A Modern Parable: The Auto Industry bailout
 

A MODERN PARABLE . . .

A Japanese company ( Toyota ) and an American company
(Ford) 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 8 people steering and 1 person 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, 3 area steering superintendents, and
1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 1 person
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 rower.
There was discussion of getting a new paddle , canoes, and other equipment,
extra vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance,
halted development of a new canoe, sold the paddle, and canceled all capital
investments for new equipment. The money saved was distributed to the

Senior Executives as bonuses 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 are now
applying for a "BAIL OUT"!

thats a great story.. it needs to be dumbed down a bit more for the average american to understand it..

if most americans knew the simplified reasons for a lot of the economic issues, i have a feeling that they would march down to washington and burn it to the ground.. :2 cents:

All you need to do is watch the movie Gung Ho, its all there, except for the fake ending where they succeed.

It's insane to watch companies send their production outside the country, and then import it back in. ALL the money is being send out of the country, and its creating a really fucked up trade deficit - and now they try and fix it by borrowing more money from the FED... who are these people?

The best thing you can do is, buy Japanese cars build in the US, and let GM and Ford go bankrupt. The chinese or someone from India will buy whats left over, but at least its not costing the Taxpayers as much.

The key difference between TOYOTA and the big three American automakers?

UNIONS.

Period.

Yep, I am actually surprised the Japanese have not gotten into the jetliner business.

plenty of planes get build in japan :) Kawasaki was (and is) one of the companies that helped push the aviation business further, and spread the knowledge to the mainstream corporate production

honda is producing a micro jet...

And if you look at the electronics in most planes(exept russian), you will see the JAE brand on it = Japan Aviation Electronics

I mean more like Boeing and Airbus, commercial airliners.

Most of the Boeing 767 and 777 are build by Kawasaki, and some of the larger Embraer's as well. It's just not labeled as Kawasaki.

there is no way that people could have seen what i've seen in my lifetime of growing up with a whole family and all their friends in unions and not understand how totally counter productive they are to business without being a totally useless human being or 1/2 communist. period.

and good for the Japanese... they brought much more efficient methods of production to the country where they beat the big 3 at their own game and build factories here to save additional costs and drive them right into the ground.

i hope the big 3 auto manufacturers die. they are a massive symbol of much that is wrong with our economy and workers mentality.

the US has been losing to the Japanese for over a couple decades... time to call it what it is... pull the plug on these idiots and move on.

I'm 38 and i haven't owned an American car since i was 19. Given what i am seeing today with a bunch of retarded jackasses and unions asking for billions of my tax money to subsidize their incompetence and ineptitude and laziness, i will never buy an American car in my life.

Unions once served a purpose. Working conditions were terrible in the pre-union days. I'm not sure what would happen if they were gone. Would workers lose some of the rights they have gained since unions have been around? I don't know but they at least need to be reformed if they don't want to continue to be a drag on business. Anyways, its impossible for American/Canadian companies to compete with cheap foreign labour, unions or no unions.

"once" - agreed.


what rights? you mean the ones that contemporary labor laws and safety standards guarantee?

unions can't be "reformed" in my opinion... the very existence of a union and its M.O. is predicated on the idea that "its us against them and we're being treated unfairly and the Union can save you". you can't "reform" that mentality... anymore than you can compromise with an islamic extremist who wants you dead because you don't share his beliefs.

no its not, its poor planning and lack of innovation.did you know toyota offered to partner hybrid technology to gm.their response at the time was it doesnt fit in our business model. Now tell me what the unions have to do with that?

You forgot a few items.

US automakers:
Pensions and Healthcare for the retirees.
Unfair trade agreements/tariffs

Toyota:
Culture. Toyota views employees as disposable and treats them as such.
Also...Toyota management despises all North Americans. You have to see it to believe it. There is a deep seated hate for us.
I know, I worked there.

furthermore, unions have to push for greater and greater demands every time a contract is up to remain relevant. iif they dont... why be a member of a union when you're perception is that they are not doing anything for you? that is also part of the problem.

Plus, management continues to pay themselves exaggerated salaries with fat bonus's and stock options even when the companies aren't doing well. Cutbacks, and restructuring followed with a management performance bonus for meeting the workforce reduction target...we have seen that time and time again.
There are 2 sides to the coin.
Both union and management need to work together and take concessions if a bailout has a chance to work. Otherwise...bankruptcy.

bailout to work?

fuck that. those fucking idiots ALL deserve to be unemployed (employees and management) and the nation will be better off for it.

we don't live in the soviet union or red china... i'm not working my ass off to subsidize the incompetence and idiocy of others.

Exactly my sentiments. :thumbsup

Poor planning and dismal innovation plays a part - but I say its secondary to the greed of the unions.

I work there right now... I haven't really seen any of this before. Can you explain your reasoning?

The car companies don't want a "bailout" - they want access to credit.

This is the part of the credit crisis that everyone is ignoring. Big corporations are the biggest players in the short term lending market. Who do you think borrows the money that generates returns for money market mutual funds? Commercial paper, corporate bonds, money market funds - giant corporations need access to these credit streams to meet their cash flow needs.

If you want to find out how much big companies use these financing channels.. go to an annual report and find the "statement of changes in financial position" section and look under "financing activities".

Managing cashflow is a major operation an a company with 150 billion + in revenue. The credit crisis has destroyed these financing sources. Hundreds of billions of dollars have come out of money market investment funds, corporate bond ratings have been destroyed, banks have stopped being market makers for commercial paper, bonds, etc..

Auto companies cannot reorganize under chapter 11. They do not provide a service like an airline - if any one of the big 3 goes bankrupt they are gone FOREVER. no one will buy a car from a bankrupt company, it won't happen.

Giving the auto companies access to credit to save their operation has a direct effect on jobs.. not like Citigroup which just took 20 billion dollars AS THEY LAYOFF 50,000 people. Providing 25 billion in credit to the auto companies will save millions of jobs.

In Canada, the gov't gave GM a couple hundred million a few years back...and GM promptly laid off hundreds of workers and shut down major production lines in Oshawa and St. Catharines.

This week General Motors in St. Catharines was shut down entirely as part of a rotating shutdown schedule. There is no optimism amongst employees that this won't become a more permanent arrangement (with or without a bailout).

Credit is given with the implication that it'll eventually be paid back.

I don't see that happening with General Motors.

Sure...I worked at Toyota Technical in the design engineering center and the management made no effort to hide their distaste for the N.A. employees. If you were a Japanese contractor they had no problems with you. If you were a N.A. contractor they treated you like garbage.
They refused to talk directly to you, instead they used an interpreter even though they spoke perfect english.
No eye contact with you.
They wouldn't respond when you greeted them. example: Good Morning
Never said please, thank you, etc...
They made certain you understood they had a "Us" and "Them" attitude.
Refused to discuss needed details about the job. Instead you had to deal with the interpreter that almost always knew nothing about the job.
I could go on an on......

I have worked with automotive design and engineering staff from all around the globe, and they were by far the rudest bunch I have ever had to work with. But....they do produce very nice vehicles.

Sorry you have to work there. Good luck with that.

Let's also not forget GM had one of the first production-line electric cars (probably the first since the early 20th century when electric cars were more common).

What did GM do with this incredible and futuristic vision? They sent it to the scrap heap.

I'm sorry guys, I'm a proud American. I believe in well made American products like porn, Leatherman tools, outlaw motorcycles, Kentucky Bourbon, Tilamook Cheese and Zippos. World War 2, the cold war, and the space race taught me that Americans can design and build some of the best and most fascinating machines in the world.

However, most new American cars I see are overcomplicated and unreliable. My friend Chris Lowden was driving a rented Ford Taurus. The engine spontaneously caught fire and the vehicle self destructed. When requesting a replacement vehicle, customer service asked what type of car she would like, Chris responded with "ONE THAT DOESN'T BURST INTO FLAMES!"

If America can design and build an efficient, reliable car that will last 10 years or 300,000 miles, I'll buy it. Until then, my next car's a Toyota or Honda.

jap men have very small cocks..

you would be angry too....

Ford makes a car called the UK called the ECOnetic -- which is a diesel car that gets over 65mpg. While VW is busy selling their diesel cars in the US market, Ford wont bother as they don't think anyone will want one. The prefer to try and market their existing range of cars as 'fuel efficient' (LOL), because they do more than 28mpg (30mpg).

Ford sucks. They have something they could try and sell, but will not bother.

In a market economy, if you make things people do not want -- you die. Unless you can trick your government to bail you out, at which point it is no longer a market economy but subsidized industry, like Fiat, etc. etc.