Dark Outlook for Non-Lean Car Makers
I received an email from a blog reader, Jack, from Tampa FL. I assume he's from outside the auto industry and he wrote:
I can't say for Chrysler exactly, but I'd suspect the issue is that the old “Big 3” did more to try lean tools than they tried lean philosophies or lean management methods. It's too difficult for management to look in the mirror and say “we need to change.” I actually had an amazing NUMMI-trained plant manager at GM who told the entire plant “It's not the workers that we need to change, it's the management system that needs to change. A new management system (TPS) will lead to better results. It's been management's fault.” Alas, he retired as a plant manager rather than moving higher up, maybe because he spoke the truth.
How much does it help Chrysler to have a CEO, Tom LaSorda, who is a manufacturing guy and a lean believer? I doubt LaSorda has been there long enough to really change the culture.
“Legacy costs” are a tired excuse in the auto industry. Toyota might have some lower labor costs ($47 vs. $65 an hour, including benefits), but they also command a higher price for their vehicles, signifying the value creation that comes from the Toyota Production system, developing the right cars for the right markets, etc.
As Womack claims in his article, he told Ford and Jac Nasser that they had to overhaul the whole business (not just the factories) and to adopt the Toyota management system, true TPS. That was “too hard.” So, you dabble with a few lean tools, you even create something called the “Ford Production System,” but did they really change the way they manage? Did they really get the most out of their employees' ideas, to drive continuous improvement? Probably not.
What do folks in the auto industry think? How would you answer Jack's question?
One other thing the WSJ article points out, there are still about 1 million auto workers in the U.S., same number as in 1990. It's just fewer of them are employed in the Ford, GM, and Chrysler value chains and more are employed by Toyota, Honda, Nissan etc. and their supply chains/suppliers.
When the WSJ article says “U.S. car makers,” I think they really should have said “Non-Lean Car Makers.” Toyota is doing quite well in the U.S. They have American workers, they just said “no thanks” to the typical American management model.