If Ford Motor Co. CEO Alan Mulally , formerly head of Boeing Commercial Airplanes in Seattle, needs a clue to why American automakers are losing>"/>
If Ford Motor Co. CEO Alan Mulally, formerly head of Boeing Commercial Airplanes in Seattle, needs a clue to why American automakers are losing to the Japanese, it's in the e-mail parable now floating around the Internet. It tells of a Japanese team (Toyota) beating an American team (Ford) by a mile in a canoe race, causing the Americans to study why they lost.
A team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Feeling a deeper study was in order, the Americans hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure how to utilize that information, but wanting to prevent another loss to the Japanese, the American rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, the Americans laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India
Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages. Toyota has spent the last thirty years building more than a dozen plants inside the US.
The last quarter's results: Toyota makes $4 billion in profits while Ford racked up $9 billion in losses. Ford folks are still scratching their heads.
But Mulally has scored one amazing result: In 2006, when Ford posted a record $12.7 billion net loss, he received $28 million for four months on the job. The previous eight months, he made a mere $7.4 million at Boeing.