According to popular wisdom, the Chinese have no love lost for the Japanese. So wouldn’t it stand to reason that China would jump on the “down with Toyota” bandwagon with 2.6b feet? Just the opposite is true. The Chinese government urges caution, tells its auto industry to watch and learn, and to step up its quality. What’s going on here?
Frustrated Associated Press already complained that “China’s state-controlled media have made only muted comment on the recalls, in contrast to the blistering criticism Toyoda faced from American lawmakers.”
Now, an unsigned op-ed piece, ostensibly written by someone right at the top, appeared in China’s party newspaper People’s Daily, and was beamed around the world by China’s state-controlled news agency Xinhua. The piece doesn’t pile on Toyota. It exhorts China’s auto manufacturers to learn from Toyota’s troubles and to avoid falling into the same trap.
Toyota president Akio Toyoda’s deep bow to customers in the world’s largest auto market on Monday might not assuage the worries of purchasers of the car bearing his name, but his damage-control move was an example for Chinese auto makers who are drastically expanding production.
The “Toyota production system” was held up as the textbook method in the auto industry. However, super efficiency and quality proved to be incompatible. Toyoda admitted sticky accelerator pedals and other flaws that led to massive car recalls were related to the company’s speedy expansion in North America.
China witnessed a nearly 50-percent jump both in vehicle production and sales last year, making its auto industry a target for outside investment. However, complaints about vehicle quality from Chinese auto owners in 2009 increased by 40 percent, almost equal to the rise in output.
If Toyota — a veteran producer with a history of more than 70 years — made mistakes when it relaxed quality control, Chinese newcomers in the industry have no excuses for failing to pay full attention to monitoring their production lines.
The article appeared in Chinese in just about every Chinese newspaper, the English version was picked up in the Asian press. Even China’s Ministry of Commerce runs the article on their website. Reaction in the Western media was – how did AP put it? – muted. If it doesn’t fit the cliché that China hates Japan and likewise, and that China’s mission is to poison our dogs, children and dry-walls, then why confuse the dear reader?
Chinese read these newspaper editorials very closely since they represent directions from the top. I read it as having two major components. First, I would hate to be a chinese producer with a similar problem. It could result in severe punishment, ie serious prison time or even execution. Second, I read it as an exhortation to begin exporting. “Seize the opportunity” and all that. But why not? China is growing 10% a year. Japan and the US are growing at 0-1%. So in five years, China will have an economy 50% larger and the US will just be coming out of the recession. Many industries laughed at Japanese competition. It was not so long ago that “Made in Japan” was reserved for the kind of product that is “Made in China” now. To succeed in the United States, Chinese cars don’t have to be better than Honda. They just have to be better than Chrysler and do so at a lower price point than Kia. In Europe, they just have to match Dacia. That is possible within the next decade. For that matter, Chinese cars could sell well in Mexico, Brazil, Turkey, and other middle income countries.
Thing is, if China wants to break strongly into the US market, they’ll have to produce here, same as Kia is doing, and all the Jap and Euro companies. You can’t leave yourself vulnerable to the whims of financial markets, currency traders and politicians, you have to embed yourself in a market if you want stability. And I don’t think any competitive OEM here should have anything to fear from a Chinese firm, if they are truly competitive that is.
Correction: If you pour Melamine into milk and hide it, you can pay with your life in China. Nobody gets shot, or dragged in front of an inquisition panel for unproven defects.
What happens if you pour melamine into milk that’s intended for export only?
I don’t mean this as a Chinese thing, by the way. Many entities in many countries have done the same because the penalty for poisoning or maiming some abstract person in a far-away country is often minimal (if not functionally non-existent), while doing the same to your own carries a far-greater risk.
I would be surprised if Chinese corporations weren’t, well, like their counterparts on every country on earth in that respect.
The (or at least one) problem with Chinese “quality” is margin. When products are produced with little or none (due to market factors), then you “get what you pay for.” There is no intrinsic reason Chinese goods can’t be as well made as products produced anywhere else.
Perhaps the translation has skewed the text, but if the editorialist (I don’t mean Bertel but the chinese party member) didn’t mean “processes (including design, testing and sourcing)” where he wrote “production-lines”, then he was definitely wrong with “super efficiency and quality proved to be incompatible”, most likely wrong with “made mistakes when it relaxed quality control”, but very much right with “Chinese newcomers in the industry have no excuses for failing to pay full attention to monitoring their production lines”.
Toyota’s problem IMHO is not due to rapid expansion (this was just a Red-Herring excuse offered by Toyota), nor replacing quality control with efficiency (unless the editorialist is pointing to the very subtle issue of developing two pedal assys and using them everywhere, which i don’t think he was alluding to.)
Toyota’s problem was that the departments responsible for design, engineering, testing or sourcing (or that developed the fuel-supply & control system, or safety strategy, or designed and specified the ECU, or wrote the code, or sourced the related components), made some kind of mistake (mistakes more probably) within their areas of competence; not to mention the follow-on mistakes of inadequate monitoring or complacency as reports began to accumulate, and outright (possibly deliberate) slugishness once the shit started flyin’…
The editorialist at turns prooves he does not understand TPS, diminishes its powerful concept and at the same time misses the chance to reinforce an important lesson and add some homey advice (i.e. TPS is a great system, but everyone still needs to keep their eyes on the ball in the up-front processes) by replacing it with a false “quality vs efficiency” argument and his seeming “don’t forget to inspect quality into the part” conclusion.
Chinese companies would be wise to study the attitudes at Toyota Motor Sales USA and do the exact opposite.
I dealt with TMS in Torrance as a vendor from ’01-’04. What nose-in-the-air snobs. Anyone who was any good got “re-assigned” after two or three years.
Hi BB2: I don’t understand, “any good … reassigned” on which side of the relationship, TMC, or the supplier? I’d be very interested to hear some stories…
Ah, now if only we all lived in countries with state owned media and state owned manufacturers. Then we could all be smart and reasonable like the Chinese.
You mean like MSNBC, GM, and Chrysler?
both china and the US have state owned car manuafacturers… try again
and as for state owned media… i much prefer the BBC and PBS to the wonderful Faux News (thanks to the fake American Rupert Murdoch)