Toyota Pulls a Detroit of Yesteryear

Once upon a time not so long ago there was a scary monster that ruled the land by seeding the world with its demonic like fire breathing spawn (cars). They used to call it the Detroit Big Three. Its children would roam the world devouring liquids (GM SUV) at every gas station, rusting (Chrysler) out right before our very eyes, and exploding in flames like a Phoenix (Ford Pinto) when offended by a fender bender. Till one bright and shinny day, a bunch of knights (engineers) from Japan decided that they could rid the world of these monsters by offering a tamed down domesticated version of the DBT from across the big blue sea. All was well with the world. The End… or was it?

Toyota has lost its way when it comes to quality and the only one they have to blame is themselves. It’s easy to be the number one car manufacturer in the world if you ignore your customers and just keep pushing out units as fast as your factories can make them. Toyota basically refused to look in its own rear view mirror. So when did Toyota stop following the “Don’t do what the DBT did” business formula? The answer to that question is simple. When profit was more important than the quality of their product. AKA, if you build it then they will buy it or being number one is systemic with built in arrogance.

"Consideration for customers was lacking in Toyota," Seiji Maehara, Japan's minister in charge of transport, said this week after the government learned that the carmaker had known for months about a problem of squishy brakes on its Prius hybrid.

Yet until the Japanese government pressured them to recall more than 400,000 Priuses and other hybrid models on Tuesday, Toyota executives had insisted that the braking issue was a matter of driver "perception."

In the United States, where years-old problems with a sticking gas pedal led to a suspension in January of the production and sale of eight vehicle models, Toyota had also neglected customer complaints, blamed drivers and was not forthcoming with federal investigators. - Washington Post

Recalling 400,000 cars is a huge admission of a serious quality control problem and that is not the way to keep repeat customers. Numbers of that size recall are nothing new to Toyota but seem to be the status quo. Going back to just August of 2006 it was evident then that Toyota had a quality problem and yet they still pulled a DBT. Has Toyota taken up the old DBT quality standard of built in product obsolescence? Could this quality problem be a precursor as to what will happen to Toyota jobs here in America?

At Toyota's annual executive meeting in June, its outgoing chairman, Hiroshi Okuda, its new chairman, Fujio Cho, and its chief executive, Katsuaki Watanabe, all vowed to the gathered managers that the quality issue would be addressed, according to a senior Toyota executive who attended the meeting.

"The quality issue is a big concern. They're embarrassed about it," said the executive, who insisted on anonymity because the meeting was private. He added, "You think about Toyota, and quality is in our DNA. We are concerned about looking like the rest of the pack. The market is forgiving because of our long reputation, but how long will they be forgiving?" - New York Times

There is a reoccurring pattern when it comes to the blame game at Toyota and that is and has been to blame its engineers. Yes, they do have some ownership but the boys in the executive branch are the ones making the decisions that the customers end up buying and owning. Companies like the “New” Toyota are their own worst enemies when they “choose” to ignore the reason they became successful to begin with. QUALITY!

Click on the link for the full list of the latest Toyota recall. And you can be sure that the insurance industry isn't going to miss a heartbeat raising your rates when it comes to your Toyota car insurance. Poor safety performance on any vehicle is too good of an opportunity for them to miss.

UPDATE 2/15/10: Toyota considers incentives to maintain customer confidence post recall according to CNN Money

Papamoka

***Washington Post has linked to this post... Thank you!

Kids Allowance Pulled at GM and Chrysler

There comes a time when every parent has to pull the weekly allowance to their child. When your child outspends or refuses to change spending habits you just can’t give them advances on their allowance month after month. Junior (aka your child) needs to learn the value of a dollar and seek out work to earn their own money to pay for those hundred and fifty dollar sneakers. Junior needs to know how hard it is to earn the dollars needed to pay for an expensive prom dress or tux. Junior needs to know that mom and dad can’t give them everything simply because they want it.

Even as liberal as I am, I have had thoughts of doubt about the recent bailout of the auto industries in America. The auto industry alone is so intertwined with many other industries in our nation that at times I honestly believe that we should be doing everything we can to save them. Then again, we can’t afford as a nation to continually poor dollars down a bottomless well. GM and Chrysler should have cut expenses and costs to the bone by now since the first Bush Presidential era bailout but they really have not. The United Auto Workers should be more than willing to work with them given the number of union members employed at both corporations but they are waiting for the next bailout as well to drop. Suppliers, distributors, show rooms and the list goes on should be contributing to the savings of these two companies but they are not. This all spells bankruptcy for both GM and Chrysler and maybe that is not a bad thing for them at this point in time.

President Obama spoke today on this very subject and Yahoo News has it covered with the full speech…

In recent months, my Auto Task Force has been reviewing requests by General Motors and Chrysler for additional government assistance as well as plans developed by each of these companies to restructure, modernize, and make themselves more competitive.
Year after year, decade after decade, we have seen problems papered-over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we have reached the end of that road.

We cannot, we must not, and we will not let our auto industry simply vanish. But we also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies -- and this industry -- must ultimately stand on their own, not as wards of the state.

That is why the federal government provided General Motors and Chrysler with emergency loans to prevent their sudden collapse at the end of last year -- only on the condition that they would develop plans to restructure. In keeping with that agreement, each company has submitted a plan to restructure.

But after careful analysis, we have determined that neither goes far enough to warrant the substantial new investments that these companies are requesting. And so today, I am announcing that my administration will offer GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success.

What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognise that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry. - Yahoo News UK/Ireland

Before you call me a UAW or Detroit automaker hate filled monster hear me out. GM and Chrysler need to grow out of the bankruptcy as better companies just like your child would do so on learning that they have to stand on their own and pay for what they can realistically afford. Something has to give and the truth is that everyone involved with making a profit from GM and Chrysler products has to own up to it and decide if they want to work for and profit from the same company in the next couple of months or twenty years down the road. Everyone involved in these two companies survival needs to knuckle down and offer savings to save paychecks and jobs at all levels of the corporations survival structure. That works from the guy or gal cleaning the toilets to the people supplying steel, Union Workers, health benefit suppliers, guys and gals on the production floor in management, and retired workers. Everyone getting a piece of the GM and Chrysler pie needs to push a slice back. President Obama more or less fired the CEO of GM today because he came to the taxpayer trough. It was Rick Wagoner’s job to save GM. He didn’t act fast enough and he got his just reward. The details don’t matter, he didn’t do his job and his stock holders should have tarred and feathered him over a year ago!

Nobody wins if either company fails.

A very good point was made today by the Governor of Michigan, Jennifer M. Granholm, we can’t support them but they do play a part in our national security as far as having an industrial complex that can convert quickly for full scale military production. I’m thinking she was talking about WWII and the complete military industrial transformation. That isn’t a good selling point to the discussion but it is a point to really think about.

I’ll toss my cost savings into the ring, I bet that I could save GM and Chrysler millions per year each if they changed their supplier standards and let a guy like me quote their wire and cable needs. They won’t, but I could save them a bundle and the product I would supply would all be made in the USA and the same regulatory safe product they use today. The standards and requirements built into wire and cable design for all of the automotive industry adds hundreds of millions to the cost per year when a simple guy like me could supply the same damn product for mega savings without all the extended BS specifications that limit competition. Email me if you are a buyer at GM or Chrysler!

I’d put the email address in this post but I have enough offers from African nation people willing to split millions with me if I just give my banking and personal contact info.

I’m just one guy willing to bid competitively on their business. Who else is out there willing to jump in to save GM and Chrysler some serious cash in the supply chain? Step up boys and girls and be heard here! My company is willing to save GM and Chrysler some money, who else is willing to step up to save American jobs?

Papamoka

Interesting article over at the Gun Toting Liberal on this same topic...

Washington to Detroit Loan Deal Done

It’s finally going to be a done deal for the Big Three in Detroit to get some bailout money to save millions of Automaker jobs. Believe it or not it was a loan deal worked out by the White House and Speaker of the House Nancy Pelosi! I’m still in shock that President Bush cleared his house shopping schedule to find a compromise deal with the Speaker of the House. Over at CBS News they have this to say on it…

CBS News correspondent Kimberly Dozier reports that significant progress came Friday night, when Democrats from both the House and Senate agreed to bail out the struggling General Motors, Chrysler and Ford with federal funds.

Several officials say the White House and congressional Democrats have agreed on $15 billion in loans, which is less than half of what the car chiefs were seeking.

They say the breakthrough came after House Speaker Nancy Pelosi bowed to a demand by President Bush that any aid come from a fund that had been intended to help Detroit produce more fuel-efficient cars.

Pelosi said the House would consider legislation next week to provide "short-term and limited assistance" to the U.S. auto industry. - CBS News

I have to say that I knew that this deal was going to come sooner or later. Matter of fact anyone that follows the automotive industry knew it too. GM, Ford, and Chrysler were going to get a bailout loan, it was just a question as to how much each would actually get that was an unknown fact. The federal government could not let the big three fail or go into bankruptcy because of the ripple effect it would eventually expose. You know that $700 billion they have in bailout cash for the banking industry, that bailout cash would have been just a drop in the bucket if Ford, GM, and Chrysler filed for bankruptcy.

I propose the following hypothetical scenario. All three automakers file bankruptcy protection. If you are a supplier to any of them then you do not get paid for any outstanding invoices and thus you can not keep paying your suppliers for continuing orders so your company is forced to file bankruptcy. Suppliers feel the pinch hard and can not pay their suppliers for raw materials so they are forced to file bankruptcy. And the cycle continues down the food chain. The layoffs from all of the suppliers to the Big Three would dwarf all of the layoffs from the Big Three. Lastly, not all of the suppliers are in Detroit.

I think it is fair to say that this bailout will save more jobs than the $700 billion in bailout cash that the banks received a free pass on. I believe it was the Steel Workers President that summed this controversy up best; “If you shower before work you get a bailout, if you shower after working all day, you don’t.”

In the long haul objective, steps are being taken in the right direction to put the brakes on the economies collapse. Baby steps, but they are still steps.

Papamoka

White Collar Job’s Only Bailout

Yesterday the U.S. Government bailed out another white collar giant in the banking industry. Citi Bank, the largest of banks in the nation received a blank check from Washington without any questions asked. This most recent of bailouts is all okay with the higher than thou Congress simply because the people cashing the blank check all wear white collars. White collar jobs are good, blue collar jobs bad.

The Steel Workers President put it best, it’s okay to bailout someone that takes a shower before work but if you take one after working all day you get thrown out.

Rachel Maddow has this interesting view on this very same subject…

Video Link



I think I might have just found the answer to the automotive industry bailout problem. Don’t tell anyone in Washington but GM, Ford, and Chrysler should change their mailing address to Wall Street in New York city. Better yet, they should all start offering brokerage accounts and free toasters with every car purchase. Even better and this would be a slam dunk, change the corporate names to GM Bank, Ford Bank and Chrysler Bank. Then they could get the same blank check as Citi Bank!

Blue collar union jobs bad, white collar big bank jobs good? Makes sense so far in the scheme of things that Washington and our pontificating Congress uses for an excuse not to bailout the big three automakers. While they claim that the big three have put themselves in the position they are all in, how did Wall Street and all the banks robbing the treasury blind get where they are?

Papamoka

Move your Ass Detroit!

In India they unveiled the cheapest car in the world. It’s God awful ugly but goes from point A to point B at 50 MPG. Don’t even think about looking for it on the streets in North America any time soon. It won’t pass the bicycle hitting the newspaper stand test. But it is innovative in an entrepreneurial kind of way of making brand new car ownership possible to millions of people in India.

This raises the question, why the hell can’t Detroit do this for the folks in the United States? Could it be that all the outsourcing of jobs to India has created the end of Detroit’s ownership on the world transportation needs? Either way you look at it, India has a compact super little car that fit’s the needs of their people and cuts emissions that can be bought for $2500 US dollars.

Tata unveils Nano, its $2,500 car

The long-awaited Indian 'People's Car' aims to replace the scooter in first-time buyers' hearts. Though you won't see it in the West anytime soon, it could signal a wave of lower-priced cars to come.

By MSN Money staff and wire reports

India's Tata Motors today unveiled the Nano, its much-anticipated $2,500 car, an ultracheap price tag that brings car ownership into the reach of tens of millions of people.
Company Chairman Ratan Tata, introducing the Nano during India's main auto show in New Delhi, drove onto a stage in a white version of the tiny four-door subcompact, his head nearly touching the roof.

With a snub nose and a sloping roof, the world's cheapest car can hold five people -- if they squeeze. And the basic version is spare: There's no radio, no air bags, no passenger-side mirror and only one windshield wiper. If you want air conditioning to cope with India's brutal summers, you need to get the deluxe version. - MSN MONEY

All is fair in love and war and American’s love cars. The current administration has proven that we will go to war over the go go juice that gets our people from point A to point B. With this little car we just might not have to go to war to protect our need for more go go juice.

Cheap cars are never pretty, remember the Yugo? That was a joke of a car but many people bought them and drove them till their Bic Lighter life ran out. Same thing goes for the Geo Metro, put me in the ownership column of Geo Metro lovers. I loved my little four door grasshopper. Filling the tank once every two weeks with a work commute of 19 miles each way fit my larger than life family.

Watch your back Detroit, India is knocking on the door and they are bringing savings to the driving consumers. It may not be pretty now but these cars will be on the streets of North America in less than ten years with some beefing up crash test passing results. The clock is ticking… tick, tock, tick, tock…

Papamoka

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