I would like to read you what David Halberstam, possibly the best journalist of our time, had to say about Detroit’s response to the Toyota challenge. “All too many native sons and daughters had taken their standard of living for granted. The other respect in which America was ill prepared for the new world economy was in terms of expectations.
But, he added, “there seemed little awareness of this, let alone concern about it. Few were discussing how best to adjust the nation to an age of somewhat diminished expectations, or how to marshal its abundant resources for survival in a harsh, unforgiving new world, or how to spread the inevitable sacrifices equitably.”
Halberstam wrote this in his book The Reckoning, published . . . twenty-one years ago, When I read it way back when, I felt like I had received a revelation. What The Reckoning made crystal clear -- without ever explicitly saying so --- was that Detroit, unless it got its act together in a hurry, was not going to be competitive in the long run.
The men running the Big Three come across in Halberstam as complacent, arrogant, and provincial. Toyota, though not without flaws, seemed far more willing to reinvent the wheel when needed.
Well, now it is a generation later. Nobody has fixed those leaky pipes, and everyone in Detroit is shocked, shocked that our basement has finally filled with water. Yes, there are signs that Detroit’s automakers are now trying, and they have vastly improved.
But Toyotas are still seen as better by the professionals who study quality issues. Their vehicles cost less to maintain, and, perhaps more importantly, hold more of their value when they are resold.
This didn’t happen overnight. Everyone talks about labor and health care and legacy costs, All those are important. But I think a big part of the reason why Toyota has been winning is this.
Toyota thinks in terms of the long haul. General Motors has tended to think in terms of the next quarterly earnings report. That’s the kind of thinking that caused General Motors to cancel its electric car, the EV-1, which was briefly on the road a decade ago.
That’s the kind of thinking that caused GM not to invest heavily in hybrid vehicles when it was clear they would lose money for awhile. Toyota, on the other hand, put a lot of money into its hybrid, the Prius.
Now the Prius is making a profit for Toyota. General Motors, on the other hand, is still making Hummers. They are, however, excited about the new hybrid they are working on called the Volt.
I will be excited too, once they manage to invent the batteries to run it. In the Newsweek article, Bob Lutz, GM’s vice-chairman, candidly puts it this way. “We made a bad decision. Being known as the technology laggard is not conducive to selling automobiles.”
Nice sentiments. But what took them so long to get it?
Every time I read about someone singing the praises of the Toyota Prius (satirized on South Park as the "Pious"), I imagine what the press would be saying if an American auto maker had produced that design. It is positively the ugliest current car design that I know of. I remember what the automotive press said about the Pontiac Aztec. The Aztec is downright stylish next to the Prius.
But I am perfectly willing to go with what sells. If quality sells, do it. If sexy styling is what people want, do it. If some monkish AlGoremobile is what people want to spend their money on, then by all means build them. And if big, powerful pickup trucks is what people want to buy, well then maybe that's what Toyota will do, too. What's that, you say? Toyota is doing that right now? Oh.
Posted by: Anonymous | March 13, 2007 at 05:21 PM
Short-term thinking was what was killing GM. Much like what term limits is doing in the MI goverment.
Posted by: Snazzum | April 12, 2007 at 11:52 PM