The General is under siege!

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Toyota’s ascension is remarkable for a simple reason that it has reached top by borrowing ideas from the American car business early and improved them. Toyota executives spent months in the 1950s studying factories at the Ford Motor Company. In the same vein, Toyota’s first American factory was a joint venture with GM in California. Later on, Toyota followed American auto companies into making minivans, SUVs and luxury cars, straying from Japanese automakers’ original focus on fuel-efficient small cars. But Toyota departed from the Detroit model in a critical way. Where GM’s leaders followed the philosophy of ‘a car for every purse and purpose’, Toyota has always offered a limited line-up of vehicles. And today, its cars are oft en held up as models for GM and others to emulate.

“As far as pride, it hurts,” said Ricardo Yrlas, 52, a worker at GM in Michigan. Already the industry’s richest player (with more than $12 billion in profits in 2005), Toyota has the resources to invest heavily in newer technologies and products. Toyota’s largest market will remain the US, where sales are expected to rise 6% to 2.68 million vehicles in 2007.

GM needs to work hard to come back. “Right now they’ve got a lot of momentum,” said Hawkins, expressing worries that GM would never be able to take back the top spot after losing it. Looking back now, Tom Lynch, former manager at GM said he saw this moment coming. “We figured that we were going to have a problem,” said Tom. He oft en gave plant tours to visiting Japanese executives. “We taught them how to beat us,” he said.

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Source : IIPM Editorial, 2007

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