Proudly Made in the US

Toyota is in deep trouble. Not only because of its latest recall for faulty break pedals, but for the recent hits to its reputation as a manufacturer of high quality cars. Apparently, the quality of Toyota manufacturing has been slipping for years now, and it now ranks 16th in the perceived quality, lower than such brands as Volvo and Volkswagen. Consumer reviews bash cheap plastics, crookedly installed glove compartments and dashboards. Analysts blame rapid growth and the desire to win the market share for the loss of quality of construction. It sounds like Toyota fell prey to the American virtues - corporate greed and globalization. The Toyota quality has been slipping since their cars began being built and assembled all around the world instead of just in Japan.

Lexus, on the other hand, is not being affected by the recall, and neither its reputation for safety has suffered. The reason? It has consistently been designed and built in Japan (with a small subsidiary in Canada where just a few dozen people are employed assembling their trucks). I was told by a Lexus dealer that at some point Toyota had an assembly line in the US, but then they had to close it because they could not enforce the same standards of quality in this country. Even under the Japanese leadership Americans were not capable of producing the quality output which was expected of them.

This does not surprise me. A friend from Germany recently built a house which he imported entirely from Germany as a kit, and he brought a German engineer to supervise American construction workers in its assembly. He had to let go of every American very quickly, and bring ALL of his carpenters, electricians, etc. from Germany to ensure the quality he expected and was used to. I hear that in Germany specialists sent to work by their companies to the US demand extra compensation for having to move here for a few years, just like they would going to some African countries. It did not use to be this way - it used to be prestigious and highly desirable for a German to go and have an experience working in America.

Incidentally, a friend who is a CEO of a large European company in the States (and a European national) shared that his company fired an American CFO and hired a Chinese guy instead. They pay him a lot less and his productivity is much higher, as in times higher. He said that from his experience, American businessmen are primarily concerned about the size of their bonuses, not the well-being of the company. The Chinese guy they hired lives in a small rented apartment, saves his salary and sends it back to his family in China. So we don't even have to outsource jobs to other countries any more. They can come and get jobs from us right here, on our turf.

Let me get this straight: we start assembling Toyotas, and their quality and reputation slips, we appoint American CFOs, and the companies (along with the whole economy) tank... Maybe it is not just the globalization, maybe it is simply that WE are not capable of doing anything right any more?