Ford must copy TMC, which copied Ford

Ford must copy TMC, which copied Ford http://www.freep.com/apps/pbcs.dll/article?AID=/20070218/COL06/702180693/1014/BUSINESS01
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.
-- "The king of Israel answered, "Tell him: 'One who puts on his armor should not boast like one who takes it off."
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Toyota is surging in the world market because it takes advantage of the economies of scale of the world market. GM and Ford do not.. GM and Ford build vehicles in other parts of the world that are designed specifically to meet the demands of those markets, Toyota does not. GM and Ford have only recently started using basic chasses that are suitable to be sold in all markets
Toyota develops small cars and truck for those markets but they have the goal of producing in those markets, with the intention of globalizing the vehicles. Toyota builds and sells in one market then eventually brings those products to the US market at a much lower build costs, types of cars that are not available from GM and Ford.
Look at what Toyota sells in the US today. With the exception of the Camry and its derivatives, they import all of the vehicles that have been growing in demand over the past five years or so. Unlike GM and Ford, that produce at least 80% of what they sell in the US, in the US, over 50% of what they sell in the US are imports. Few America realize the profits Toyota gleans out of the US, go to Japan federal tax free.
Toyota does a great job of convincing its customers that it is makes most of it vehicles in the US which simply is not factual The Corolla is not made in the US. It hybrids are not made in the US. The Lexus is not made in the US. The Camry, which is only assembled in the US, is largely composed of lower cost imported parts. . Toyota claim they proved many American jobs . What they don't tell you is those jobs are far fewer than the number of jobs they have taken to Japan from the US. They don't tell you they compensate their employees in the US at a much lower rate than the jobs they have eliminated in the US. The don't tell you they do not offer their employees a defined pension, only a 401K yet their vehicles are more costly than those sold by their domestic competitors. One can prove that to themselves. Get a total drive home price for any Toyota then do the same for a domestic of the same size and with the same equipment. The difference is at least 20% less for a domestic
While most of Toyotas growth in the US over the past few years has been in SUVs and trucks, their full size trucks do not even come close to those made by GM and Ford. Because they do not build full size trucks around the world they can not take advantage of the worldwide economies of scale. The fact that Toyotas full size truck sales only accounts for around 5% of the US truck market, while Ford has 35% and GM 30%, is the proof.
The fact is every manufacturer is building good quality, reliable vehicle today. Toyota has the advantage of a reputation for quality that is more myth than fact. In 2006 Toyota was number one in recalls. Toyota has the advantage of a reputation for fuel economy that is more myth than fact, as well. While it is true that Toyota sells midget cars from Japan in the US that get great fuel economy, that are not generally available from GM and Ford, their other vehicles are not better or even as good than domestics on average. Particularly when one consider the lack of power compared to domestics in the same price range. GM for example sell more models that get 30 MPG or more, than does Toyota.
.Mike.

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On Sun, 18 Feb 2007 11:34:09 -0500, "Mike Hunter"

Not all Toyota's fault. The Corolla plant in Canada has many very happy employees - making the kind of money they want to make, and cars that we want to buy (and you Americans do to). Another plant is being built in Ontario, along with the Hino truck plant. Your Toyota pickup trucks are built in the US, and even designed there. If there is a 20% premium in price, there MUST be at least a 20% premium in quality, because Toyota is beating the American manufacturers soundly at their own game. Where the profits go is IMMATERIAL as the US auto industry has, according to their own records, FAILED TO MAKE A PROFIT for several years. At least the Japs, in MAKING A PROFIT are adding more jobs in north america, rather than removing them. (Yes, North America is bigger than the USA - Live with it.
(Ducking and running for cover in my Nomex skivvies)

--
Posted via a free Usenet account from http://www.teranews.com


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<clare at snyder.on.ca> wrote in message

The bottom line, that Mikey keeps ignoring, is that the Customer is the final, repeat final, arbiter of who succeeds and who fails in the auto industry. The Customer has decided that Toyota and Honda give much better value than Detroit offerings. The final arbiter of success or failure has spoken and Mikey, although he is still in denial, has to live with it whether he likes it or not.
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http://www.freep.com/apps/pbcs.dll/article?AID=/20070218/COL06/702180693/1014/BUSINESS01
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Well said Jim. For over 12 years Mikey Hunter has steadfast refused to accept that Detroit was heading in the wrong direction. And, even at this critical hour he has chosen to bury is head in the sand and offer excuses. Many times I get the feeling that he actually have some gripe against Ford and really wants them to Fail and go Bankrupt. How else could anyone be in such blind Denial of what is happening. Take away fleet sales and you see how dismal the sales of the Ford 500 has been. For those of us who have been fortunate to travel to Europe and Australia/New Zealand, knows that Ford does very well in those regions. So why was US customers treated so badly? The main reason is, those marketing execs had come to think everybody wanted a SUV/Truck and they ignored the cars until it was too late. If you have two restaurants on a corner, And one serves food that taste like garbage at a lower price, while the other serves food that is tasty at a bit higher price, which one do you thing will likely get more customers(all other things considered equal)..???
I guess most rational persons would agree on the better tasting food.
I still believe in Ford, that is why I criticize them, in the hope that somebody is listening, and will finally say " we can do better, and must do better, otherwise we will not survive.."
VB Mercon
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Mike Hunter wrote:

Why do Ford and GM have to sell their cars for 20% less than Toyota does? There was a time when Toyota couldn't get Americans to buy cars except by undercutting them on price.

Equally good in quality and reliability? I don't think so.

Why don't the dealers that sell both Toyota and an American brand think so?
Why don't GM and Ford think so?

I saw an ad in an old magazine, probably from the 1970s, where American Motors boasted having the lowest rate of recalls. Apparently this wasn't due to high quality but a model line-up consisting of only older designs.

I don't know of anybody who thinks that current Toyotas get better fuel economy, but they buy them anyway.
It's pretty bad when customers are willing to pay more for your competition's products.

You've mentioned that before, but you never explained why Japanese cars tend to accelerate adequately even with their base engines, while Chrysler and American cars equipped similarly tend to be weak and actually consume more fuel than when equipped with larger engines.

Isn't that mostly because GM simply sells more variations of the same design? For example, the Chevy Malibu, Pontiac Oprah (G6), and Saturn Aura are all very similar.
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Well, the capitalization (the value of all the share of its stock) is higher than GM, Ford, Honda, Diamler-Chrysler and Nissan. Combined.
Read more about how Toyota became so big that it is expected to surpass GM as the world's #1 automaker this year: http://www.nytimes.com/2007/02/18/magazine/18Toyota.t.html
Jeff
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