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Car Trouble - USA - Should We Recall the U.S. Auto Industry?
Analysis II: The Knowledge/Wharton College/ Pennsylvania UniversityPenn.,USA -21 Oct 2005: -- When Wharton management professor John Paul MacDuffie is asked to explain why General Motors and Ford continue to take a drubbing from their competitors, he thinks for a moment and replies: "You can dig into the particulars around products and manufacturing processes for an explanation, but I guess the broad impression is the U.S. companies don't tend to be good learning organizations, which is something Toyota and Honda are superb at."... Whatever the U.S. car companies have learned in the past year, they have learned it the hard way. Consider the opening sentence of GM's 2003 annual report, published 12 months ag "Here's what's new about GM's strategy this year: Nothing."... the 2004 J.D. Power Initial Quality Study says global competition is so fierce that Detroit may have to become accustomed to being a smaller player. "There is a structural situation that is going to make it very difficult for GM and Ford to keep from losing market share, and they have to be looking at trimming down their operations. They have got excess capacity and excess overhead, and some of it they can't get rid of overnight, like the pension liability and the health care costs. Those decisions were made 10, 20 years ago. Perhaps there's more opportunity for them overseas than their home market." (originally published May 4, 2005)
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