 70% of what they are spending their salaries on are pure luxury items. At that point the ONLY incentive they have to do a better job and thus raise their salaries via bonuses and increased income, is pure greed and advarice. Most execs at that level and beyond are at the point where they could retire tomorrow and never have to work again, and thus how do you motivate someone like that to work for the common good of the company?
People should be rewarded with money if they do a good job for the company, but the company also needs to have a mechanism for identifying the executives who cannot be motivated anymore to continue to do a good job. Unfortunately American companies in particular seem to stick their head in the sand on this issue - they seem to think that once an exec breaks the half-million a year salary range, their going to remain worth their weight in gold for the rest of their lives no matter how crappy a job they do.
Ted
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Ted Mittelstaedt wrote:

http://www.autoblog.com/2007/01/31/toyota-workers-in-us-made-more-than-uaw-members-for-first-time-l /
Toyota also outsourced some work to Mexico (they have one plant there).
The reason why DiamlerChrysler gave away Chrysler (it actually cost over $700 million for DimalerChrysler to get rid of Chrysler) is that Chrysler had over $18 billion in pension liability that DiamlerChrysler did not want to bear.
One of the big handicaps that the Michigan 3 gave themselves is that when you buy a Michigan-3 vehicle, a big portion of the profits go to pensions for already retired workers. Ouch.
Jeff
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Kruse wrote:

Actually, in a way they do pay for the retirement. They match 401k's for the workers. The thing is that all the retirement costs and health care costs are paid upfront. Which means that after the cars go out the door, the car makers don't have no more retirement liabilities. The retirement plan is fully funded. On the other hand, the Michigan 3 did not fully fund their retirement plants and future health plans at the time the cars were made. So they took on huge liabilities.

Ford still has a huge workforce in the country.
The Michigan 3 (especially Ford and GM) are making tons of cars outside the country for sale outside the country. They are growing by leaps and bonds. It is is an investment in their futures, because they should be able to reap huge profits from countries like India and China.

So are you doing to discriminate against young workers by requiring some companies to hire middle aged workers? Or old workers?
The problems with the pensions are the Michigan 3's fault, for not funding their retirement pensions for their workers completely at the time the cars were made, instead of relying on future sales.

The Michigan 3 are using their own rules.
Jeff
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You apparently have fallen for Toyotas deceptive advertising. Actually over half of the Toyota vehicles sold in the US in 2006 were imported or not made in the US, while only 15% of what Ford sells in the US are not made here. You are not factoring in Toyotas much lower labor, benefits and parts costs, as well as the fact Toyota takes all of the profits it earns in the US, out of the country federal tax free.
mike
Ford has spent

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Mike Hunter wrote:

Poor ole Mikey, just has to doctor the facts to fit his take.
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Mike Hunter wrote:

Why don't you file a FTC complaint? Honda had to stop calling its lawn-mowers "Made in America" because of such a complaint.
Actually, that is incorrect. Of the nearly 3,000,000 vehicles Toyota sells in North America, over 1,500,000 are made in North America.
So over 50% of the vehicles are made in North America. And about 1/2 the parts for all the vehicles Toyota Sells in North America are made in North America.

Technically, you are correct about Toyota not paying US taxes. However, Toyota's operating subsidies in the US do pay US and state income taxes.
If I am incorrect, back up your statement.
Or learn to speak about only things you understand.
We would never hear from you again if you do the latter, but that would be ok.
Jeff

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