Ford Not "Blindly Copying" Toyota – They Ignore "Respect for People"??


Ford CEO Mulally shares Toyota's vision — Article from

Why does the USA TODAY tend to do a better job with Lean articles than the Wall Street Journal? This article is another example.

Here's an excellent article from USA Yesterday about Ford's goal to be like Toyota. Not to copy them, but to learn from them and get better, to be considered in the same league as Toyota. That's great advice for anyone, to not just blindly copy.

While [CEO Alan] Mulally is lavish in his praise, he's careful to draw a line. Ford is not trying to blindly copy Toyota, or any other company. But the Japanese giant â€š now the world's largest automakerâ€š is a worthy standard for measuring progress. “I've done a lot of benchmarking of Toyota over the years. I did it at Boeing,” he say

Does Ford have the cash cushion to be able to think long term? That might be easier said than done. Toyota can afford to think long term by paying workers for training time instead of car building time.

Like the Japanese company's famously long view, Mulally wants to look decades down the road, not months.

The article trots out the comparisons between Toyota and Ford, including the inevitable labor cost comparison:

Labor. There's no avoiding the fundamental difference between Toyota's and Ford's factories in the U.S: Ford is a union shop, and Toyota, by and large, is not. But Ford just negotiated concessions with the United Auto Workers that Ford says will save $500 million a year and make its labor costs fully competitive with Toyota's in the U.S. over the next of couple years.

Keep in mind that Toyota pays hourly wages and benefits in their non-union U.S. plants that are EQUAL to Ford's. Toyota just doesn't have as many retirees to support. There there is the only difference. Toyota is a union job in Japan, although the company unions are a different breed over there. So with the extra retirees, Ford would have to pay LESS in hourly real wages than Toyota. Is that the route to happy workers and quality?

Mulally has a good crisp description of Lean thinking:

“I clearly have been a student of Toyota for many, many years,” says Mulally in an interview. “I absolutely believe Toyota's fundamental premise is they are in for the long term, that they make products people want, and they are going to use minimum resources and minimum time to do that.”

He's patting himself on the back a bit with the “I clearly have been…” part, but he's got a pretty good understanding of Lean, it seems. He didn't mention “respect for people” in that crisp definition, that's the major nitpicking I would do, and as I think about it more, that's a major difference. Is Ford just trying to copy the “continuous improvement” part of the Toyota Lean definition that includes BOTH concepts – continuous improvement AND respect for people?

Our friend Jim Womack was quoted, as he's always the first one called for these stories. He added:

“The book's author, James Womack, credits Mulally for moving Ford to some of the basic strengths “blocking and tackling stuff”   that define Toyota. But he isn't ready to elevate the Detroit automaker to the same level.

“They have a hard time sailing in a straight line,” he says of Ford. Mulally has outlined a long-term focus for Ford's future, but Ford's history is filled with strategic zigs and zags. Things like an SUV fixation, a buying spree on luxury brands such as Land Rover and Aston Martin and former CEO, now Chairman, Bill Ford's insistence that Ford become the environmental automaker.”

What do you think? Can Ford catch up or exceed Toyota? Could GM do the same with a new CEO who was like Mulally, instead of Fritz Henderson, who is a few years younger than Rick Wagoner, but is also a finance guy who started his GM career at the treasurers office in New York?


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1 Comment
  1. Andy Wagner says

    I’ve always admired Mulally’s story.
    During the 1980s, Ford CEO Don Petersen was one of the highest ranking US followers of Deming. He worked hard to counter Ford’s traditional culture and move to one of employee involvement. Team Taurus, the first cross-functional product development team is the US, came together with a vehicle that ultimately reigned as a best seller for several years before neglect set-in.
    Petersen was a member of Boeing’s board of directors and introduced the manager in charge of Boeing’s new 777 program, Alan Mulally, to key members of Team Taurus.
    Mulally built the triple-7 team on the same principles: start with what the customer values, integrate engineering, manufacturing and the customer. One team, one goal.
    The 777 reigns supreme in it’s class to this day. While Airbus has competed well against Boeing’s aging 737, they haven’t touched the 777.
    I have said many times, Mulally is fundamental a “product guy,” an engineer, not a finance person. He understands at a gut level that a product company has to focus on customer value. You hear it from him in every interview, classic lean words like “adding value” and “continuous improvement.” I also like that he does it without making it a buzz word or flavor of the day.

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