PARABLE: An American & Japanese car company have a canoe race...

[yurbud]

I found this in a listserve. While Ford isn't the best choice for the parable, I think it shows the problem not just with Detroit but with Wall Street in general--they are so busy thinking about trying to skim money off the top, not just through stock value & dividends but by giving cushy exec positions to fellow trust fund baby friends, that they forget what the business is supposed to make or do.

A Modern Day Parable

A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River . Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was that the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program, with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

The ne xt year the Japanese won by two miles.

Humiliated, the American management laid-off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was outsourced to India .

This was all investigated by Congress with many hearings and a government panel was created. Executives from Ford got up early to fly to Washington in their private jets. The profit losses were unacceptable to the stockholders living in the Hamptons who now wanted answers and help from the government.



Sadly, the end.

Here's something else to think about: Ford has spent the last thirty years moving many its factories out of the US, claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US . The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses...

IF THIS WEREN'T SO TRUE, IT MIGHT EVEN BE FUNNY!

[JVS]

1. oh boy

:popcorn:

[sandnsea]

2. Thanks for the propaganda

Oh yeah, THAT's the reason American companies are having such a hard time competing. Thunks head.

Stop Repeating Right Wing Propaganda.

We can't compete because they have government sponsored health care and retirement - and WE DON'T.

The. End.

[Idealism]

3. Ford has been restructuring for the past several years

hence the loss.

And if you want to criticize executive compensation, comparing Japanese CEOs to their American counterparts, you will find all across the board American CEOs make several times more than the executives of companies in Japan. Its because their compensation is mainly linked to stock options. If anything, Detroit executives are underpaid by American standards (Just a fact, not my opinion, not saying all of them should be making 15+ million per year).

But then again, the numbers we are talking about is wayy more than the millions the CEOs get, they aren't the straw breaking the camel's back. Its legacy costs (pensions) and health care benefits. Toyota, Honda, and Nissan (if they maintain their prescence in the US for the next 50 years) will become unprofitable here unless they acquire vastly more market share than they already have. It will be due directly to the same costs that are choking the Big Three now.

[glowing]

4. Not exactly correct in the summary of thoughts.

Toyota makes more money because health benfits are nationalized in Japan. CEO's of the companies do not bring home nearly as much bacon. Toyota also has gotten huge incentives to build in the US. AND Toyota doesn't have a pension plan or Unions. So, employees work really hard, and aren't guaranteed a decent retirement after having invested their life's blood into the company... Also, Toyota hasn't been manufacturing in the US as long, and doesn't have as much overhead from retirement packages.... AND if we were in a national security crisis, would we want to give Japan the trade secrets to weaponry or war craft when they are the only one's left with any manufacturing equipment? Other than that the Ford explanation of how Management and Corporate America works is probably pretty dead on. Too much greedy piggies taken from the trough.. nothing left for the workers who sweat.

[theoldman]

6. You forgot to mention that a Toyota is more expensive.

Their parts cost two to three times as much as a Ford part.

[tomreedtoon]

5. And the UAW is stuck in bed with these guys.

And any time we tell a UAW member that American cars are crap - not because of the workers, but because of the management - they get all pissy and call us anti-union.

The UAW is like an abused wife who is codependent on her bastard of a husband. She needs to punch him in the snoot and find a man who'll support her and work with her.

[ingac70]

7. Having worked at Ford...

believe me, they are an apt choice for that little story. The fact they are in a better position than GM and Chrysler has more to do with luck, because the fucks running the show are just as stupid.

[MazeRat7]

8. That could be almost any fortune 500 company in the US...

Mgmt is bloated and top heavy. Committees are formed to form committees. Quality awards are given for doing a good job, but there is no guarantee you will have a job next week.

That's the thing about parables, often what they say has nothing to do with who was used as the characters.

Today the crisis is the big three, but there will be other non-union and union shops facing the same challenges because the concept of "management" in US corporation is layer on layer on layer.

The only reason I have survived 2 layoffs in the past year is I never went over to the dark-side of management, I remained technical. At the end of the day, they need good "rowers", if they want to get product out the door...

Peace,
MZr7

edit: To clarify, I have been laid off twice since Aug '07 and managed to find work shortly after in both cases.

[Joe Chi Minh]

9. A brilliant parable, applicable to the whole Anglo-American neo-liberal

ship of fools and knaves. Perfect! It's even applicable to our NHS in the UK. There are less staff enagaged in the medicinal care now than management and elsewhere.

Here is an interesting article on the results of 28 years of right-wing government:

http://www.mirror.co.uk/news/top-stories/2008/12/14/hospitals-that-kill-will-be-fined-115875-20970411/