Academic journal article Public Personnel Management

Learning from Japanese Transplants and American Corporations

Academic journal article Public Personnel Management

Learning from Japanese Transplants and American Corporations

Article excerpt

Henry Ford began production of the original Model A in 1903. By the spring of 1914, Ford was actually turning out two product sat his Highland Park factory: Model T's and a continuous stream of enlightened industrial pilgrims that ranged from Andre Citroen, Louis Renault, Giovanni Agnelli (of Fiat), Herbert Austin, and William Morris (of Morris and MG in England) to, notable, Eiji Toyoda. Ford was exceptionally open in discussing his techniques with them and during the next forty years, the principles of mass production diffused throughout the industries of the world. In the early 1980s, a new pilgrimage route emerged, with the destination now being Japan instead of Detroit.(1)

Just as Henry Ford's mass production methods diffused throughout the world in the early part of this century, the Japanese production method, lean production, has begun to diffuse. This diffusion is occurring in two ways: the Japanese are building plants abroad, and the American mass-producers are adopting these methods on their own.

This paper will examine the relative success of Japanese transplants in the United States and American manufacturers, concentrating on the automobile industry, and explore some of the differences between the Japanese transplants and American corporations in the areas of organizational culture, leadership styles, selection, training and human resource development, employee attitudes, job satisfaction, productivity, and quality. Research findings on the differences between Japanese and American business philosophies will be examined. Finally, an assessment will be made of the relative positions of the Japanese and American automobile industries as they venture into the decade ahead.

Japanese Transplants in the United States

Honda made the Japanese automobile industry's first serious foreign investment with its Marysville, Ohio complex that began assembly in 1982. Nissan, Toyota, and Mazda soon followed. A total of 11 Japanese transplants and joint ventures between Japanese and American manufacturers has been in operation. This will account for slightly more than 20 percent of automobile assemblies in North America by the end of the decade.(2)

How are these Japanese transplants doing? They now assemble 1.4 million cars annually on the American mainland. Toyota and Honda each sell more cars in the U.S. than Chrysler. In 1982, Honda sold 195,000 made-in-Japan Accords, making it the fourth-most-papular seller in the U.S. In 1992, Honda will sell an estimated 390,000 Accords, the majority of them assembled in Ohio. The Accord has been the best-selling car in America for the past two years. In 1992, Accord has held a slight lead over the Ford Taurus for the first 10 months of the year. Ford offered deep discount and dealer incentives in the last month of 1992 to help the Taurus beat out the Accord. [The Accord finished a very close second in sales to the Taurus in 1992. It should also be noted that Ford included fleet sales (to rental companies, etc.) in their figures and Honda did not.] The Japanese now have approximately one-third of the U.S. car market.(3)

American Corporations

What about their American counterparts? In 1981, the industry began pressuring the U.S. government for protection from all-out competition, which resulted in voluntary import restraints taking effect in 1981. This unwillingness to confront the Japanese threat head-on is still going on - as evidenced most recently by the dispute over mini-van dumping in 1992.

General Motors' North American operations lost $7 billion in 1991, Ford $2.2 billion, and Chrysler $795 million. Part of these gargantuan losses could be attributed to the overall economy - car sales fell from 9.3 million in 1990 to 8.2 million in 1991, the worst performance since 1982. Most of the blame, however, must be put on loss of market share and the American producers' higher production costs and lower quality, particularly at 41. …

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