Manufacturing

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TOYOTA

Wednesday, February 17th, 2010

Anyone who knows Toyota well will be saddened by the recall elephant trap into which the company has fallen so spectacularly. Recalls are not new and it needs to be pointed out that the motor industry has a necessary and brilliant record of successfully contacting an incredibly high percentage of owners when something needs to be looked at. It is right we should be good at reaching our customers – but when you see in a newspaper a rather timid advertisement announcing a defect on a white goods product you realise we are in a rather different and more effective league.

Clearly the sheer scale of the Toyota recalls has caught people’s attention but I think it is more the perception that because Toyota quality is such a given – the company virtually invented it – somehow Toyota should be immune from such tawdry events as a global recall. It isn’t and more importantly never has been but the company’s human frailty has caught the imagination and the question everyone is asking is “How could this happen to Toyota of all people?”  The question reflects the very high esteem in which the company is held and is rather asked out of bewilderment than criticism.

I have a view.

Toyota is enormously well run and its “right first time” and “continuous improvement” philosophies have swept the world and are emulated globally.

But the Toyota DNA which makes this possible is a deeply embedded culture, much of it written down but even more carried forward through the very soul of the company. When Toyota started its expansion beyond Japanese shores it was able to transplant highly trained people – invariably Master Engineers – to run these new Toyota enterprises, train local people in the Toyota way of doing things and genuinely transplant the culture. Such an example would be the Toyota plant in Derby which brought a seemingly radical new concept to the UK – of all places – and implemented it there and then.  Ably assisted by the hiring of Sir Alan Jones at its inception in 1990 becoming Managing Director in 2001. In those days a visit to the Burnaston, Derby factory was a mirror image of any Toyota plant in Japan and so successful was and still is the UK plant that product is now exported to Japan from the UK.

However, automotive globalisation took off at a pace nobody could have foreseen and it is my contention that many companies – and Toyota is just one example and so should not be singled out in the recall frenzy – have struggled to have anything like enough people available to insert the philosophy in new ventures around the world. In the early days it was a struggle because of cultural differences but it was done and successfully delivered and implemented. More recently having enough evangelists to utterly uncompromisingly deliver a new culture and a new way of doing things has stretched corporations sorely.

It is hardly surprising; these brilliantly successful techniques were honed to perfection in Japan and they were proved to be transferable with great effort and dedication. But when those valuable – in fact priceless – resources started to be stretched as I believe they were due to the pace of globalisation, one or two degrees of intensity and completeness were lost. Not intentionally, not by choice and certainly not spotted at the time.

Manufacturing excellence is a given for many automotive companies. Product reliability and perfection is now demanded and delivered. Phoning the boss to say you will be late for work because the car won’t start is no longer plausible.

I believe the pace of globalisation is resulting in the ability to deliver perfection through the culture we have come to respect to be under duress and threat. It can be put right, and Toyota will do so, but it will be so difficult for those companies who have preached perfection and continuous improvement to accept that for a while they will be the patient after years of being the gifted physician.

Christopher Macgowan

SO GM KEEPS OPEL AND VAUXHALL AFTER ALL…..

Wednesday, November 11th, 2009

In what can only be described as the mother and father of all U turns GM plans to stay in Europe with Opel and Vauxhall and scrap the planned Magna deal. Much confusion all round; re-structuring will still have to be carried out and money found in the UK, Germany and Spain to help it all along.

As a generality governments do not like surprises and it is obvious that Germany felt it had a high degree of control over the Magna deal and now looks to be back at the starting line in the new deal. Jobs being the watch word.

The saving grace in all this is that New GM has had the sense to temporarily transfer Nick Reilly from his present Far East duties to oversee the bedding down of Opel and Vauxhall after months of GM saying it did not want them. We all know Nick as an excellent operator who did his best to “save” the Luton car plant and looked surprised and in agony in equal measure on the day his then European bosses announced its closure. So there is a real chance that under his management he will make it work and maximise the alleged “improving market conditions” which made GM change its mind and keep the business.

In my opinion this global recession is forcing many companies to now do what they should have done before but which seemed a bit difficult in the good times so procrastination set in.  So I close with a heretical thought. Possibly, just possibly, this is the moment to drop the Vauxhall brand name? A thousand reasons will be produced why this simply cannot be done – but perhaps this is the moment to do it – especially as the European operations are not directly governed by the US Asset Relief Programme bail out conditions.

Christopher Macgowan

SMMT PROUDLY SUPPORTS SEARCH FOR YOUNG TALENT TO ENTER INDUSTRY.

Wednesday, August 26th, 2009

The Society of Motor Manufacturers and Traders (SMMT) is backing this year’s Autocar-Courland Next Generation Award seeking to attract young talent into the automotive industry.Open to all higher education students, the competition aims to promote careers in the motor industry and showcase UK talent. Entrants must submit a written response to the question: Where do you think the next automotive industry revolution will start and what will it deliver? Six finalists will be selected to go before a ‘Dragon’s Den’ style judging panel to present their ideas to top industry executives including SMMT president and chairman, Ford of Britain, Joe Greenwell. Proposals may focus on technology, politics, production methods, financial incentives, or all of the above, as long it’s within the scope of the automotive industry.

The winner of the award will be announced at SMMT’s Annual Dinner, 24 November at the Park Lane Hilton, and will receive one month’s work experience at each of the four partner companies (Ford, Harley Davidson, Honda and Marshall Motor Group) supporting the programme as well as a cash prize.

Entries can be made online at www.autocar.co.uk/next-generation  and must be received by 23 October 2009.

Christopher Macgowan

THE BIRMINGHAM POST.

Tuesday, January 6th, 2009

The Birmingham Post today launches one of the most important campaigns in its history - to urge the Government to acknowledge that the UK automotive industry not only needs, but deserves its financial support.

At the centre of the campaign is Jaguar Land Rover, the Indian-owned inheritor of the last of the truly great British car brands, and the vibrant centrepiece of an industry that powers the economy of not just the West Midlands, but the whole of the UK.

Unlike its predecessors - and some of its overseas cousins - this is not an industry facing a looming disaster of its own making. The mistakes and inefficiencies of the past are now firmly behind it, and the car sector is now responsible for considerable parts of all the UK’s research and development of high-value, sustainable technologies.

But that is threatened because of the collapse of global credit markets. All international companies such as JLR depend on access to credit simply to oil the wheels of business - and that essential ingredient has swiftly and dangerously been taken away. Owner Tata is a successful international conglomerate, but no company has limitless cash flow.

Without access to credit, JLR and others in the automotive industry will simply run out of the fuel they need to power their operations. In the worst case, this could lead to the demise of significant players in the sector - and certainly to the loss of thousands of jobs. But even the best case scenario has dire consequences for an industry that stands or falls on a pipeline of new product development that can take years to come to fruition.

A cash-strapped JLR would be forced to rein in its spending on research and development, and sit and wait for the recession to blow over. However long that may be, the company will inevitably fall years behind the developments of those international competitors who have already been helped by their governments.

The last UK car maker that fell behind the global market in terms of product development was MG Rover, a company too far gone to be helped by the time the government came along with an aid package.

But this is emphatically not a bail-out. JLR simply needs its lines of credit to be replaced by the lender of last resort: HM Government.

JLR is not asking for billions of pounds to be sunk into its coffers, never to be seen again. It needs loans, or loan guarantees of the type that until recently would be labelled ‘routine’, and it will repay them at full commercial rates within 18 months.

And neither is this a deal that would set a dangerous precedent, as JLR and its supply chain are almost wholly contained within the UK, unlike other manufacturers, whose activities here are outposts of a global operation. Their domestic R&D powerhouses are already getting the support they need.

So today, we urge the government to act to help our car industry compete on a level playing field in the global market. The scale of support for this is already overwhelming, as shown on our inside pages. We also are joined by our sister newspaper, the Birmingham Mail, and by titles serving regions that share our automotive heritage. The Coventry Telegraph, the Liverpool Echo and the Liverpool Daily Post all carry the same message today.

That message is for you, the reader, to show your support by making your views known on our websites, and by signing the e-petition on the Downing Street website here.

But our main message goes to one man in a position to act - Alistair Darling:

Mr Darling, businesses creating the value that fuels the real economy should not be left to whither while bailed-out banks sit on public money. That money was put there by you for the express purpose of getting the economy moving again.

Mr Chancellor, please use it.

> Visit the Birmingham Post’s JLR campaign home page

www.birminghampost.net

Christopher Macgowan

TO HELP OR NOT TO HELP……

Friday, November 21st, 2008

CBI chief Richard Lambert opposes big bailout for carmakers

Christine Buckley, Industrial Editor, The Times.

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Richard Lambert, the CBI Director-General, risked the wrath of Britain’s biggest industry yesterday when he said that UK carmakers should not receive large American-style bailouts.

His comments to The Times come after the Society of Motor Manufacturers and Traders (SMMT) petitioned the Government for a range of support, including loans to the industry. Fears are growing for the future of Vauxhall’s Ellesmere Port plant because its parent, General Motors, could go under next month. The unions have called for £13 billion in state support for the industry.

Mr Lambert said: “I don’t think any of us want to get into a world where the Government is deciding which sectors are going to flourish and which sectors are not. I remember that from the Seventies. Our job as an industry-wide body is to say let’s get the markets working, let’s not have government creating new channels of bureaucracy and political intervention. In the long term, it is not something we would all welcome.”

Mr Lambert is concerned about the knock-on effect if the big three US carmakers receive large bailouts and there is pressure for reciprocal action in Europe and the UK. He said: “I think it would be a bad outcome. There are lots of other sectors in a bad way. If you did that to the motor industry, what about the housebuilders? If you look at the housebuilders, what about the white-goods sector?”

The CBI chief did concede that other countries could put the British and European industries “in a place that they needed a short-term cushion to rebalance themselves”.

ACEA, the European car industry trade body, has called for a €40 billion (£33 billion) fund, a call backed by President Sarkozy of France and Silvio Berlusconi, Italy’s Prime Minister.

Unions in Britain want the Government to make £13 billion available across the car industry. It is thought that Ellesmere Port alone could need an instant award of £250 million if GM falls into bankruptcy.

Tony Woodley, joint general secretary of Unite, said: “UK car companies are productive and some of the best performers in Europe. Just as our Government has called for a global solution to correct the faults in the finance sector, so it is right that our Government acts to insulate the UK car companies while the problems within their US parent companies are tackled.”

Paul Everitt, chief executive of the SMMT, said: “The UK motor industry is seeking a package of support that helps stimulate demand and addresses a fundamental market failure. It will help sustain vital industrial capability and avoid unnecessary social and economic damage. The SMMT has argued strongly and consistently for measures to restore consumer confidence and boost demand. It is important that government does provide the right signals about the attractiveness of the UK economy for global automotive firms.”

Car production figures for last month, due out today, are expected to underline the industry’s poor state, reflecting a move by all carmakers to short-time working.

Mr Lambert also said that cashflow problems, which have hit small firms hard, were spreading across industry and that there was increasing worry about bank finance. He said: “There is a concern we will see a number of companies having their accounts qualified because they won’t be able to say with confidence that they will be able to get bank finance. It is all serious stuff.”

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article5202036.ece

Christopher Macgowan

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