According to the New York Times, and Ford’s advertisements, quality is now equal to Toyota. I have two questions: Why did it take so long, and what has changed? Let’s look at that first question.
When Toyota first began to make significant inroads into our markets, it was because of quality. But that was 35 years ago. During the 70s the Big Three, and especially Ford, made the worst junk we have ever made. In fact, Ford received the largest recall in automotive history because of defective transmissions, and narrowly avoided bankruptcy. I helped make those transmissions, and was so disgusted that I was compelled to take notes, keep internal memos on bad quality, make an extensive collection of defective parts routinely assembled into Ford transmissions, and then write “A Savage Factory” based on what I had experienced.
Of course bad transmissions was not all that Ford made. They also made Pintos that exploded on impact and burned people alive. Later they made vehicles with defective ignition switches that caught fire and burned people alive. And that is not even getting into their SUVs that tended to roll over on sharp turns.
I do not want to just pick on Ford here. According to Consumer Reports, Chrysler made the worst over all quality of any American vehicle, and they advised against buying used ones, because people were dumping them and buying Toyotas. A discussion of GM quality would take too much space, so lets just say they made junk as bad, or worse, than Ford.
Why was quality so bad in American made vehicles in the 70s and 80s that 33 states passed Lemon Laws to protect consumers from the Big Three? There are three reasons, in my opinion. Reason number one, some high level manager, who no doubt received a bonus that would choke a horse, came up with a brilliant plan to increase sales: Planned Obselescence . They would engineer the cars specifically to break down sometime after the warranty expired, and keep on breaking down until people got sick of putting out money for repairs, and they would theoretically buy a new car. The specific parts engineered to break down were not necessarily expensive parts, but they were hard to get to. You might have to spring for $800 for a mechanic to rip your car apart to replace a $15 part.
Reason number two was pressure on vendors to cut costs, cut costs, cut costs. The vendors with the lowest priced parts are the ones who got the business. How did they cut costs? By cutting quality. They cut costs by going from 100% inspection to “statistical inspection” where every 20th, or 50th part was checked for quality. They cut costs by not maintaining their equipment. They cut costs by buying the cheapest raw materials on the market. They cut costs by upping the work load on their employees. The net result was the quality of component parts purchased by the Big Three steadily declined from the mid sixties to the mid eighties.
Now lets get to that third reason, which is covered in great detail in “A Savage Factory.” That reason is the never ending war with the work force. People were treated with contempt and disrespect. They were expected to be a machine, not a person. The work atmosphere in the auto plants was, argueably, the worst of any industry in the United States. There were periodic outbreaks of violence in the auto plants, including shootings, stabbings, and fist fights. I was attacked by a man slashing at me with a knife, and was a planned murder victum. Fortunately, the employee came to work so drunk he forgot to bring the gun into the plant.
UAW workers were not bad people. They were mostly good, hard working men who built up so much rage at the way they were treated that they fought Ford every way they could think of. And they thought of plenty. Sabotaging production. Sabotaging quality. Cutting wires on machines. One guy dropped a bolt into each transmission and it exploded on the test stands, like a bomb. He was terminated, proscecuted, and sent to jail. Sure, they made lots of money. In fact, some auto workers who never graduated from high school took home as much as a lawyer, or a doctor. But big money can only compensate for a short time when you hate the thought of having to to into work, and you phantasize about “getting back” at your employer.
So by the early 80s even the Big Three understood that they were losing the market to better built, more reliable foreign cars. They made half hearted attempts to improve quality, but ten years later American cars were still at the bottom of the quality charts, and Toyota, Honda, and Nissan were building plants in the U.S. and selling so many cars that they could not keep up with demand.
Ford paid Toyota to advise them on improving quality. They hired Dr. W. Edwards Deming to improve quality. But Dr. Deming, in his biography “The Father of Quality” stated that Ford management was the worst he had ever tried to work with, and he had worked with Xerox, IBM, Procter and Gamble, Toyota, and many others. He said they were like warring street gangs, and he walked out on Ford, unable to work with the incompetent management. By the turn of the century Ford, GM, and Chrysler quality was still at the bottom of the charts, and Japanese quality was at the top.
So what has changed? Several things. For one, the old, hardcore managers have retired, died, or taken buyouts, and been replaced by younger, better educated managers. The UAW has responded favorably to a better qualified management group. The classic example here is Allan Mulally, the CEO. Mr. Mulally is a top notch, no nonsense professional who started making changes immediately, and improvement at Ford, as a result, was immediate.
Of course there is the fear factor. Everyone is well aware that the U.S. Auto Industry is close to extinction, and fear keeps people working, and cooperating. Then there is the purchased component problem. Many components are now imported from China, Japan, and other low wage nations, which can compete pricewise, and still turn out a quality product.
Will it last? Will the U.S. Auto Industry come roaring back? I do not think so. I think Chrysler is a goner, with GM not far behind. Ford may survive, but it will be a hard, uphill fight. They will have to convince millions of Americans that they produce top quality, and will continue to produce top quality. The survival of Detroit is still an open question.