NY Times, USA Today, and NPR Report on Toyota
1 — ‘Slow and steady' drives Toyota's growth – (USA Today)
2 — Toyota Closes In on G.M. (NY Times, requires free registration)
3 — Toyota Powers Ahead at Kentucky Plant (NPR)
This is probably my final post until next week, Happy Holidays to everyone.
Two articles above talk about the potential for Toyota to become the #1 automaker in the world in 2006, between their planned production increases and GM's planned production cuts.
This is old news if you've been a regular reader on this blog, as I posted a link to this last month. I won't gloat about the slow cycle time of the “mainstream media.”
The NY Times article dumps on GM, via a familiar name:
“G.M. is not the company it used to be, and it's not going to be what it was ever again,” said Jeffrey K. Liker, a professor of engineering at the University of Michigan and the author of “The Toyota Way,” the best-selling book that examined the Japanese company's management principles.
Toyota people seemed sensitive to how their rise to #1 is portrayed, not wanting to gloat or claim victory.
At the news conference in Nagoya, held to announce the company's plans for 2006, Toyota's president, Katsuaki Watanabe, repeatedly played down talk of a race to the top.
“Whether Toyota is going to become No. 1 in the world or not is not something that I know,” Mr. Watanabe said. “I am not conscious if Toyota is going to become No. 1 in the world or not.”
Another friend of this blog said:
Toyota's growth plan, however, speaks louder than its caution, said James P. Womack, an author and expert on manufacturing efficiency. “I think they think they're at an unavoidable point,” Mr. Womack said Tuesday. With G.M. traveling in reverse, “it's less awkward to get over in the left lane and just pass,” he added.
The USA Today article takes a deeper look into the traits that contribute to Toyota's success, including:
- Paranoia. “Toyota is the biggest worrier on the planet,” Womack says.
- No layoffs. Toyota doesn't promise lifetime employment, but it has managed to avoid layoffs because of its growth.
- Long-term focus. Instead of a fixation on quarterly profit, Toyota is known for looking out years, even decades, in product development and master planning.
The article brings up a recently familiar theme about whether or not Toyota can keep quality levels the same and keep their Toyota Production System consistent.
Can the company keep pace? Some see a strain already. “Their system is stretched,” says David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
European chief Shinichi Sasaki was quoted in the Financial Times last month as warning that new factories outside Japan with quickly hired new workers smack at the culture of “built-in quality.” Sasaki, the group's former head of quality, noted that rivals are challenging Toyota's high J.D. Power ratings.
Another quote that really hits home:
To Detroit in the 1980s, gripped by fears of Japan Inc. and enthralled with the notion of automated assembly lines, the answer to quality appeared to be factory robots. Toyota, however, has looked to the human factor.
The National Public Radio piece (you can listen or read it) discusses how Toyota is resisting unionization efforts, but pays employees very very well. Some raise issues about how Toyota treats workers, do they work them too hard or treat them badly when injured.
Gary Chaison, who teaches industrial relations at Clark University in Masachussetts, says Toyota and its peers also try to treat workers well, take their opinions into account and give them a stake in the plant's success.
Despite the wages, some Toyota workers say they need a union. They complain the company drives them so hard that people get injured, and when they can't work anymore, Toyota pays them off to leave.
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Why is Toyota gaining success? Interesting question. As many bicker about the shape of our domestic economy, many in politics are trying to help out. However, what are our own American domestic companies doing to improve their own situation? Are foreign companies actually creating more jobs in domestic America than our so-called ‘Buy American’ companies? Many believe they are, and this is creating buyer loyalty. Can Ford and GM reagain their dominance? What do you think?
I’m inclined to agree with you. All I ever hear in the news is about Ford and GM laying off more workers. I hear about their quest to outsource more labor and move manufacturing out of the country. At the same time, Toyota is building more factories in the U.S. and hasn’t had a layoff when founder Kichiro Toyoda resigned in 1948 and convinced 1600 workers to voluntarily retire with him.
Down under, i think we are challenged by what the chinese are doing with lean mfg – a double whammy in terms of relatively cheap labour (<20% of our cost) combined with adoption of lean mfg principles. LOOK OUT!!
I do agree that the Chinese present a strong market that is improving in quality and productivity. That said, they do have a very long way to go. The main challange I see to their growth is the infrastructure. They must continue to expand their power generation and port capacity, as well deal with the pollution and social unrest these expansions cause.