THEME SONG

Our State of the Industry series in this issue opens the new decade with much thoughtful discussion and some mixed optimism about an economic recovery.

Two business themes emerge from this: One is that the fabrication and metalworking community is carefully trying to avoid any slip ups in executing as efficiently and profitable as possible during these trying times. The other is that the companies who have survived to this point have retained their sense of purpose and vision and not strayed from the original intent of their mission.

At first glance, these two themes may appear to be obvious and lack distinction. But their fundamental importance to brand equity is being confirmed by an object lesson that is unfolding right before our eyes, inside a titan of the metalworking mighty that is sliding down a slippery slope: Toyota.

Think about it. As our minds drown in the unceasing propaganda about socialized medicine and thoughtless EPA bureaucrats pronounce air to be fatal to our health, the decline of once-untouchable Toyota has almost gone unnoticed less than two years after it swept past General Motors to become the world?s largest automobile manufacturer. How quickly the mighty have fallen!

There was a time not long ago when the Toyota brand was synonymous with quality. The ?Toyota Way? and ?Toyota Production System? paved the foundation of the entire ?lean? universe of manufacturing. Not anymore. The institution that revolutionized the way we build things now associates more with ?recall? than with ?quality.?

For example, its latest in a series of major recalls occurred in November, when 110,000 Tundra pickups were cited for excess rust that could cause the brakes to fail and spare tires to fall off. This came right on the heels of an October problem where the Japanese maker had to recall 3.8 million Toyota and Lexus vehicles because of floor mats that could jam the accelerator pedal due to a defective floor pan being loose or improperly mounted. 3.8 million. Talk about slip ups.

This is clear evidence the manufacturer lost sight of its mission: building decent vehicles as efficiently and profitably as possible. By pursuing volume at all costs and failing to place the needs of its customers first, Toyota not only jeopardized its once-stellar reputation for quality and reliability, but also lost its innovation to build exciting cars.

According to research by The Economist (?Toyota Slips Up, December 2009), the company?s market share has ?either fallen or been flat in every region in which it operates except Japan ? a market that was shrinking well before the crisis struck.? By losing its purpose and vision, Toyota has been slow to market in China, India and Brazil, the big emerging automotive markets of the future, and its hybrid technology is now being threatened by other big carmakers who are scrambling to bring low-emission vehicles to market quicker.

Most astonishingly, Toyota incurred a larger financial loss in the first three months of 2009 than ailing GM, which was preparing to declare bankruptcy. The bottom line importance of those two themes looms large.

That being said, Toyota can still straighten things out because it does not carry the deeper structural problems that GM had to financially offload. By returning to the purpose and vision of The Toyota Way and executing the original mission of The Toyota Production System, this manufacturer can rebuild the quality and reliability that created a once unmatchable brand.

That?s the promise that rings out of these two themes and the reason why they define how business is being conducted at the start of the New Year. Their fundamental importance can never be sung enough, in good times or bad: Avoid slip ups. Execute as efficiently and profitable as possible. Retain that sense of purpose. Keep a clear vision. Never stray from the original intent of the mission.

Obvious? Let?s ask Toyota.

Just a thought.

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Mike Riley is the editor of Fabricating & Metalworking magazine and the author of Backfield in Motion (Derek Press, 2007). Share your views with him on the fall of Toyota or other thoughts at 205-681-3393 or [email protected].