DailyTech - Toyota, Japanese Businesses Losing Out

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Blog: Auto Toyota, Japanese Businesses Losing Out
Michael Barkoviak - February 3, 2010 7:26 AM

7 comment(s) - last by seamonkey79.. on Feb 9 at 9:20 AM

The worldwide economy has greatly hurt Japanese powerhouses

The Japanese economy continues to suffer from the prolonged poor global economy, with several of the country's largest and most influential companies suffering additional costly setbacks.

No. 1 carmaker Toyota recently launched a massive recall to replace faulty gas pedals, with Honda, the No. 2 automaker in Japan, also launching a 640,000 car recall due to prolonged window problems.

Toyota must now fix the problem as soon as possible while also working to keep consumers from switching to other automakers. Auto industry analysts now believe Ford, GM and Hyundai could benefit greatly from Toyota's mistake -- expect other automakers to offer similar incentives to car buyers.

JAL (Japan Airlines), which was a major Japanese airline powerhouse, recently filed for bankruptcy after several years of financial turbulence. Competitor ANA will now be responsible for more international flights for people heading to and from Japan, the company announced last month.

Each company may have branched out and expanded too quickly, which also is paired with a certain degree of cockiness and increased competition from rivals. For example, Toyota overtook General Motors as the biggest automaker in the world in 2008, but auto industry experts said the company's upper management wasn't able to properly anticipate future problems.

Sony also has struggled the past couple of years, with its PlayStation 3 game console too expensive for consumers. The company's LCD TV business unit also started off on an extremely slow note, and is now trying to battle back against Samsung and Vizio.

The companies must now revamp their global business practices, though Sony has cut the PS3 price, and is gaining ground with its HDTVs and Blu-ray players. Toyota will suffer a public relations nightmare for the immediate future, and is now being urged to come clean about previous gas pedal problems.

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even still

By AssBall on 2/3/2010 9:05:11 AM , Rating: 2

They might be falling on harder times, but even in poor shape they are doing better than most companies (*cough* Chrysler/GM. I don't see Toyota or Sony dissapearing soon, and they are resilient and should bounce back.

RE: even still

By inperfectdarkness on 2/3/2010 11:04:30 AM , Rating: 2

that...and their CEO's aren't going to take a half-billion in income for 5 years of work.

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RE: even still

By Oregonian2 on 2/3/2010 2:43:25 PM , Rating: 2

GM, I think, also used to have that glow of invincibility once upon a time. That said, Toyota and Sony aren't necessarily following GM's path, but it is a possibility.

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RE: even still

By AnnihilatorX on 2/4/2010 3:59:57 AM , Rating: 1

GM had its market share stolen by the Japanese. It's possible that another great power rising, e.g. China may change the landscape, but it's not a high possibility.

The reason the American lost out was solely due to production methods, not by magic or politics or rise of power. The old batch assembly method worked well for the US, where infrastructure was pretty much intact after the war. The Japanese had to invent efficient just in time lean production methods, which focus on reducing inventory (to save space and precious resources), and as side effects increases quality, lead time to market while retaining productivity.

The American car makers were too late to realize the more efficient production method because it's couter intuitive to them that a production line should not work 100% of the time, as to them at that time demand was so high and steady. The huge inventory means time to market is long, expensive. When the demand drops, e.g. depression, the huge inventory upkeep from old batch assembly methods would prove fatal.

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RE: even still

By Oregonian2 on 2/4/2010 3:16:30 PM , Rating: 2

quote:
The Japanese had to invent efficient just in time lean production methods, which focus on reducing inventory (to save space and precious resources), and as side effects increases quality, lead time to market while retaining productivity.

I forgot the guy's name, but the Japanese industry was built on a system invented by an American who went to Japan as a consultant and taught his methods.

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RE: even still

By bldckstark on 2/4/2010 4:51:48 PM , Rating: 3

You are referring to Mr. Edward Deming. Although Deming did teach many valuable lessons to the Japanese, they did their own follow up work and improved upon his theories to the point that they no longer look like his.

As to who is the next big thing, I point to the Koreans. They are performing the exact same magic trick that the Japanese did in 1/10th the time.

The Chinese have a long, long way to go to be a threat to any of the global car makers. They will get there eventually, but by then they may be irrelevant.

J.D. Edwards has as much to do with the rise of the Japanese automotive market as Deming did. He provided good clean customer focused data. The Japanese looked at the data and used it to their advantage. The American OEM's ignored Edwards for quite a while, then when they started reading his reports they offered excuses as to how the customers were wrong. The Japanese looked at the data and offered no excuses, they changed what the customer felt was bad.

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RE: even still

By seamonkey79 on 2/9/2010 9:20:23 AM , Rating: 2

Don't forget that after World War II, GM sent manufacturing experts over to Japan to teach the Japanese how to build mass production plants. Specifically, Toyota and Honda were given these people to strip mine ideas from. However, instead of taking already existing plants and upgrading them like American car companies had and have been doing for a great length of time (longer than just about any other industry, anyway), Japan really had no plants remaining after the war, so they were able to institute all of the ideas and theories that were given from day one, instead of adding them as time and money allowed over the following 50 years.

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