Wednesday, April 04, 2007

North American Auto: Reason for Optimism (2)

In almost any quality survey of either vehicles or production facilities, the North American auto manufacturers are on par with Toyota, the gold standard in productivity and quality. Unfortunately for these firms, consumer perceptions have yet to adjust. This is an ironic dilemma in which the Big Three find themselves. Once upon a time, these companies promoted products as reliable when in fact they were lemons - subscribing to the fallacy that, by creating perception, marketers can manufacture a reality. Today, although their quality matches competitors, it is almost impossible for those same marketers to change the perception that they still produce lemons.

Through its NUMMI and CAMI joint ventures with Toyota, GM has learned how to make cars using lean manufacturing and, copying the Toyota Production System, its Oshawa No. 1 and Lansing Grand River plants are rated above the Japanese transplants for both productivity and quality. It will take time, but eventually through word of mouth, news reports, and personal experience, consumer perceptions will adjust and the competitive advantage that the Japanese automakers presently enjoy on the reliability front will be eroded. For GM and Ford, though, this has to happen before their liquidity evaporates.


Anonymous said...

Although the North American economy to which I contribute and of which I am a beneficiary is dependent on the auto manufacturing industry, I will never purchase nor drive a North American vehicle of any sort. Irrespective of the adoption of efficient assemblage practices from the Japanese manufacturers, the North American "Big 3" forgot to incorporate the requisite element of quality. I appreciate the cost cutting measures made by Ford back in the 60's to promote automobile usage by average North Americans through price reductions(which eventually prompted a law suit by shareholders, the now infamous Dodge brothers). But in its attempt to encourage mainstream adoption, Ford compromised on quality. Ford's North American competitors had no choice but to follow suit. I recently had the misfortune of trading in my Japanese Honda for a Ford Focus rental. The Focus does not accelerate fast enough. The exterior material is weak and flimsy. Overall the car is poorly made. So much for quality being job number 1.

David said...

Regarding the quality of North American cars, I think that J.D. Power and Consumer Reports would disagree with you.

As for your trouble with a Ford Focus, you had an under-powered car, which is the case with small rentals. If you bought a Focus, you could buy a more powerful engine. Nonetheless, I've had a Focus since 2000 had very few problems with it (that I didn't inflict either by smashing into concrete steps or ripping the mirrors off on pillars) and we've put over 200,000 km on it. It's built Ford Tough.

Anonymous said...

A Ford is a Ford, irrespective of from where it is acquired (i.e., rental dealer, dealership or direct from manufacturer). Regardless of the model I drove, it lacked basic rudimentary standards. In response to your claim of your particular Ford being "built tough", is that after all of the recalls applied to it?

David said...

You could always interpret Ford as the acronyms: "Found On Road Dead" and "Fix Or Repair Daily".