Ford and Toyota - A modern parable

**scharnhorst** · December 26th, 2008 07:40 PM

From an email I recieved (sana hindi pa ito napopost, nagsearch muna ako dito)

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 new paddles, 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 paddles, 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 toIndia.

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.

Considering that the blue oval is in the "best shape" among the big three. (Personally, I wouldn't want them to go under)

Not really that much figures or sources... but it's a parable and should be treated as such.

**Jun aka Pekto** · December 26th, 2008 09:39 PM

Damn UAW. I don't think the Japanese and Koreans have to deal with them.

**drey** · December 26th, 2008 10:07 PM

Heheheh... Nice parable! True!

**FWC** · December 27th, 2008 03:29 AM

Originally Posted by Jun aka Pekto

Damn UAW. I don't think the Japanese and Koreans have to deal with them.

Very true! Add to that the fat salaries and over generous perks of their managers and executives and you can foresee that they had it coming. But in the end, yung rank & file lang palagi ang tinatamaan.

The same thing happened to several consumer group companies in the country. Colgate Palmolive, Procter & Gamble, J&J, and even to a certain extent, Nestle and Kraft. They had such strong unions that every CBA negotiations, the salaries of the employees just kept going up. Unfortunately, the productivity level of employees failed to keep up with their salary increases. In the end, the cost of manufacturing became so high that it was cheaper to import them or have them toll-manufactured. As a result, ang dami ng nawalan ng trabaho. The proverbial, "...killing the goose that lays the golden egg."

**scharnhorst** · December 27th, 2008 05:33 PM

Unheard dito yan sa pilipinas a... "overpowered labor union"

**Gen. Miting** · December 28th, 2008 06:25 AM

eh wala yan dun sa agency that is tasked to clean the laguna lake. 4,000 employees and almost a billion funds later, ang sabi ng top exec kulang pa din daw resources nila to clean laguna lake, kasi napunta lang daw sa sweldo ng 4000.

**scharnhorst** · December 28th, 2008 10:19 AM

Originally Posted by Gen. Miting

eh wala yan dun sa agency that is tasked to clean the laguna lake. 4,000 employees and almost a billion funds later, ang sabi ng top exec kulang pa din daw resources nila to clean laguna lake, kasi napunta lang daw sa sweldo ng 4000.

Ganyan talaga pag procurement ng gobyerno natin. Overpriced na nga, wala pang kwenta!

**Negus** · December 28th, 2008 12:18 PM

Japan Airline's CEO Slashes his Pay Below the Pay of Pilots
[ame="http://www.youtube.com/watch?v=WYSZ8TUa3Vg"]YouTube - When is the last time you saw such a CEO?[/ame]

Toyota and Sony just recently cut around 15,000 jobs last time I heard. And I'm one of the casualties. ang hirap talaga pag contractual ang trabaho.

My brazilian and american colleagues who recently became regular employees at Aisin (we work under the same engineering agency) are sadly offered "希望退職”　(voluntary retirement) in a very polite way or else they will be fired. lahat talaga apektado, even my dream of studying the language next year, napurnada.

**scharnhorst** · December 30th, 2008 08:45 AM

^^ wow. talk about down to earth.

I'm scared for 2009 as well. Our family relies heavily on an american-based manufacturing firm for our income

**niky** · January 3rd, 2009 03:25 PM

Originally Posted by scharnhorst

Unheard dito yan sa pilipinas a... "overpowered labor union"

Workers from factories closed by the KMU's aggressiveness would beg to differ...

Toyota's US costs are much lower than Ford's, because they started from a clean-sheet and aren't tied to the UAW. UAW workers for Ford and other domestics receive around $4 an hour more than their counterparts at Honda and Toyota factories in the US. That's maybe a 10% difference... not including the other non-salary perks and pensions that Ford is paying out. That's why it does cost them too much to build inside the US.