Inside Quality Insider

  |  09/30/2009

Detroit Automakers Cannot Afford to Repeat Quality Errors

Hindsight yet to be seen

For some time, auto experts have reported that objective quality differences have all but disappeared across most automotive brands. Indeed, the Detroit Three automakers have eliminated or substantially reduced large differences in defect rates after 90 days of ownership—no small achievement.

Yet, surveys continue to show that consumers consider quality an important factor in deciding which vehicle to purchase—and still give the nod to the Japanese and some other foreign automakers because of the power of past quality perceptions.

We are left with an intriguing question: Why has it taken Detroit more than a quarter of a century to close the gap? If we are skeptical about the latest claims, exploring the reasons for Detroit’s long road to quality parity may shed some light on the remaining challenges Detroit faces. It can’t afford to repeat its quality mistakes.

When the Detroit automakers did demonstrate bursts of dedication to quality improvement, these periods were followed by relapses and shifting priorities.

In the early and mid-1980s, the Detroit Three aimed to “leapfrog the competition” through investment in robotics, symbolized by General Motors Corp.’s Hamtramck plant. Throughout that decade, they argued that their real competitive problems with Japanese automakers were rooted in the different tax structures of the United States and Japan, as well as the low productivity and high wages of autoworkers. In the mid-1990s, they saw “going global” as the answer and invested massively abroad.

Second, it took time to recognize what made the complex Japanese production systems work. The U.S. management looked for a “silver bullet” approach that would improve quality, while the Japanese consistently pursued their holistic, incremental “improvement culture.”

To this day, the lessons of Toyota’s success and the discipline they require have not been completely implemented by Detroit and some other Japanese automakers. Detroit’s inability to fully unravel the mystery occurred because it had to rely on written descriptions, inexperienced consultants, and the experiences of the initial U.S. nationals working for Japanese firms; and the continued evolution of the Toyota Production System makes it an ever-moving target.

Third, the high profits for creating or expanding sales within particular truck segments diverted the Detroit Three’s focus from quality efforts. Chrysler introduced the minivan in 1983 and concentrated on improving its successors. Pickup sales grew steadily, protected initially by 25-percent tariffs on Japanese imports. Ford helped launch the SUV movement by introducing the Explorer in 1991.

It took the leading Japanese makers some time to become competitive in each of these truck segments, shielding Detroit from direct Japanese quality competition. The U.S. automakers were satisfied to be dominant in the growing truck market, even if the Japanese share in passenger cars continued to grow.

The quarter-century that it took to address the quality gap has severely damaged the Detroit Three. A reputation for quality is a formidable competitive advantage for an expensive product.

The experiences of the Japanese and Detroit Three automakers show us that achieving high quality requires time, consistent effort, and management leadership. If Detroit is to regain its reputation as the leader in quality, it cannot afford to let its efforts be delayed or deflected again.

This article first appeared in The Detroit News.

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