Corruption of the US Big Three

Why did the Big Three fall off the wagon? Comparing them with Japanese car manufacturers, we can see some difference in the stance of their management. In my opinion, from the management of the US Big Three, they seemed to have focused on “How many cars to sell” not on “How to make cars”. They have plenty of suggestions on plans to improve their sales and profits but they do not have many plans in the production sites or plans behind their development. Although I guess they were preoccupied with thoughts of how to make a profit using their cars as the article of trade, but with a lack of understanding of car production, you would wonder what sort of a company these people are managing.

Let me talk about the management of Japanese car manufacturers. Shoichiro Toyoda, Honorary chairman of Toyota Motor Corporation, throughout his time as the company’s managing director and chairman, told the people in charge of their new car development “to listen to the engine revolving and find even the slightest problem”. Eiji Toyoda, the previous managing director tested every new models himself and expressed his opinion to the factory even after he retired from the management team.

Osamu Suzuki of Suzuki Motor Corporation says “We, managing directors breathe the same air in the factory and think who we are. So I do not separate the main office from the factory”. Takeo Fukui, the president of Honda Motor says “We are in a business which is heavily responsible for global warming, so making fuel-efficient cars is not whether there is a restriction or not, but is our mission”.

All the Big Three including General Motors (GM) have a lot of unsolved issues such as payment of pensions and hospital bills, high wages and complicated relationship with the labour union. However, I think the reason for their delay changing like the large manufacturers in Japan and Germany in the development of environmentally friendly cars, efficient production, cost reduction and market capitalization, lies in their management frantically chasing profit without considering their production in the factories.

Three out of the four top managers of GM, including Richard Wagoner who resigned at the end of March, all have a financial background. Whereas, for example at Honda, all the presidents, including Mr Ito who is going to be the new president from the end of June, have exclusive experience working as the top in the development division of Honda Motor Co Ltd. The difference of having environmental skills is not an accident and this can decide a car manufacturer’s rise and fall.

GM who asked the US government for financial support and Chrysler who has already decided to carry out reconstruction measures after legal liquidation, are going to carry out new management revitalization schemes from now. Whatever they have in mind, they do need to employ some top brains who know the field. They might employ someone from overseas and this might eventually lead to a large scale change in the worldwide motor manufacturers.


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