Speechless

[Bearshrimp]

US management gets much much higher pay and bonus

Right, just wanted to avoid sounding like an Occupy Seattle guy. The CEO for Toyota makes about $1M per year. Thats about 1/48th the amount of comp paid to GM's CEO before they went TU.

Diffrent priorities aparently.

 

[4Runnerspv]

Congrats on the TE! you will LOVE it!!

 

[1000MPH]

This American Life has great article and audio on Toyota taking over the management of the GM plant in Fremont, CA (NUMMI).

 

[KCcarguy]

^^^^awesome post. Everyone should listen to this before buying a car.

 

[homeyclaus]

It’s not the workers that determine the quality of manufacture. The 4Runners are “better built” because:

Engineering
The engineering behind them is better tested and generally well thought out.

Production
The Tahara plant has a relatively slow moving production line and is almost completely automated. That’s why most of the holes for fittings on the 4Runner are round rather than oval, with an all robot crew you can have much tighter tolerances.

QC
Toyota quality control is meticulous

Subcontractors
Toyota uses subassemblies produced by Toyota and Toyota subs rather than independent contractors so it can hold the individual sub assemblies to the same QC standards as its vehicles. This one is interesting from a manufacturing management POV. It’s the main reason (IMHO) that Boeing QC took such a hard hit on the 787 after the acquisition of McDonnell Douglas.

I am going to agree with you all the way up to here.

It all comes down to money really, Toyota is just willing to put more money into product development and production than US manufacturers. It lowers the net profit per vehicle produced but Toyota sees the reduction in cost as an investment in the Future of the company, ensuring that it maintains its reputation of quality.

For a lot of reasons (I won’t go into here), the US manufactures are seeking the highest return possible on each vehicle sold. You can either do that by raising prices (which is unacceptable) or lowering the costs associated with production and product development.

You're talking about the well-known and studied fallacies of cost accounting.

In all reality there is a quality feedback cycle. At Toyota, they took the time to get it right just in case they ended up selling a lot of vehicles. Then they sold a lot of vehicles, making the time it took to get it right a worthwhile investment because they've lowered the costs on their dealer chain (warranty) and increased their goodwill (reputation of quality). Now that they sell a lot of vehicles, they no longer can afford to NOT take the time to get it right. Some part of this is also the Japanese collective aversion to shame when it comes to their work.

Toyota (and the other Japanese manufacturers) are also very quick to investigate sudden improvements in quality (as demonstrated by their investigation of the Corona plant in the UK and why it had "only" the same number of defects per vehicle as their best plants in Japan). Some will write this off as "gaijin can't work as hard as a Japanese worker" kind of thing, but Toyota came away with a number of lessons from their UK experience, and applied them elsewhere.

American management does not see the world like that. It's a cost-benefit of quality and service costs. The focus on costs means that generally the little things that make substantial improvements will not be implemented if their cost is greater than or equal to zero, no matter what the positive effect. Add the fact that the structures imposed by the UAW run counter to product quality improvements, and the result will eventually be a K-car. Note I did not say unions are bad, just the way the UAW and labor relations is structured in the US auto industry is counter to the goal of producing a quality product.

Don't get me started on the Germans.

So, Toyota just puts a whole lot more time and money into product development than the US manufactures do because US management didn’t see the point in investing in product development.

Maybe following the bankruptcies of GM and Chrysler they will start.

Ford did, and it's paying off for them. And then the government rewards GM and Chrysler for their failure, which in turn punishes Ford by proxy. What kind of message does that send?

On the buy America thing, the cars may be built here, but all the profit from manufacture flows back to where the parent company is listed (i.e. the stock exchange). Until Toyota and BMW are listed on the NASDAQ, most of the dollars spent on US built cars will end up in Japan or Germany.

Patently false.

I own Toyota stock, and get dividends. There is nothing to stop you from buying stock on any exchange in the world, and reaping the rewards.

 

[1000MPH]

I found the link for the Toyota/GM story.
NUMMI | This American Life.

 

[Bearshrimp]

You're talking about the well-known and studied fallacies of cost accounting.

Yes I was, just my spin on it :naughty:.

Ford did, and it's paying off for them. And then the government rewards GM and Chrysler for their failure, which in turn punishes Ford by proxy. What kind of message does that send?

Well, yes and no. I agree that Ford’s products have been much better developed and engineered than GM or Chrysler. Unfortunately my experience with Ford quality has been very poor primarily at the dealer/service level. I have owned 3 Fords (91 Taurus SHO, 95 Escort, 96 Mustang GT) and all of them had substantial (i.e. impacting drivability) issues in the first year of ownership. All of which were aggravated by poor customer service and the inability of the respective service departments (3 different dealerships) to correct the problems on the first visit.

Ford is a unique case because the largest individual shareholder in Ford is still the Ford family, so in many ways the family’s pride is still tied to the products. I Like Ford, at a corporate/product level, just not where the rubber hits the road (dealerships).

Patently false.

I own Toyota stock, and get dividends. There is nothing to stop you from buying stock on any exchange in the world, and reaping the rewards.

Sorry, looking back at my statement it is rather hyperbolic, I should have said “most” of the profit from manufacture flows back to where the parent company is located. Toyota Motor Corporation is traded on the NYSE, as well as the London Exchange and the Tokyo exchange. However its parent, The Toyota Group, is a horizontally organized keiretsu, the only one I think which is not organized around a bank.

Most of the profits from TMC flow up to the Toyota Group which intern is owned by Japanese rather than US institutional investors. The ownership chain is complicated (especially for Toyota) and is a little out of scope for the 4Runner forum.

My point was that having a car manufactured or assembled in the US by an overseas company does not convey the same economic benefit to the US as a US manufactured car produced by a domestic company. So, if one’s primary motivation for purchasing a vehicle is to support the US economy, then purchasing a Ford built in Georgia is “better” than buying a Toyota built in San Antonio.

 

[KCcarguy]

Most of the profits from TMC flow up to the Toyota Group which intern is owned by Japanese rather than US institutional investors. The ownership chain is complicated (especially for Toyota) and is a little out of scope for the 4Runner forum.

My point was that having a car manufactured or assembled in the US by an overseas company does not convey the same economic benefit to the US as a US manufactured car produced by a domestic company. So, if one’s primary motivation for purchasing a vehicle is to support the US economy, then purchasing a Ford built in Georgia is “better” than buying a Toyota built in San Antonio.

And after listening to the piece on NUMMI, why should I feel obligated to financially support a failing system that refuses to change? I know these guys say they've changed......like an X that's been dumped for cheating. When you listen to the story and realize how complex the problems are in "domestic" auto manufacturing.....there's no way these guys have really taken all the steps (company culture, product development, supply chain, labor) to produce a product on par with Toyota. It's too bad the bailouts happened, because I think we just enabled The Big Three to delay making necessary tough/ painful changes. I believe bankruptcy and restructuring is the only thing that will produce real change.

 

[scanny]

So, if one’s primary motivation for purchasing a vehicle is to support the US economy, then purchasing a Ford built in Georgia is “better” than buying a Toyota built in San Antonio.

I think that buying anything just out of supporting the economy is simply damaging for the economy. It sends sales driven economy wrong message - instead of focusing on quality they are going to focus on advertisements and sales bonuses. if we move that way long enough after awhile we'll have industry incapable to produce anything useful and unable to compete on world market.