For anyone who wants to understand why the American car industry has been a failure for so long, I highly recommend The Machine that Changed the World: The Story of Lean Production.
This book has forever shaped how I view the car industry and manufacturing. The main lesson that I learned was that American companies are slow to implement change and fail to plan ahead.
Description from Amazon.com:
Japanese companies are sweeping the world, and the Japanese auto industry soars above the competition. Drawing on their in-depth study of the practices of ninety auto assembly plants in seventeen countries and their interviews with individual employees, scholars, and union and government officials, the authors of this compelling study uncover the specific manufacturing techniques behind Japan's success and show how Western industry can implement these innovative methods. The Machine That Changed the World tells the fascinating story of "lean production," a manufacturing system that results in a better, more cost-efficient product, higher productivity, and greater customer loyalty. The hallmarks of lean production are teamwork, communication, and efficient use of resources. And the results are remarkable: cars with one-third the defects, built in half the factory space, using half the man-hours. The Machine That Changed the World explains in concrete terms what lean production is, how it really works, and--as it inevitably spreads beyond the auto industry--its significant global impact.
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lynda: you can't place the blame for what's happened to the american auto industry solely on a vague description of "failing to plan ahead" and "slowness to implement change."
(if any of this is covered in the book, please ignore. i haven't read it.)
basically, the power of the UAW and health care are two things that the foreign companies don't have to deal with. i don't want to go into too much detail, but these are two reasons why this makes the american companies less agile:
one: "legacy costs" of having to pay health care for retirees, as well as current employees, is killing the americans. foreign companies, where the goverment provides the insurance, don't have to worry about this massive cost. perhaps if the americans had instituted a single-payer health care plan during the new deal, we wouldn't be talking about any of this right now.
two: the power of the UAW. did you know that foreign companies can have the parts suppliers in the same plant as the big company that does the final assembly? americans can't do that because the UAW won't allow it. it would cut down on the number of union jobs. of course, maybe now that hindrance will be removed if there are serious negotiations to save the industry. but it not that the americans didn't want to or try to implement efficiency changes like this. it's just that they couldn't, given the constraints of collective bargaining with the most powerful unions on the planet.
i wouldn't call the US industry a failure, as you've described it. the fact that it has been able to compete so long with the deck stacked against it should be viewed as something close to a miracle.
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