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Departments: First Word

Photo: Scott Paton, publisher

  
   

Big Three Blues

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