Can US win small car war with Japan?
In a recent Miami News cartoon by Don Wright, the driver of a small car with a badly cracked front windshield leans out to warn another driver: "Don't go into Detroit. They're stoning Toyotas."
If Detroit automakers feel that strongly about the growing import share of the new car market, they're not letting on. They proceed -- at least for their public image -- on the premise that some American buyers always will purchase imports, but that their numbers will be far fewer once the US really enters the race with quantity small car production.
There are those who says that US automakers should be far more concerned about the import bite, now accounting for more than one-fourth of new car sales, than they appear to be. These critics insists that as the largest auto exporters to the US, the Japanese have a significant competitive edge in cost, productivity, and quality.
"Whether it's true or not, people tend to view foreign cars as being more durable," notes Gary Ciminero, an analyst with New York's Merrill Lynch & Co. His firm does not expect the import share of the new car market to fall back to its usual 10-15 percent level for another three or four years.
US automakers say that the Japanese often have a cost advantage of $300 to $ 500 per car once it arrives in this country. The Japanese assembly-line worker is paid only about half as much an hour as his American counterpart. Detroit carmakers say this financial edge is the result of a weak yen, America's free trade policy, and the difference in the two countries' standard of living. They say they are powerless to do much about it.
What they can do, they say, is build a better car. They insist that this country is the leader in design and engineering and that Japanese automakers have no inherent technological advantage in car production over their Detroit counterparts.
"The technology of design is no different," says Alex Mair, vice-president and group executive in charge of technical personnel at General Motors. He suggests that much of what the Japanese learned in the first place was picked up on from Detroit. GM, for instance, now is suing Toyota on grounds that the Japanese company copied its catalytic converter. "Another Japanese manufacturer paid us $1 million for it," adds Mr. Mair.
Detroit automakers concede that on the whole the Japanese, who have the advantage of newer plants and equipment, are more productive. But they quarrel with the accuracy of the comparisons some critics have tried to make.
They say that trying to compare output per worker per day depends on such variables as the degree of automation used, the finished state of parts supplied for assembling, and who puts them on the line.
"The Japanese probably have greater efficiency than we do, but we have no specific data for comparison," says Louis Ross, Ford Motor Company executive vice-president for product development. "We have a hard time determining what work content they do in their plants vs. what we do in ours."
"There's a lot of misunderstanding about the Japanese relating to automation, " adds William Harahan, Technical planning manager of Ford's manufacturing staff. "They're extraordinarily selective about what they automate, and the range varies to the same degree it does here."
The US auto industry has moved toward increasing automation in recent years -- particularly in areas of structural analysis and computerized testing. Most industry analysts say the trend is likely to increase with the massive move to new or modernized plants and equipment now under way as part of the shift to small car production.
Robots are costly, but their use is growing. One of their newest jobs is on assembly lines. In Chrysler's Belvidere, Ill., plant, which produces Dodge Omnis and Plymouth Horizons, 95 percent of the welds are done by robots.
Detroit automakers are well aware that the buying public is more quality conscious than it used to be. Automakers say the beginning design is crucial, rather than the post assembly line check for defects.
"If the design is poor, you can't build in quality by inspection," says Dale Dawkins, vice-president of American Motors product group. "The most important thing, however, is that there be an attitude about quality -- that it become a management priority."
Accordingly, the worker's attitude and involvement in what he does can also make an important difference in the quality of the final product.
"In the typical Japanese assembly plant there is no need for any testing of component parts," notes Ford's William Harahan. "They are assumed, based on worker integrity, to be quality products. At every station there's a button a worker can push to stop the line to correct a defect or catch an uncompleted component. . . . Peer pressure is an extraordinary thing."
Mr. Harahan says that he personally thinks the US labor force is "better educated and more innovative" than the Japanese and is potentially the industry's strongest asset.
Economic analysts also suggest that the day when the auto industry was a dominant force in the US economy, accounting indirectly for one of every six jobs, is also fading fast. The industry, they note, has been growing at a rate of only 1 or 2 percent a year while other parts of the economy have been growing faster.