Big Three Blues
It's a great time to buy a car but
a lousy time to make one.
Scott Paton
spaton@qualitydigest.com
I just bought a new car. Actually,
it's one of those ridiculously huge SUVs that I swore I'd
never own. It's a gas-guzzling, environmentally unfriendly
vehicle that needs a tugboat to nudge it into the garage
at night. My new 2003 Ford Expedition's got all the bells
and whistles, too: leather interior, six-CD sound system,
heated and cooled seats, onboard nuclear reactor…
it's deluxe.
I'm sure I'll face the wrath of Earth First, but I really
like the car. It's comfortable, and it accommodates my family
nicely. I bought "The Beast" (my pet name for
it) for two reasons: First, there are some nifty, obscure
tax breaks available to business owners who buy ridiculously
huge vehicles. (I'm proud to be an American, but I'd rather
drive around in my capital than give it to Uncle Sam.) Second,
and unfortunately for the Big Three, their suppliers and
the United Auto Workers union, U.S. cars are just plain
cheap right now.
It's a great time to buy a car but a lousy time to make
one.
Despite near-record sales, the Big Three are selling automobiles
for less than they cost to make. And although the domestic
automakers seem to be holding on, their suppliers aren't.
Squeezed by the OEMs, suppliers are filing for bankruptcy
at alarming rates. Almost none of them made a profit last
year, even though it was a record year for vehicle sales.
Obviously, this cycle can't continue indefinitely.
I have to admit that it's a bit unsettling for the editor
of a magazine devoted to quality to see the country's largest
manufacturing sector hurting so badly. I've met a lot of
people from the automakers and their suppliers. They are,
for the most part, smart, hard-working people who want their
organizations to succeed. But U.S. automakers still lag
behind the Japanese in quality and continue to lose market
share.
Japanese automakers captured the attention of the Big
Three in the 1970s, when they began stealing market share
with cheap and reliable vehicles. But that was 30 years
ago. Surely the Big Three would have found a way to compete
with the Japanese by now.
They tried copying them with small, disposable (and crappy)
cars. Remember the Vega? In the 1980s, the automakers discovered
quality. One even made it "Job 1." (Apparently,
whoever's job it was called in sick a lot.) They tried quality
circles, total quality management, reengineering, statistical
process control, benchmarking and design of experiments.
Later, they hopped on the ISO 9000 and Six Sigma bandwagons.
They even got together and developed their own standard--QS-9000--hoping
to provide their suppliers with a uniform set of requirements.
Apparently, the latest strategy is to give the cars away.
Although it worked for me, I don't know how well it's working
for Ford.
I'm not knocking any of the aforementioned strategies
(except, of course, for building crappy little cars). But,
I am amazed that after 30 years of effort, it's still so
difficult for U.S. automakers to build vehicles profitably.
I can't blame quality methodology. I can't blame U.S. workers--Toyota,
Honda, Nissan and others build high-quality cars profitably
in the United States. I can't even blame U.S. management.
GE manages to build and sell world-class products and services
quite profitably.
So who is to blame? Is it a quality failure, a management
failure, a cultural failure, an education failure? Or am
I completely off the mark? Let me know what you think. E-mail
your comments to spaton@qualitydigest.com
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