Lean Manufacturing

It is Not Enough that Toyota Succeeds, GM Must Also Not Fail

By Jon Miller Updated on May 11th, 2017

On Monday April 25th 2005 Chairman Hiroshi Okuda of Toyota gave a speech to the Nippon Keidanren (Japan Business Federation) in which he said “we are concerned about GM and other automakers” and called on Japanese automakers to help out struggling automakers such as GM and Ford. Chairman Okuda was referring to General Motors has posting losses surpassing $1 billion for the quarter, and GM’s deep structural problems that underlie this performance.

Toyota is basically offering to help make GM healthy again in the spirit of Kaizen. “We should give them a little time to breathe,” Okuda said. His specific proposal was to raise prices for Japanese cars imported to the U.S., presumably to make American automobiles more attractive to consumers, but may also include technical assistance. No doubt this would include instruction in TPS and kaizen.

This reminded me of a cartoon in the New Yorker magazine. Two dogs in business suits are standing at a bar drinking cocktails. One dog says to another with an evil grin, “It’s not enough that we succeed. Cats must also fail.” While this is funny, in America too often this is the ethic with corporations and CEOs who act in predatory if not cannibalistic ways towards the competition, their employees, and the environment.

Compare this to Toyota. They have not had a layoff in over 50 years and they are leaders in protecting the environment through developing new technologies for reforestation of deserts. Toyota has turned their factories into “zero landfill” operations. Toyota is the most profitable auto maker with a market cap larger than Ford and GM combined. If you understand kaizen, and that Toyota has been doing it for 50 years, it is no surprise.
Toyota certainly knows that GM, Ford and their supply base are major employers in the United States (the world’s biggest market for automobiles). Stability and strength in American industry is a key to a strong U.S. market for Japanese cars (now accounting for 30% of the cars sold). There is a profit motive behind this helping hand from Toyota, but one that reflects deep though and consideration of the long-term rather than a dog-eat-dog (or cat) short term mentality.

When Toyota offers to help GM with technical assistance and kaizen, I hope GM accepts, for the sake of America.

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