Friday, December 22, 2006

Here Comes Toyota

Toyota will become the number one auto maker in the world, sooner rather than later.
Toyota announced on Friday a global production target of 9.42 million vehicles for next year, increasing the odds that the Japanese manufacturer will surpass troubled General Motors Corp. (GM) as the world's No. 1 automaker.
Although Detroit-based GM says the perception that its cars are gas-guzzlers is unfair and inaccurate, it is undergoing massive restructuring after racking up more than $10.6 billion in red ink last year and $3 billion more the first nine months of this year.

Toyota, on the other hand, is on a roll, reporting record profits, churning out best-sellers like the Camry and Corolla as well as carving out a reputation in hybrids, which use a fine-tuned technology of switching between a gasoline engine and electric motor to save gas at a time when oil prices are rising.
There will be no growth without quality," Watanabe said, adding that quality will be closely monitored at all levels of production, including design, development and procurement. "We'd like to continue our efforts to make good products that win support from our customers."

Although Toyota's production methods, which empowers assembly line workers and trims inventory, are praised by experts, transporting that production to new places remains a challenge.
Here's the thing: Toyota has exported its management and production philosophy all over the world and achieved upwards of 96% of the productivity seen in Japanese plants. They do it with local management and local labor. They do it with and without unions. Therefore, I can only conclude that it is the failure of American automakers to match Toyota's skills that is killing American manufacturing, not just in the auto industry. As I noted here, American management has had its change to learn from the Japanese, but has not.

Shame on us.


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