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Compares theories, styles, approaches & applications to auto manufacturing. Strategy, structure, staff, skills, systems, promotions, careers, etc. Tables.... More...
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Paper Abstract:
Compares theories, styles, approaches & applications to auto manufacturing. Strategy, structure, staff, skills, systems, promotions, careers, etc. Tables.
Paper Introduction:
The purpose of this paper is to examine Japanese and American management styles, especially as they relate to the automobile industry. We will discuss and compare management theories, strategy, structure, staff, skills, systems, promotions, career incentives and the like. Most important, we will examine the roads traveled by each country in getting where they are today, look at how Japan has virtually won the "automobile war," and take a look at Japanese manufacturing operations in the United States, where American on-site managers and labor have been forced to adapt to Japanese manufacturing methods.
The power of both the work ethic and good management is particularly evident in Japan. The domestic auto industry likes to explain the success of the Japanese in the U.S. market solely
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(1988, October 15). An automobile factory hasthe frantic jumpiness of hand-cranked movies of a 1912 food riot" (Miller,199 , pp. There are large,open buildings packed to the ceiling with clanking columns of partiallyassembled cars, all being tended by knots of workers. Shaking Up Detroit. The Japanese were forced to create a manufacturing system thatcould compete in world markets on a small island containing one valuableresource--a highly motivated, well-educated labor pool. "A diploma is worth less than atheater ticket," he told the school's administrators. A modest domestic industry wascreated in the 193 s as the economy mobilized for war, but it concentratedon the production of trucks and commercial vehicles. 34-35). They are thus able to control prices and quality. Neither is this efficiencythe result ofspace age technology. The BigThree had, within the decade, driven KaiserFrazer into oblivion, forcedWilly-Overland, Hudson, and Nash to merge, and had Studebaker-Packardpropped up for the final blow. Once the analytic observerhas isolated his particular segment of Japanese capitalism, he thenproceeds in the best American tradition to analyze it to death. Moreover, the majorJapanese banks considered it their national mission to underwrite long-termJapanese recovery. This permits the financiers to becomedeeply involved in both shortterm financial management and long-rangeplanning. Always the rebel, Honda argued against employing only the conformingworkers. market. 52-53. Way, Arthur. But they did enjoy some significant advantages. In the current cliche, a nation capable of putting menon the moon should be able to produce a competitive automobile. 34-35). But the notion thatHonda company picnics trigger thousands of workerinspired inventionsunnerves them. Japanese occupied the top jobs, but most of the upper-echelonoperations positions in sales and distribution were held by Americans.They were a forgotten breed, but without the Americans who went to work forthe imports, they would have barely gotten their cars off the docks. Surgingtransplant production has pushed sales of popular Japanese nameplates in aweak market. Where American management typically raises its money by issuing andselling shares, the Japanese company still relies heavily on bankfinancing. Treece, James B. Honda was not the silent, stoical Japanese who operated in anethereal Buddhist state beyond the comprehension of the Western mind. Although legalistic in their exasperating fondness of proper formsand procedures, the Japanese are resolutely not litigious. The new factories have enabled the Asian auto companies to boostsales regardless of quotas, tariffs, or currency swings. 69. That the Honda work force annually providesover a million suggestions is difficult to comprehend for managersaccustomed to massive absenteeism on Mondays and Fridays by workers whoseaverage pay is over $3 , per year. At first, the Marysville factorymanufactured motorcycles on a limited basis. There is continuing pressure to produce cars at the same linespeed with fewer people. auto makers must apply the lessons they learnfrom the transplants. Suzuki Motor (5 %) GM of Canada (5 %) 4/89 2 , 2, Produces small cars and off-road vehicles for GM. The harmony that permeates the steel, electronics and automobileindustries did not exist much before the 196 s and was the simple outgrowthof necessity. In198 the two nations produced almost twice as many cars and trucks as theUnited States (13.8 million vs. 74). The Japanesebusinessman's ideal is to encourage those under him to formulate decisions. Business Week, pp. He pressed ahead, corrected theproblem, and managed to succeed. The son of asmall-town blacksmith, Honda spent the thirties as a wild amateur car racerand founder of a firm which intended to manufacture piston rings. 3). Yet the economic miracle of the 195 s was born, and with it came anew Japanese automobile industry. It is penetrating the veryheart of the domestic auto industry, challenging managerial mindsets andtraditional, often obsolete, relations between producers and suppliers,management and labor. The present trends in automobile design have been molded by theJapanese (and, to a lesser extent, by the Germans). Coursing through the great halls are automated assembly linesfilled with perfect little automobiles, each more flawlessly detailed thanthe last. Behind the Japanese "miracle" and the American failure is onedisheartening fact: Men such as Soichiro Honda would never have survived inDetroit. Yet the pushing and tugging between government ministriesand business in Japan--and among both sides--reflect competitivedifferences of view belying the simplistic caricature of "Japan, Inc." The Japanese executive tends to think of himself as a community-builder as much as a profit-maker. We tend to forget the ill-fated Mazda RX2's,3's, and 4's, whose Wankel engines were unreliable gas-eaters. This is in sharp distinction to the traditional"cops-and-robbers" relationship between business and government in theUnited States. (1988, May). 22-26. But when it comes toplaying baseball, they do it until they become completely exhausted, eventhough baseball does not bring a penny to them" he stated. If Japanese cars did not perform, they could not be givenaway. Japan will continue to lead in automotive technology as long as theirflexible industrial environments invite the participation of men likeHonda, and Detroit encourages the rise of its unimaginative "team players."Unless the American automobile industry finds the will to match itscompetitors and responds in kind, our position as a secondary automobile--even industrial--power is assured (Flynn, 1987, pp. The unity of the Japanese work force is fostered by an almostuniversal system of sound education in basic learning disciplines.Although generally uninspired and over-given to memory and rote learning,it produces high school graduates who are not only far better at basicdisciplines--particularly science and mathematics--than their Americancounterparts, but who have also been educated to participate gladly ingroup projects. Second, the notion that anindividual worker has some control over his work environment boosts hismorale and level of loyalty ("American Car Industry's Own Goals," 1988, p.69). Everybody must work for himself. American liberals conversely hark back to the dreams of the New Dealor its later variants, projecting an enlightened porkbarrel paradise wheregovernment money can cure all economic problems, with education solving allthe social ones and the federal courts ever ready to chart the way forbigger and better human rights for groups and individuals, with littleregard for anyone's responsibilities. 57-58.----------------------- 35 AND CANADA (Treece, 1989, pp. 38-39). Union executives quite normally go on to managementroles. Miller, Annetta. Observed Car and Driverin a 1965 discussion of the Japanese automobile industry, "If you want tounderstand the business go see a samurai movie. Mitsubishi Motor (5 %) Chrysler Motors (5 %) 9/88 24 , 2,9 A robot wonderland, it's the world's most advanced assembly plant, sayexperts. Nissan Motor 6/83 44 , 5,1 Run by anti-union American managers, with fewer than 1 Japanese nationalson-site. In 1951 he came to the Isle of Man knowing that the motorcycles hewas producing at home were too hopelessly underpowered to race against theGerman NSU's and Italian Gileras. That ishis report card. U.S. Wakabayashi, Misuru. It was Honda who defied conventional Japanese thinking and built thefirst factory on American soil in Marysville, Ohio. Meanwhile, the intenselycompetitive Honda kept his independently owned Honda Research andDevelopment firm involved in international motor sports. The main Toyota engine plant is over fifteen yearsolder than several American counterparts (Flynn, 1987, pp. Eight years later he came back to the island witha Honda racer that produced twice the horsepower of its nearest Europeanrival. Prestige considerations can weigh asheavily with him as monetary reward. Forbes, pp. They proudly wear the company uniformand, much to the bafflement of Westerners, they sing the company song aftera round of pre-work calisthenics. It is true that in immense Toyota City, where the consistently high-quality Toyotas are produced, there is an aura of communal energy unknownoutside of Japan. (1989, November). Business wasso good that it was easier to pay off, essentially in the form ofindustrial blackmail, a work force more interested in creating an opposingpower structure than in joining a campaign to increase efficiency. During the early 196 s, a New York State Datsun dealer folded, a notuncommon occurrence in those days, and a large auto finance firm was leftwith a stock of unwanted, presumably unsalable cars. 9 -96). --- (1988, February 27). The Japanese insist on a higher work intensity. 74-8 . What such simplicity overlooks is that Japan'stwenty-first century capitalism is the product of intense competition aswell as cooperation. It is the Japanesecapitalist worker, more than the Chinese or Soviet Marxist, who is at oncethe real-life embodiment of many socialist ideals of spontaneous fraternalcooperation, and a living rebuke to modern socialism (Altany, 1988, pp. Japan has proved that a democracy cancoordinate central economic planning without sacrificing basic freedoms.It has shown that free workers, if properly organized and informed, canperform voluntarily all the feats of communal derring-do that Marxism andothers contend can be done only by government order. Americans are inclined to dismiss the Japanese successes on thesimplistic basis of a homogenous work force that is paid out half as muchas the average American, and privileged to work in the latest hightechnology factories. It took the Japanese about fifteen years to complete their system.Because transportation was relatively slow on the crowded mountainousisland of Honshu, satellite suppliers gravitated to locations around theprimary manufacturing plants. The label "Made in Japan" was synonymous withthe shoddy and the tasteless. In 1953, Nissanbegan production of the British Austin A-4 sedan under license. The American executives ideaof community service may be far wider; his particular company is only oneof its components. Hard drive from the East.Economist, pp. (1989, August 14). --- (199 , January 27). In America, the worker hasno more control over the movement of the assembly line than he would over arunaway freight train. One telling incident,which converted a group of skeptical Americans en masse, illustrates thequality of many postwar Japanese products (Jeanes, 1989, p. Honda had no tolerance for corporatemoguls who remained isolated from their workers: "It is wrong forexecutives to act like feudal lords and not know what is going on belowthem," he once said. It is, however, very difficult to transfer thisconcept to Big Three plants, where labor and management have longconsidered themselves on opposite sides of a chasm. Much of the Japanesereputation for infallible automobiles is undeserved, perhaps is traceableto the defensive bleatings of the American auto industry as to the actualquality of Japanese cars. His executives and lineworkers, all of whom wear the same white Honda overalls, fight for the sameparking places and eat together in the same cafeterias (Toy, 1988, pp. The impact of Japan's new capitalism cannot be appreciated-nor thetruths it tells us applied--if we continue to study separate aspects of itpiecemeal, whether it be worker involvement, management dedication, theseniority system, or quality control circles. market solely as a factor of lower price. Most of the effort was directedtoward rearmament but there were some Japanese, like a young rebel namedSoichiro Honda--in some ways the Henry Ford of Japan--who remainedfascinated with the technology of the passenger automobile. FinancialWorld, pp. Honda lost, but he returned home determined to create amachine that would win. The Japanese new wave philosophy leaves old line American managersshaking their heads in awe. During the197 s, the gestation period of the Japanese superworker myth, more man-daysof labor were lost to illness, absenteeism, and strikes than in eitherGermany or Scandinavia. Several Toyota, Subaru and Datsunmodels can be faulted for chintzy interiors, choppy rides, bad seats,engine problems, and bizarre styling (Altany, 1988, pp. came into being atthe same time that some in the American media were fulminating againstGeneral Motors president Charles Wilson'sremark that what was good for the United States was good for GeneralMotors, and vice versa (Hiromoto, 1988, pp. In response to the Clean Air Act of197 , Honda introduced his "CVCC" engine, a power plant with arevolutionary cylinder head that combined ample performance with lowexhaust emissions. No longer. Japanese life can make theMikado seem like a documentary. U.S. From the clustering of Japanese suppliersdeveloped the legendary "just-in-time" or kanban system of inventorycontrol. Two years after that his motorcycles took the first five finishingplaces on the Isle of Man, and were overwhelming the English, German,Italian and American motorcycles in the salesroom of every consumer marketon earth. His interest in automotive technology began while Honda wasrecovering from serous injuries sustained when his Ford-powered racing carwas flipped over while leading the "All-Japan Speed Rally" on the banks ofTokyo's Tama River. 57-58). Hoping to reduce this gap, Detroit is being forced to learnfrom the transplants how to improve efficiency and quality. From this came his interest in air-cooled engines and his absurd N36 minicar. The Yen for cars. 52. 12 F-12 K). Management seemed less inclined to isolateitself from the workers than was common in the West. The Japanese could havemoved into their new factories and resumed the simple-minded copying ofEuropean cars, locomotives, ships, radios, and toys that they had engagedin before the war. If Detroit's Big Three companies wish tosurvive into the Twenty-First century, then they will have to adoptJapanese management and worker techniques or the largest and most importantAmerican industry will go into a permanent state of decline. Hewas a passionate man of almost Latin propensities who would rapuncomprehending engineers over the head with a wrench--what he called his"thundering method" of education. The Japanese manager, bycontrast, generally feels at least an equal obligation to the workers inthe company. 217-227). Like the Germans,these people worked. Achievement in the functional organization is naturallytransformed into seniority in the community-company. No foreign manufacturer, much less theJapanese, seemed to pose a serious threat. Every three autos made by the transplants will displace oneimport-and two Detroit entrants. Japanese management progress.Journal of Applied Psychology, pp. Toyota Motor (5 %) General Motors (5 %) 12/84 3 , 3,4 Taught GM that management, not high tech, is key to efficient production.Toyota learned it could live with U.S. The workers, like their colleagues at Nissan, Honda, Subaru,and Toyo Kogu, are loyal men and women involved in a cradle-to-graverelationship with their company. Discussion and consultation areparamount. Thissymbiotic relationship between the Japanese and German auto industries hasbeen more rewarding than their ill-fated World War II alliance, andtogether they have gone a long way toward dominating the world market. 217-227). Since the turn of the century, Detroit auto makershave run the entire production show. Economic adversity hasproduced new levels of cooperation between American labor and management,but a general sense of distrust still exists. General Motors has estimated that it annuallyspends $3 billion simply to maintain its inventory of parts. If one thought cars, one thought Detroit. The two kinds of free-enterprise society differ sharply,however, in their approach to doing business. Ourname has been a synonym for efficiency. The Japanese had no serious automobile industry until the 196 's.The first car was built in Japan in 19 2, but there was no significant automanufacturing activity until the mid-192 s when Ford, Chevrolet andChrysler built small assembly plants there. Their products were now too good. Although there is a greater percentage of union members in Japan thanin the United States (31 percent as against 23 percent), most are nottightly organized on a national level. The Japanese manager, once he has satisfied his board andhis banks about his long-range business plans, is relatively free to workthem out, without the need either to push for short-term results or toconstantly explain his situation to his board, not to mention the friendlysecurities analyst next door. Over two-thirds of the cost differentialcan be traced to higher productivity levels. In the 193 s he had attended the HighSchool of Technology in Hamamatsu, a city on the south coast of Honshu, inthe same region which Sakichi Toyoda, the founder of Toyota, and TorakasuYamaha, the motorcycle and piano manufacturer, were raised. Even the Americans who worked for the Japanese told endless jokesabout the formality of their employers, their oppressive "squareness," andtheir hilarious butchery of the English language. 74). Yet it remains a benchmarkfor small-size automobiles. It is remarkable that the Japanese car business got started as soonas it did. The fact is that Japanese automobile factories look and function muchlike American, German, French, Swedish, or Italian ones. Toyota Motor 7/88 2 , 3.5 No fan of leading-edge technology, Toyota minimized risks by cloning itsplant in Japan. Honda wants productivity to match Marysville's,at one-fourth the volume. Nonetheless,its achievement is impressive. (1988, July) Another hidden edge--Japanesemanagement accounting. They plugged ahead under the awesome abuses, generating agrudging, if confused, respect among men who had the idea of "tinny" Japgoods embedded in their brains (Meyer, 1989, pp. Detroit dictated the industry'sautomaking technology, developed a labor-relations strategy, and drew intoits orbit thousands of suppliers dedicated to stamping, welding, andforging metal. As we enter theclosing decades of this century, this class version of free enterpriseseems to be showing its age, a bit hard put to cope with the changes andchallenges of computers, automation, the knowledge industry, and an ever-widening service sector. In the tiny village of EastLiberty, Ohio, newly hired trainees are learning to build Honda Civics atthe most recent addition to Honda's manufacturing complex in nearbyMarysville. The Japanese emerged from World War II with renewed vigor, but theyfaced enormous handicaps. References Altany, David R. The purpose of this paper is to examine Japanese and Americanmanagement styles, especially as they relate to the automobile industry.We will discuss and compare management theories, strategy, structure,staff, skills, systems, promotions, career incentives and the like. The most promising talent was kept at home;it was the dissidents and adventurers who were sent to Southern Californiato carve out an empire among the "heathen" ("Teaming with Ideas," 1988, p.55). In this climate,veteran assembly line workers question whether working harder serves theirinterests as well as management's. But it seemslikely that the Japanese version is better equipped to deal with the nextcentury and can in many ways be adapted to the needs of a twenty-firstcentury America. Still less good does it do us to contemplate the image of Japan, Inc.as some kind of lockstep integrated complex of business directed bygovernment, or vice versa. This gives the Japanese an advantage over American automakers whosefar-flung supply network makes it necessary for assembly plants to carryhuge inventories of engines, axles, and sheet metal, sometimes totalingover a month's supply. This isslowly being integrated into the American experience, but the tradition ofthe omnipotent boss lording it over the cipherlike worker whose only allyis a pugnacious shop steward mindlessly blocking increased production, willdie hard in the UAW-dominated American factories. Several years later, Car & Driversaid that the Toyota Tiara Sedan was "utterly lacking in technicalnovelty." It dismissed the Datsun P-41 -U sedan as a repeat of an oldEnglish design. Japanese industrial strength, fromthe Mitsubishi giants to the struggling Honda, was reduced to zero in 1945(Toy, 1988, p. Teaming with ideas. Japanese motorcycles were beginning tosell impressively, up from 6,3 in 1959 to 148, in four years, but thetraditional British brands, Triumph, BSA, and Norton were still leading thefield. This compares with the American system of redundant executivegroups being responsible for each individual operation. One imagines surgically cleanchambers filled with hissing robots tended by short, lean Orientals incoveralls. Honda's results with American workers inspired Nissan to proceedwith plans for its pick-up truck plant in Tennessee, removing some of thepolitical pressure against Japanese imports. In 1991, 27% of the company's worldwide capacity will be here.Plant now exports to Japan.9. 12OF-12 K. The results of their labors were being felt in everycivilized nation. Room for everybody? Honda attendedschool for only two years, refusing to study German or to take militarytraining, and left without a diploma. Americans rate the Japanese.Industry Week, pp. The French and Italianshardly revolutionized their systems, and the English built new industrialcomplexes in Coventry, Birmingham and the Midlands but immediately revertedto manufacturing things as they had in 1939 (Wakabayahi, 1988, pp. Honda, with no college education, would never have been hired. There is littlesignificant difference between the physical layout or the manufacturingtechniques at the Honda plant at Hamamatsu, the Mercedes-Benz factory atSindelfingen, or the General Motors Assembly facility at Lordstown, Ohio.The Japanese workers are uniformed in their company overalls and one isusually impressed by such old details as flower vases on tables in theemployee rest areas. Like many inventive geniuses, Honda was not infallible. If people are the company's strength, the company isthe people's castle, too-not a property temporarily let out by facelessshareholders. Japanese management: Bigger, not better.Economist, p. They could be ridiculed and ostracized, but they couldnot be ignored. Having started his company in impromptu fashion, Honda departed withmuch the same suddenness. This is a bitter mix of facts for Americans to swallow. If they do not, their place will be taken by anotherU.S. unions and suppliers. Even as he edged toward old age Honda maintained a firm, if erratic,grasp on the company's creativity. Meyer, Richard. If it can reach that goal, the plan wouldrewrite the book on assembly plant size.5. 74). The UnitedStates is widely regarded as the model for free enterprise democracy. The age of mass production industry, in which American business grewgreat, was dominated by the capitalism first of the individual entrepreneurand the workers, then of the large corporation and the national unions,which set terms and limits of their work by contract. Planning is anathema. It is ironic that while this economic miracle was underway, theAmerican automobile industry was losing its competitive edge. Honda Motor 11/82 51 , 8, Highly reliant on American market, Honda built this complex to fit globalstrategy. In these and other semi-rural towns of the midwest and Canada,Japanese carmakers have set up 1 plants, including some of the mostefficient, most automated, and least unionized plants in North America.With superb planning and a mixture of technology and productive labor, theJapanese are slicking a big chunk out of the Big Three's U.S. It was hopelessly underpoweredand noisy and only imported into the United States in small quantities.Finally, he yielded to his partner, Takero Fujisawa, and his senior staff,and company went on to design the conventionally water-cooled Civic, themost brilliant small car in automotive history. Unfortunately, judging from the current state ofthe American economy, Adam's hand seems to have a bad case of arthritis. The entire producer-supplier relationship at the Big Three was ripefor drastic change. 8 million) and almost monopolized the fieldof technological advance. But Nova andPrizm sales hurt by GM's marketing blunders.2. As soon as theywere upgraded to fill the needs of the American market, the Japanese "car"miracle began (Meyer, 1989, pp. Advertising Age, p. Myths abound about the Japanese. Their optimism for expansion has so far beenhandsomely justified by events. 12 F-12 K). Afterentering the car business in Japan in 1963 with a small minitruck andsports car designed for the domestic market, he became fascinated withInternational Grand Prix motor racing. While essentiallycorrect, the argument avoids one vital issue: market price is a componentof function. TABLE JAPANESE AUTO PLANTS IN THE U.S. The peculiar Reagan version of supply-side economics, supported by so manybusinessmen, promises a world where Horatio Alger's maxims all come true,with prosperity as unlimited as opportunity if we just give entrepreneurialfree enterprise its head. To offset thecosts of importing raw materials and shipping their products over vastexpanses of ocean, manufacturing had to be accomplished according to theleanest, most efficient patterns known to man ("Japanese," 199 , p. They were saddled with a language thatdefied straightforward translation of technical terminology, few naturalresources, a rudimentary road network, and a population that was ignorantof, and often unsympathetic to, Western industrial civilization (Jeanes,1989, p. and Canadianmarkets. 74). 52-53). Datsun and Toyotaplaced small allotments of the L-21 and Toyopet Crown four-door sedans onfreighters to begin the slow, ten-day sea voyage to California. The labor force was imbuedwith a sense of team play. In addition, his board of directorsgenerally has a majority of management officers. He had been unaware of the crucialneed for silicon in his metallurgy. Jeanes, William. But the Japanese were hardly to be laughed off. The revolution in the quality of Japanese products was beingaccomplished by men like Goichiro Honda, who was obsessed with high qualitymotorcycles. The Japanese auto industry blundered ahead during the 195 s inrelative obscurity. HinoCorporation made a similar arrangement with Renault to manufacture the tiny4-CV, and Isuzu contracted with the English Rootes Group to make theHillman. Much of the gain is in the Midwestern states, traditionallyDetroit strongholds, but now home of the transplants. 57-58). Even among those who belong to anational federation, the singleenterprise union is more likely than not tobe a law unto itself. The banks created a symbiotic relationship with many basicindustries, including automakers. Despite the war,Japan remained a homogeneous society with powerful family loyalties and astrong tradition of working for the common good. 74-8 )Parent Production Yearly Started capacity Employment1. 74. With the help of American dealers who were looking for any importedcar franchise to capitalize on the small sedan boom, Datsun sales jumped to13 units in 1959. Bycontrast with the Japanese, the French, Italian and English carmakers couldnot put aside their national loyalties and attempted to staff theirAmerican operations with their own countrymen, most of whom had no idea howcars were sold in the United States. "I mustrecognize that man achieves his highest degree of efficiency when he plays. Education, built aroundthe work ethic, was of uniformly high quality. As Honda and his rival Yamaha began to import higherperformancemotorcycles into the country, it was soon discovered that they could outrunthe heavier domestic products with engines half as large. It is probablethat much of America's awareness of Japanese automobiles was created byentry-level customers who had discovered a whole new dimension of riding onHonda motorbikes (Toy, 1988, pp. But the ugly duckling Datsunsrefused to die. The antithesis of the stereotyped Japanese automation, Hondapropelled his little company to the top by creating the most technicallyadvanced motorcycles in the world. This is characteristic of asociety that prizes harmony among people rather than a winner-loser type ofjustice. They more resembledgirls' step-through bicycles than the bloated Harley "hogs." With marketingbuilt around the ad slogan, "You meet the nicest people on a Honda," thecompany probed the up-scale segments of the population, people who wouldnormally no more consider the purchase of a motorcycle than a black leatherjacket. There were few good roads outside the major cities and the 1923earthquake had destroyed much of the country's industrial base. As a result ofthese and other practices, the transplants enjoy a $7 -per-vehicle costadvantage over Big Three plants, or about one-tenth the retail cost of asmall car. Most American buffs remained loyal to the German and British brandsthat dominated the import market. (199 , April 16). In contrast, the American system dates back to the origins of theindustrial revolution when the worker was considered no more than a semi-human component of the manufacturing process. 3). --- (1988, February 6). Is any niche too small for U.S.automakers? But the results were soencouraging that production was raised to 6 , units a year and somemodels were even exported. Honda thought otherwise. Flint, Jerry. (1989, August 22). By 193 Soichiro Honda had teamed up with another youngindustrialist, Takero Fujisawa, and created the prototype of the "DreamType D" motorcycle. The profits can come either way, but the way they areplanned and realized is very different (Way, 1988, pp. Animpulsive man who scorned formal education, Honda belatedly discovered thathis product was hopelessly brittle. Open confrontation is strenuously avoided, as befits a countryof 12 million that has only 12, lawyers. 9 -96). 217-227. It may not be true that capitalism will fail of its own success, asthe entrepreneur becomes something of an endangered species. This kind of people-centered business thinking and the society thatdeveloped it is constructing not only a new kind of capitalism, but thekind best suited to take the capitalist system into the strains andconflicts of the twenty-first century. Strand, Patricia. 9 -96. Early Japanese imports were weak, uninspired copies of outmodedEnglish designs, and while cheap, they did not sell well. His small factory was first hit by American bombs, then leveled by anearthquake shortly after the war ended. American managers can deal with theadvanced applications of robotics, much of which was developed in theUnited States, in the manufacture of Japanese cars. 36-37). Began building pickups, now also makes Sentras on same line.Will double capacity by 1992.1 . Car & Driver, p. Plant now has two purchasingdepartments and separate final assembly lines.8. Honda was prompted to expand the facility to produce automobiles,and, following some skirmishes with the UAW, the operation proceededsmoothly. In the beginning it was s source ofamusement to Westerners rather than a perceived threat. Honda learned from empirical evidence of all kinds, including ahunger strike staged by his work force during the 1957 recession. But the strategy hasn't jelled. But they did not. It is normal for a car company's majorbanking connections to hold 3-4 percent of the voting stock and to have aseat on the board of directors. Japanese capitalism, to be sure, hasthe advantage of working with a tight, homogeneous society. It has no untested technology, relatively few robots, andbuilds a proven Camry. 38-39. In 1973, at age sixtysix, he retired along withhis partner, Fujisawa, and left the company in the hands of younger men.Honda appointed as his successor forty-five-year-old Kiyoshi Kawashima, whowas both an engineer and the former manager of the company's racingprogram. "In collectivebargaining, they complain that they work too hard. He notedthat the dissident workers complained about working conditions, but stillplayed baseball on the company fields with zest. Yet the magazine lauded the Toyota's fit and finish as"better than might be expected" and praised the Datsun for having the "veryreassuring quality of stoutness about it." Despite such cautious praise, the Japanese entries were stillsomething of a joke to the automobile cognoscenti. During this period of worldwide depression, jingoistic zeal in Japanoutpowered a rapid industrialization. 22-26). 3. The militant CanadianAuto Workers granted flexible work rules so that Suzuki could use itsmanagement system.3. The domestic auto industry likes to explain the successof the Japanese in the U.S. Workers fresh off thefarms are assembling Toyota Camrys in Georgetown, Kentucky, where men inbib overalls chat on the courthouse steps. The Japanese on the other hand, form long-term, closerelationships with suppliers. In Japan's newer capitalism, the emphasis is oncommitment rather than on contract, on training rather than perpetualhiring and firing. 9 -96). Stacks of worker housing surround the factory, and a3 , seat stadium, plus acres of recreation grounds, dominate thelandscape. No one stops. The Japanese system confers two benefits. Once in the motorcycle business, he decided he had towin the most prestigious motorcycle race in the world, a gruelling eventwhich was run over winding lanes on the Isle of Man in the Irish Sea. Ask an American managerwhere his duty lies and he will answer, "to the shareholders." The businesscommunity--not to mention the Securities and Exchange Commission--would bedisturbed if he said anything different. But 1958 brought the first serious postwar recession and with it aspurt in small-car sales. In explaining current Japanese industrial power, much has been saidabout how the Japanese enjoyed the advantage of having their old industrialcomplexes destroyed in World War II, then rebuilt as modern plants withAmerican capital. Although the Japanese "company union" can be a toughnegotiator, belying the pejorative implied in that American term, itsinterest centers in the progress of the one company, not that of the unionat the national level. But the illusion of high efficiency obscures the fact that Japan'slabor situation is hardly as harmonious as one might assume. Added to these advantages is a relatively stable politicalclimate and a government openly sympathetic to the needs of big business.The government-business partnership called Japan, Inc. The massed assembly lines of WorldWar II and our later direction of the Western World's recovery--and Japan's--were, however, quite possibly the swan song of our industrial agesupremacy. The Japanese automobiles were met with tolerant smiles by themotoring press. Flynn, Julie. Economist, p. Traditionally, the American auto makers have dealtwith suppliers at arm's length, selecting vendors mainly on the basis ofprice competition. Always remember thatyou often find outstanding persons among those you don't particularlylike." From this environment came the two great automobiles of the 197 s:the tiny, space-efficient Honda Civic of 1973 and the stunning Accord of1976, the first modest-sized automobile to offer the interior room,comfort, craftsmanship, and performance usually associated with moreexpensive European models (Strand, 199 , p. It was part of Western industrial lore that theJapanese were simple innovators copying everything they could-even the ironreplacement patches on the boilers of early British battleships. Simultaneously other Japanese, uniformly dressed in neat dark suitsand white shirts and generally shouldering single-lens reflex cameras, wereon similar pilgrimages to the Occident in the name of Toyota, Sony, Hondamotorcycles, Nikon, Canon, Matsushita Electronics, and Yamaha pianos andmotorcycles (Wakabayashi, 1988, pp. Harvard Business Review, pp. He accomplished this while the major Americanmanufacturers were complaining in unison that the Federal standards wereimpossible to meet, and were heading to court to prove it. Datsun had a number of executives in the United States, whose job itwas to set up a national dealer network for a car Americans had never heardof. Honda Motor 11/86 8 , 85 Builds Accords and Civics. So we havevariously "the keys to Japanese management" or "Quality control--Japan'sproductivity secret" or "Japan's business ideology." Readers of thebusiness press are assured almost weekly that some aspect of Japanesebusiness thinking is available as a poultice to each businessman's specialproblems. It was during 1958that the "miracle" began, but on a miniature scale. in 1958; a similar number of Toyotas were bought.At the time there was little prestige for a Japanese executive in beingsent into the export market. Once in charge of a company, he will want to make the bigdecisions himself and lead his people after him. In 1955, when Detroit pumped out a recorded 9.2million cars and trucks, the entire Japanese industry produced 68,932vehicles, of which only 2 , were passenger cars. The Russians picked up little in theway of industrial sophistication from the war. First,an error is immediately sighted and corrected. The Accord more than any other Japanese carendowed that nation's automobile industry with an aura of invincibility.The car has been openly praised by other manufacturers and used as themodel for several other successes, including the Nissan Stanza, and suchfailures as the General Motors J-car (Flint, 199 , pp. Hiromoto, Toshiro. 36-37. As he grew older, Honda never lost his enthusiasm for radicalchange. 52). Toyota Motor 11/88 5 , 1, Low-volume production of Corolla means lots of handwork, few robots.Toyota plans to export 3 , sedans a year to U.S.4. parts makers arelearning humbling lessons in quality and cost-cutting as the Japaneseplants reject parts that had been good enough for Detroit. Japanese automobile manufacturers involve their workers in what isgenerally referred to as "quality circles," small groups of individuals whogather to discuss how to improve their collective performance. GM is spreading the gospel accordingto Toyota. Often, indeed, what may seem to the outsider to besuperhuman skill proves to be more the product of exploited happycircumstances, desperate perseverance, and the common acceptance ofrealities. He ignored the racial slurs and theoutright rudeness. Although there are "dynamic leader" types in Japan and "consensus leaders"in America, the ideals of the two capitalisms differ ("American," 1988, p.69). Although the Japanese, particularly visionaries like Honda, set newstandards, they cleverly made use of American talent in penetrating theU.S. The Japanese economy is "plan-rational," whereas theAmerican is "market-rational." This is to say that the government is asupportive force helping business attain various long-term goals andactively planning them. Amid cornfields southeast of Lafayette, Ind., young Hoosiers arebuilding the Subaru Legacy in a brand-new factory. Now in his mid-7 s, Honda is still an active adviser for his company. For two years, until the Big Three counteredwith their compacts, the imports, led by Volkswagen and Renault, snatched1 percent of the market. A 1958 edition of Road & Track described the performanceof the first Datsun as "melancholy," while noting that it was still betterthan most small imported British cars. 12 F-12 K). Mostimportant, we will examine the roads traveled by each country in gettingwhere they are today, look at how Japan has virtually won the "automobilewar," and take a look at Japanese manufacturing operations in the UnitedStates, where American on-site managers and labor have been forced to adaptto Japanese manufacturing methods. 9 -96). The Accord is now in its second generation and costs more than twice asmuch as its 1976 introductory price of $3,995. Mazda Motor 9/87 24 , 3,4 Lured to Detroit's front yard by UAW's promises of cooperation. Moreover, mediocre labor relations at the JapanNational Railways have resulted in both poor service and fiscal deficits. This fit the Japanese stereotype: an industrious but essentiallyuncreative people. The power of both the work ethic and good management is particularlyevident in Japan. 55. Datsunsold 83 cars in the U.S. Lifetime employment practices andthe age seniority system are followed wherever the size and strength of thecompany permits. Many things follow from this difference.Unlike the American corporation, which hires and fires freely as it needsthe particular kinds of skills that abound in the outside labor force, theJapanese community-company prefers to grow its own labor force, recruitingthe "whole man" out of school or college and training him within thecompany, with a maximum of job security. If someone says he works out of loyalty to his company, he is a damn liar. Datsunhad begun building cars on a small scale as early as 1911, but did notbecome a sizable business until 1933, when it was reorganized under NissanMotor Company, Ltd., and sought technical assistance from the AmericanGraham-Paige Company, which was absorbed into the abortive Kaiser-FrazerCorporation following World War II (Miller, 199 , pp. Ford owns25% of Mazda but keeps hands off, and 8 % of cars produced are Ford Probes,2 % Mazdas.6. AToyota or Nissan car theoretically contains $1,5 worth of free featureswhen compared to the price of an American automobile. The DatsunF1 , a small front-wheel-drive model, was markedly inferior to all othervehicles of its kind. The trueCapitalist believer, by contrast, professes that Adam Smith's "invisiblehand" will do the job. They refused to lubricate thebearings, they rode the clutches, over-revved the engines, jammed the gearsand left them to rust in the bleak winters. 9 -96). 52-53). "The ticketguarantees that you can get into the theater, but the diploma can'tguarantee that you'll make a living." Honda displayed the same cynicismabout teachers: "If a theory leads you to an invention, all schoolteacherswill become inventors (Toy, 1988, pp. The Japanese have also developed a more centralized management systemin which a single team can handle a number of geographically separatedoperations. Because of the proximity of the suppliers, parts and componentscan be delivered to a Toyota or Nissan factory on a daily basis, and insome cases within hours of the time they are needed on the assembly lines("Japanese," 199 , p. Japanese cars: Born in the USA.Newsweek, pp. Companies thathad nearly given up on American workers are finding that giving themdecision-making power can be a powerful motivator. Toy, Stewart. In both countries the labelon the outside says "capitalism," but when you look at the contents, theyare very, very different (Flynn, 1987, pp. Indeed, planned economyremains for many sturdy Americans a synonym for Communism. American car industry's own goals.Economist, p. Meanwhile the Japanese are busy organizing for the postindustrialworld. But when the Americans retaliated with the Falcon,Corvair and Valiant, the tide seemed to be turning against the imports.How could the Japanese, with their out-dated cartoons on wheels, expect tomake major inroads? (199 , April 9). carmaker--with a Japanese name. Even I work because I like working. Toyotamanufactured automatic looms for the textile industry until 1935. Yet like other cars produced by the presumed wonder workers of Japan,it had some serious failings, including the penchant for blowing headgaskets and rusting around the front fenders. They use the Kaizenconcept that calls for assemblers to make continuous improvement inperforming their tasks, both to improve quality and to eliminate unneededmotion. Unlike the hulking Harley-Davidsons and Indians, the Hondas weretiny, lightweight urban transportation vehicles. Many of his senior managers are men in their early thirties whoshare his enthusiasm for egalitarian teamwork. The Japanese invasion represents a great deal more than a marketingproblem for General Motors, Ford and Chrysler. Thus the American manager has to worry about his quarterly P&Land the effect current results will have on the company's stock. The courts are appealed toonly as a last and often desperate resort. He never ceased to remind his managers, "If you hire only thosepeople you understand, the company will never get people better than you.Don't try to hire people just because you like them. The presumed $1,5 price advantage each Japanese car has over its American counterpartinvolves only $5 in labor costs. BusinessWeek, pp. Certainly the Japanese variety,lacking anything like our own massive natural resources and storedtechnological capital, has proved itself far more flexible in avoiding ourparticular problems of the last decade or two: stagflation, the decline ofproductivity, chronic unemployment, the factionalism of constantly warringspecial interest groups, the tug of adversary processes tearing at theheart of our polity, rising apathy and mistrust among the work force, whilethe gap between the elite manager or capitalist and the worker or middlemanager grows rather than lessens. His associatesbelieved that the American laborer, embroiled in union politics andhandicapped by a sloppy work ethic, could not meet Japanese standards ofquality. Perhaps thegreatest advantage of the Japanese system is the enhancement of workerresponsibility. Theirarrival was barely noticed. (199 , April 9). Both these versions of Eden areobsolete survivals of our industrial past. The Japanese were still non-players. The publicadversary procedures now riveted into American business are frowned on inJapan, both inside the company and out. (1987, May 25). Accustomed to plush Impalas andBonnevilles, the salesmen despised the narrow, midget "Jap" cars and dideverything they could to destroy them. Within 15 years, the machine would dominate the worldmarket and destroy the British motorcycle industry which had been theimperious leader since the mid 192 s. Imust create a workshop where everybody enjoys working" (Toy, 1988, pp. The lesson seems clear. This is an inexcusable situation for the United States, a nation thatmobilized the most awesome industrial enterprise in history during theSecond World War. The firm decided tolet their salesmen drive the leftovers. Produces Plymouth Lasers and Mitsubishi Eclipses7. This isno shortage of Americans wanting to buy Japanese cars or willing to workfor Japanese employers. 34-35. Japan was devastated by World War II, perhaps more so thanGermany. It is not uncommon for a Japanese assembly line worker tobe able to shut down the entire operation if he spots a flaw. Having changed their own business make-up, encouraging newindustries to expand and old industries to diversify and change, they arenow working with robots, knowledge-intensive industry, and newinternational market plans. 36-37). Like the rest of his country, Honda's business was ravaged by thewar. The Japanese government plays a developmental role in its relationswith business, as opposed to the "regulatory" function of government in theUnited States. We are now in a quandary about both productivity and purpose.And it is significant that the economic panaceas given us by ourpoliticians, instead of looking forward, hark, back to a disappearing past. But in stark terms of fitting together an automobileout of raw bits of steel, rubber and plastic, there is precious littledifference ("Japanese Management--Bigger, Not Better," 199 , p. This smugdismissal of Japanese talent left America (and Europe) vulnerable (Way,1988, pp. Any increase in the economycould produce a lapse back to the old, self-destructive ways ("Japanese,199 , p. His idea of community service is anarrow one, however, concentrating on a single industry or a single company--often to the exclusion of everything else. After all, over fifty brands of imported carswere fighting for less than five percent of the American market. Functionally, he may think of himself as a kind of"Lone Ranger," his six-gun ready for hire in the service of efficiency andprofitability. German high technologyhas been transformed by the Japanese into a mass sales device. (1988, October 3). The transplants import a large part of their auto components fromJapan or buy from non-union Japanese suppliers who have relocated in theU.S. The Americanization of Honda.Business Week, pp. Fuji Heavy Industries (51%) Isuzu Motors (49%) 9/89 12 , 1,7 Initial plan was to build Isuzu trucks and Subaru cars on the same assemblyline. But change seems unavoidable, for both labor and management. Eye on the road: Of excellenceand excitement. Where the typical American corporation is a functional economicorgan, seeing itself primarily as a means of doing a job, the Japanesecompany is a functional organization, which also very consciously thinks ofitself as a community of people. If he keeps their work community flourishing and intact, hedoes his job. In reality, their manufacturingtechniques possess few of the magical qualities envisioned by those whohave never toured a working Japanese factory. This thesis has several flaws. This avoids the main issue. (1988, April 25).
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