Ford vs. Toyota parable

This is a few years old so the "data" is old but the theme is still valid, at least in GM's case. In my experience, 15 years with GM, you can substitute GM for Ford throughout the piece and it still holds true. :D



A Modern Parable.

A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River
Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid-off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment.The mone y saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India.

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses...

IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

Just a thought, I worked at GM 32 years, the thing I remember is when R. B. Smith was CEO. Profit became KING.
In 1970, GM ha about 3,500 execs, who's salaries averaged about 23 times what the roughly 750,000 hourly people made. In 1993, when I retired, GM had over 8,000 execs, who's salaries averaged over 100 times what the roughly 375,000 hourly workers made. GM says 19 per cent of their costs are caused by labor, they never mention that their execs are a large part of that cost.
The Japanese, on the other hand, while paying their hourly ates about 4 dollars less an hour, with comparable benefits, pay their salary people according to their benefit to the company, and nobody gets the amounts GM gives out.
Just my .02.

john

I'm sure its more of the same today but i can't find the executive staffing levels for GM in 2008 or 2009. They post having 29,500 salaried employees (soon to be 26,000 due to job cuts) and having around 60,000 hourly employees. They want to be down to 38,000 hourly workers by 2011.

One of the funny things I remember was when I retired, I went under a "50 and 10" plan, 50 or older and more than 10 years with GM. They (GM) wanted to cut 3 to 4 thousand hourly workers, and said no one would be turned down. They lost over 21,000, and ended up having to hire people to replace them. As always, really good planning. Oh, yeah, I worked in the Pontiac foundry, the only one GM had that was showing a profit, in the late 80s, they closed it and tore it down.

john

Quote:

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Originally Posted by retread

One of the funny things I remember was when I retired, I went under a "50 and 10" plan, 50 or older and more than 10 years with GM. They (GM) wanted to cut 3 to 4 thousand hourly workers, and said no one would be turned down. They lost over 21,000, and ended up having to hire people to replace them. As always, really good planning. Oh, yeah, I worked in the Pontiac foundry, the only one GM had that was showing a profit, in the late 80s, they closed it and tore it down.

john

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I like the sounds of that 50 and 10 plan. Hopefully they'll resurrect it when I reach 50 (in five years). I guess the first thing I should hope is that they are still around in five years. :D

I see this everday day were I work also :ani29: