auto manufacturing – Page 2 – The OM Blog by Heizer, Render, & Munson

OM in the News: Tesla’s Sloooow Rollout

Tesla charging stations wait to be unwrapped.

When Elon Musk first unveiled the Tesla Model 3 sedan in March 2016, consumers stood in long lines at showrooms to place $1,000 deposits, giving Musk an iPhone moment unprecedented in the auto industry. When people stand in line at an Apple Store, they typically walk away with a new phone; the all-electric Model 3 had yet to be built. Overwhelming demand inspired Musk to announce in May 2016 that he was advancing Tesla’s production plans by 2 years. It would build 500,000 total cars annually by the end of 2018, rather than 2020—a fivefold production boost in just 2 years. For Tesla, which had no experience manufacturing cars in high volume, it has been a steep production learning curve, writes Businessweek (Jan. 15, 2018).

Tesla delivered only 1,770 Model 3 sedans to buyers in 2017’s second half. In August, Tesla said it expected to achieve a manufacturing rate of 5,000 Model 3 vehicles a week by the end of the year. In November the company back pedaled, saying it would hit 5,000 units a week in late March 2018, citing “production bottlenecks.” Musk stated he was on the “front lines” of production hell.

“They vastly underestimated how challenging it is to mass-produce vehicles, and quality should be their focus,” said one industry exec. On Jan. 3, Tesla delayed the production goal by yet another quarter, saying that it now expects to hit 5,000 units a week by the end of June, with a “focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time.” Concentrating on quality makes sense for the carmaker. A mass-recall would probably be far more damaging.

(Tesla’s stock, by the way, surged 43% in 2017, despite the factory setbacks).

Classroom discussion questions:

What are the OM issues that Tesla is facing?
Do a quick SWOT analysis on Tesla.

OM in the News: Ford Moves Its Small Car Production to Mexico

Ford’s factory in Wayne, Mich., will focus on making trucks and S.U.V.s, while production of smaller cars will be moved to a plant in Mexico

“There is no doubt that Nafta played a role in the migration of many American manufacturing jobs to Mexico in the last 22 years,” writes The New York Times (Oct. 19, 2016). Before the trade agreement, U.S. automakers barely had a presence in Mexico. Now, Mexico’s car-making work force is about 675,000 strong. And in a move that has drawn fire from critics of the Nafta, Ford is giving up on making small cars in the U.S. and plans to move production of its Focus compact cars from its Wayne, Michigan factory to a new plant under construction in Mexico.

Ford’s retooling of its Wayne factory, though, is a reflection of the industry’s desire to keep pace with growing demand for high-profit trucks and S.U.V.s, while continuing to produce less expensive models at lower costs with the cheaper wages paid in Mexico. Detroit simply cannot make money producing small cars in the U.S., where a UAW union worker earns about $29 an hour, more than triple the wages of a Mexican employee.

Detroit’s Big-3 auto companies are loath to close any existing facilities, both to keep peace with the UAW and to protect their billions of dollars of assets in factories in the U.S. that are already up and running. What’s more, plants like the one in Wayne are staffed by experienced workers and able to deliver high-quality products. .

It is unlikely, though, that any Detroit automakers will invest in new manufacturing plants in the U.S.. Mexico is simply too attractive an option for carmakers looking to add to their overall production capacity. “Nine of the last 11 auto factories built in North America have been in Mexico,” said one expert. “The fact is Mexico offers high productivity and low wages, and that is a hard combination to beat.” Ford is hardly alone. G.M. is investing $5 billion to upgrade its plants in Mexico. Toyota, Volkswagen, Kia, Honda and BMW are all adding jobs and new products there.

Classroom discussion questions:

Is Ford cutting U.S. jobs?
What factors impact major location decisions such as this?

OM in the News: It’s Getting More Expensive to Make Cars in Mexico

When car companies began flocking to Mexico more than two decades ago, the big lure was labor, which was plentiful and inexpensive. “Today,” writes The Wall Street Journal (Aug.15, 2016), “with an auto-production boom in high gear, those advantages are being chipped away.” Toyota, BMW, Ford, and several other auto makers have committed to spend a combined $15.8 billion to build new assembly plants or expand existing factories. That is on top of the more than a dozen plants already in operation and billions more being spent by auto-parts suppliers to keep pace.

The competition for employees—both finding and retaining them—is nudging up labor costs. The going rate ranges from under $1 an hour at some parts factories to nearly $3 an hour at the large assembly facilities. That is well above Mexico’s minimum wage of 73 pesos, or $4 a day. Still, it is too low to attract the quantity and quality of workers needed to fill the surging number of openings. Retention and retraining programs are becoming the norm as are bonuses for employees who agree to stay in place, especially those with valued skills. Some factories are luring recruits with perks such as a new cowboy boots. Vacancies are becoming the norm.

Auto-industry investment in the country accelerated in the 1990s after the signing of Nafta. In the lead were Detroit car makers and parts suppliers looking to avoid high labor costs at their unionized plants in the U.S.

Classroom discussion questions:

1.Why did so many auto manufacturers select Mexico?

2. What can OM managers do to retain employees?

OM in the News: Toyota’s New Modular Design

Toyota just announced a revamped manufacturing process—built on sharing components among vehicles—that the world’s best-selling auto maker says will produce half its vehicles by 2020 and slash costs. But its unveiling follows a path blazed in recent years by German rival VW—a reversal for the Japanese pioneer, whose production system was for decades seen as the gold standard, giving the world such manufacturing concepts as “just-in-time inventory” and “continuous improvement.”

As Toyota developed its new manufacturing process, it found itself chasing Volkswagen, which in 2012 launched vehicles built on its own new global manufacturing platform, reports The Wall Street Journal (March 27, 2015). VW’s effort to lower the huge development costs for 9 car brands produced a building-block system that allows it to develop platforms on which multiple brands can be built in the same factory and often on the same production line, a savings over designs that often required one factory per model. “It used to be: one plant, one line, one model,” said VW’s CEO. The system sets specifications for the basic underpinning of a vehicle and for attaching components from brakes and powertrains to engines.

The effort will save Toyota 30% of the upfront development costs of a new vehicle. Its so-called MQB platform allows multiple models, body styles and brands to be built in the same factory, reducing costs in several ways. The introduction of smaller manufacturing lines, for instance, is expected to reduce initial plant investment by approximately 40%. And the company’s new production process is built on much more expansive component sharing than its existing platform-sharing strategies. Toyota said it plans to increase the use of same or similar components, regardless of vehicle size and styles, allowing it to order parts in bulk and save costs through greater economies of scale.

Classroom discussion questions:

1. Why is the modular design so important?

2. What is the MQB platform?

OM in the News: It’s Raining Cars in China

Three years ago, China’s Chery Automobile announced plans to expand its factories to make as many as 1 million vehicles a year. But demand didn’t grow as planned. So Chery today has the capacity to make 900,000 vehicles annually—twice the number of cars it sold last year. Sales have slumped by 1/3 since their 2010 peak. “Chery is a classic case” of overcapacity, says a Shanghai-based consultant.

Domestic and foreign-based carmakers are building more factories in China than anywhere else, a construction binge that risks hurting margins, writes BusinessWeek (Feb.16-22, 2015). By 2017, there will be 140 car production plants in China, vs. 123 at the end of 2014. Factories across the mainland in 2015 will be able to build 10.8 million more vehicles than will be sold in Greater China. In North America, however, plants will churn out about 3.2 million more cars this year than the factories were intended to produce when they were built.

Overcapacity is only expected to get worse for Chinese carmakers. China will have about 11.4 million vehicles’ worth of idle capacity by 2017, more than double that of European automakers. Some carmakers already are regretting plans for Chinese plants that will open in the next few years. But that decision has been made and they cannot backtrack.

Foreign carmakers have been among the most enthusiastic factory builders in China, with Hyundai, Renault, and Fiat Chrysler among those that have announced plans or are already building in China. GM will soon sell Buicks made at a plant that opened last month, with plans to open a Cadillac factory later this year. GM has 22 factories on the mainland. Volkswagen, which is vying with Toyota and GM for the global auto sales crown, has 28 plants in China and will open 3 more within the next few years.

Classroom discussion questions:
1. What are some tactics for matching capacity to demand (see Supp.7)?

2. Why are auto makers flocking to China?

OM in the News: America’s Car Capital Will Soon Be… Mexico

By 2020, Nissan plans to produce a million cars a year in Mexico

“Seemingly overnight,” writes Forbes (Sept. 8, 2014), “Mexico’s automotive output has soared, bolstered by a flood of investment from foreign-based carmakers, including Nissan, Honda, VW and Mazda.” With $19 billion in new investment, production has doubled in the past 5 years to an estimated 3.2 million vehicles. The reason is simple: Mexico has some of the most liberal free trade arrangements in the world. It has agreements with 44 countries, making it an ideal export base for automakers from Europe, China, Japan and America. (The U.S. has agreements with only 20 countries.) The result: 80% of the cars built in Mexico are exported to other countries..

In recent weeks Infiniti, Mercedes and BMW have all detailed plans to build cars in Mexico, with Hyundai-Kia just around the corner. Audi is midway through construction of a $1.3 billion factory that will build luxury SUVs starting in 2016. Currently the world’s 8th-largest auto producer, Mexico is on pace to surpass Brazil this year. By 2020 Mexico should behind only China, the U.S., Japan, India and Germany, with an annual production of 4.7 million vehicles. Automakers like the young (average age: 24) and comparatively cheap (about $40 per day) Mexican workforce. But there are plenty of other reasons. European carmakers say Mexico’s dollar-dominated currency gives them a natural hedge against fluctuating exchange rates.

Nissan has led the way with its massive new 21-million-square-foot factory. It took just 19 months for the $2 billion plant, one of the largest industrial investments ever made in Mexico, to get up and running, a record for Nissan. Production of the Sentra began last November and was quickly ramped up to full capacity of 175,000 vehicles a year, operating 23 hours a day, 6 days a week. Some 3,000 jobs were created, and another 9,000 at supplier companies. The boom in Mexican production is already rattling the North American auto industry. Today 40% of all auto-sector jobs are in Mexico, up from 27% in 2000. Canada and the Midwest have taken the brunt of the job losses.

Classroom discussion questions:
1. Why Mexico?

2. What are the supply chain implications?

OM in the News: One Thing Isn’t New in Car Design

Ford modelers work on a clay prototype of the Mustang

When it comes to designing high-tech cars, writes The Wall Street Journal (June 2, 2014), auto makers still depend on clay models sculpted by hand—a craft that goes back to the industry’s early days. Designs for a new car may start with a simple sketch on a cocktail napkin. Sketches get turned over to a digital modeler, who fits the lines of the drawing over a digital rendering of the car’s engine, suspension and other chassis parts. The idea then goes to a clay modeler to be transformed into a series of clay models, usually starting with sculpture 4/10 the size of an actual car. But despite use of 3-D imaging technology that allows executives to see a virtual vehicle, the top brass at Ford won’t sign off on producing a new car until they see full-size physical models.

The pressure to produce new designs more rapidly intensified when competition in the auto industry went global. During the 1990s, auto makers boasted about how quickly they could bring new vehicles to showrooms as they slashed product-development times from 5 years to under 2 years by relying more heavily on CAD tools. The rapid decline in the cost of computing power moved the auto industry closer to a world where the mathematical models of a car’s exterior and interior surfaces could go directly to computer-driven machines that cut dies and molds for production. The problem, says Ford’s design head, is “digital projections can’t accurately show how light will play on a car’s surface.”

Once designers have a model about 60% right, they use an optical scanner to translate the clay scale model into a package of digital data. Milling machine can produce a full-size clay replica in one day. The clay-to-digital, digital-to-clay approach is now common. Designs go back and forth between clay and digital renderings, and are integrated with digital representations of the car’s chassis and other mechanical components.

Classroom discussion questions:

1. Relate this approach to the 6 issues for product design in Chapter 5 (see pages 165-166).

2. Why isn’t auto design all digital?

OM in the News: Humans Steal Jobs From Robots at Toyota

Toyota worker manually welding a part previously done by robots

Inside Toyota Motor Corp.’s oldest plant, there’s a corner where humans have taken over from robots in pounding glowing lumps of metal into crankshafts, reports BusinessWeek (April 7, 2014). “We need to become more solid and get back to basics, to sharpen our manual skills and further develop them,” said a company exec. “When I was a novice, experienced masters used to be called gods, and they could make anything.” These “gods” are making a comeback at Toyota, the company that long set the pace for manufacturing prowess. Toyota’s next step forward is counter-intuitive in an age of automation: Humans are taking the place of machines in plants across Japan so workers can develop new skills and figure out ways to improve production lines and the car-building process.

“Toyota views their people who work in a plant like this as craftsmen who need to continue to refine their art and skill level,” said Jeff Liker, who has written 8 books on Toyota. Learning how to make car parts from scratch gives younger workers insights they otherwise wouldn’t get from picking parts from bins and conveyor belts, or pressing buttons on machines. At about 100 manual-intensive workspaces across Toyota’s factories in Japan, these lessons can then be applied to reprogram machines to cut down on waste and improve processes. At the forging division of Toyota’s Honsha plant, workers twist, turn and hammer metal into crankshafts instead of using the typically automated process. Experiences there have led to innovations in reducing levels of scrap by 10% and shortening the production line length 96%.

Though Toyota doesn’t envision the day it will rid itself of robots — 760 of them take part in virtually all of the production process at its Motomachi plant — it has introduced multiple lines dedicated to manual labor in each of Toyota’s factories in Japan. Says one manager: “To be the master of the machine, you have to have the knowledge and the skills to teach the machine.” Adds a University of Tokyo professor: “Fully automated machines don’t evolve on their own. Sticking to a specific mechanization may lead to omission of kaizen and improvement.”

Classroom discussion questions:

1. Why is Toyota replacing robots with humans on some lines?
2. Why doesn’t every firm take this approach?

OM in the News: Ford Touts Car Parts Made From Plants

If you’re driving a new Ford, chances are you’re sitting on a seat filled with foam made from soybeans, reports the Orlando Sentinel (March 14, 2014). It’s part of the push by many automakers to produce cars that are cleaner and greener. Plant-based materials that are used now or are in some phase of development by Ford include:

1. Fibers from coconut husks that can be included in sound-absorbing underlayment for carpet.

2. Wheat straw that is showing promise as reinforcement for plastics.

3. Latex extracted from dandelion roots to produce natural rubber, potentially replacing rubber from Asia or synthetic rubber made from petroleum.

“We are a group of research scientists developing these formulations and composites and looking at non-traditional materials and implementing them in our vehicles,” says a Ford engineer. The long list of automobile parts and pieces made traditionally from petroleum ingredients include cup holders, floor mats, engine O-rings and seals, dashboard trim and many more. A typical car is made with 100 kinds of plastic materials that weigh a combined 300 pounds, which includes 30 pounds of seat foam. Ford requires plant-based materials to perform as well as and cost no more than conventional products.

Classroom discussion questions:

1. Relate Ford’s move to the “Triple Bottom Line” concept introduced in Supplement 5, Sustainability in the Supply Chain.

2. Why is Ford moving towards green manufacturing?

OM in the News: GM Discovers the Importance of Logistics

GM's stamping plant is now next to the existing Arlington TX assembly plant — GM’s stamping plant is now next to the existing Arlington TX assembly plant

For years, General Motors pounded out hoods, fenders and doors for its Tahoe and Yukon SUVs at plants in Ohio and Michigan and shipped them to its assembly plant in Arlington, Texas. Yesterday, reports The Wall Street Journal (Oct. 14, 2013), the auto maker officially opened a $200 million metal-stamping plant adjacent to the Arlington factory that reduces that travel to about 20 feet from machine to welder. Estimated savings: about $40 million a year in shipping costs.

The new plant, is part of a broader rethinking of logistics by GM CEO Dan Akerson to generate hundreds of million of dollars in new profit. “Any savings I can get by cutting my logistics bill goes right to my bottom line and makes us more competitive,” says Akerson. GM now sees logistics as representing the biggest potential opportunity to squeeze new profit from operations.

Co-locating parts-making and auto assembly promise higher quality and greater profit. GM and other auto makers say they can no longer put up with parts that arrive scratched or dented and have to be repaired. “Now, with the reset of labor costs, especially in the U.S., more efficiency in the plants and the importance of quality, we can finally evolve,” adds the CEO of GM’s largest parts supplier.

“The best way to describe logistics is waste,” says GM’s manufacturing chief. “It is moving productive materials from point A to point B. It has no value and guess what; it doesn’t mean anything to the customer. If you can squeeze that waste of the system then you can tactically improve your profit margins.” In addition to moving its own production, GM is encouraging parts makers to move or build new facilities closer to GM assembly plants.

Classroom discussion questions:
1. Why is logistics so important to auto makers?

2. What does “co-locating” mean?

OM in the News: Eiji Toyoda’s Death at Age 100

Eiji Toyoda at NUMMI California plant in 1985

Eiji Toyoda, a member of Toyota Motor’s founding family and architect of its “lean manufacturing” method that helped turn the automaker into a global powerhouse, died this week in Toyota City, at age 100. “Toyoda,” writes The New York Times (Sept. 18, 2013), “changed the face of modern manufacturing.”

Toyoda is said to have developed an uncanny ability to spot waste. “Problems are rolling all around in front of your eyes,” Mr. Toyoda once said. “Whether you pick them up and treat them as problems is a matter of habit. If you have the habit, then you can do whatever you have a mind to.”

In 1950, he set out on a 3-month tour to survey Ford’s plant in Detroit, then the largest and most efficient factory in the world. That year, Toyota had produced just 2,685 automobiles, compared with the 7,000 vehicles the Ford plant was rolling out in a single day. Mr. Toyoda was unfazed, bringing back a thick booklet that outlined some of Ford’s quality-control methods; the company translated it into Japanese, changing “Ford” to “Toyota” in all references.

Even as he aggressively expanded production at Toyota, Mr. Toyoda applied a manufacturing culture based on concepts like “kaizen,” a commitment to continuous improvements suggested by the workers themselves, and JIT production, a tireless effort to eliminate waste. Those ideas became a core part of what came to be called the Toyota Production System. “One of the features of the Japanese workers is that they use their brains as well as their hands,” he said in 1986. “Our workers provide 1.5 million suggestions a year, and 95% of them are put to practical use. There is an almost tangible concern for improvement in the air at Toyota.”

The methods Mr. Toyoda nurtured have had global influence, and Toyoda pushed expansion overseas, establishing the company’s joint factory with GM, called NUMMI. There he introduced his lean-production methods as part of a migration of Japanese auto manufacturing the US.

Classroom discussion questions:

1. Summarize the principles of TPS (see Ch.16).

2. What was Eiji Toyoda’s major contribution to manufacturing?

Video Tip: Inside Tesla’s Robotic Factory

If you want to show an example of all the high tech manufacturing tools discussed in Chapter 7, here is the perfect video for your class. In it, Wired Magazine (July 16, 2013) provides a tour of the 5 million-square-foot Tesla Motors factory in Fremont, California to see how CEO Elon Musk is rethinking how cars are built. Tesla Motors has kicked off production of the gorgeous Model S into overdrive, cranking out some 400 cars a week on one of the world’s most advanced automotive production lines. My wife and I are so impressed that we are scheduled to take the car for a test drive this weekend

A major automaker in Detroit or Japan can churn out 400 cars a day, and in fact the Tesla Motors plant had a capacity of 6,000 cars a week when Toyota and General Motors ran this factory in the 1980s and 1990s. But Tesla’s numbers are impressive when you consider the Silicon Valley automaker started less than a decade ago with a few engineers and mechanics shoving piecemeal components into a rolling chassis made by Lotus.

Tesla got the factory for a song from Toyota in 2010, spent about a year or so setting up tooling and started producing the Model S sedan in mid-2012. The automaker brings in raw materials by the truckload, including the massive rolls of aluminum we see in the 5 minute video that are bent, pressed, and formed to create the car. Those lightweight components are assembled by swarm of 160 red robots.

The bare body is shipped off for prepping and paint before joining the assembly line under the power of autonomous robots. The shell is ushered through the line as Tesla’s 3,000 workers work alongside their robotic counterparts to install the battery, motor, interior, and miles of cabling and components that help create the electric sports sedan.

OM in the News: Overcapacity Hits the European Auto Makers

About 3 years behind the crash of the US auto industry, Europe is now facing the same dramatic issue of too much manufacturing capacity, our topic in Supplement 7. Europe’s auto industry has suffered declining passenger-car sales in each year since 2008, and is on track to absorb an at least 7% drop this year. All told, auto makers there are selling about 20% fewer cars than they were in 2007, leaving many with mounting losses and far more plants, workers and production equipment than they can keep busy. “Europe is a mess,” says a leading industry consultant in yesterday’s Wall Street Journal (June 22, 2012)

european auto manufacture capacity — please click on the graphic to enlarge

Powerful labor unions and most European governments have been fighting efforts to close plants because of the jobs that are lost. As a result, auto makers keep their factories open but cut their hours and assembly-line speeds to reduce production. About 30 of the 98 European auto-assembly plants are operating below 70% of their capacity, levels that typically cause plants to run up significant losses.

Hyundai, an exception, is gaining share because of its low-cost production in the Czech Republic. Manufacturing labor costs in the Czech Republic, at an average €9.90 ($12.50) an hour, are below Italy’s €26.10, €35.60 in France and €34.30 in Germany. Hyundai’s CEO for Europe says some of his regional rivals are struggling because they either lack the scale or “make cars in countries with expensive and inflexible labor conditions.” Renault, Peugeot and Fiat each have a glut of factory capacity. When the Wall Street financial crisis hit in 2008, the two French auto makers took government aid packages that required them to keep plants in France open. Now they have some of the least used plants in Europe, at a difficult time. Renault’s small-car plant in Valladolid, Spain, is operating at just 38% of its capacity.

Discussion questions:

1. At what capacity should an auto plant operate? What are typical US rates?

2. Why is capacity such an important OM topic?

OM in the News: Mercedes Heads East To Hungary

Businessweek (April 7-14,2012) reports that Mercedes has began production at its new $1.07 billion factory, located in Kecskemét, Hungary to make its B-Class compact. By heading so far east, CEO Dieter Zetsche is betting that Hungary’s rock-bottom wages will allow the automaker to wring more profit from its small-car, luxury lineup. “This could be the final big plant by a European carmaker in the region,” says one auto analyst. “ The growth and expansion have shifted to Asia and Latin America.”

Hungarian workers are paid a fifth of the about $61 per hour German workers cost, so Mercedes will use the factory to profitably meet its goal of boosting sales 27 percent, to 1.6 million vehicles by 2015. The Kecskemét plant is the first new Mercedes factory since the brand began producing cars in Alabama in 1997. Manufacturing costs at the plant are 30 percent lower than in Germany. Lower production costs, including increased parts-sharing among models, are part of Mercedes’ plans to save €6 billion by 2017 to offset rising raw material costs and increased spending to lower carbon-dioxide emissions of its vehicles. With about 40 working hours spent to assemble the Mercedes compacts, the savings are about $2,000 per car. Daimler aims to reduce the average hours spent assembling a vehicle in Hungary to 30.

In Europe, auto sales are poised to decline for a fifth consecutive year in 2012. The region’s automakers will likely use about 65 percent of production capacity this year, down from 71 percent last year. The unused assembly lines could manufacture an additional 10 million vehicles. Given the capacity overhang, it will take plant closures and job cuts to make auto production in Europe profitable again, says Sergio Marchionne, CEO of Fiat Chrysler, who last year closed a Fiat plant in Sicily. In February, Mitsubishi also said it will stop making cars at its factory in the Netherlands.

Discussion questions

1. Why is Mercedes “heading east” to Hungary and “west” to the US?

2. Is capacity an issue with the firm? Other automakers in Europe?

OM in the News: The Fall and Rise of Quality in American Cars

An interesting perspective on the quality (or lack thereof) of American-made autos comes from the Fort Worth Star-Telegram (Feb.10,2012). For decades we have bemoaned quality problems in the industry, but until recently the situation was simply considered normal. It goes back to around 1915, when GM’s chief production guy told a reporter that his new model “would boast massive improvements.” When queried for details, he replied that Chevys would now have a mesh screen under the motor that “would catch all the screws and parts that came loose while driving.” Even as late as 1949, it was common knowledge that a Ford could not be taken through a car wash without its occupants being drenched.

And surprisingly, when MIT did its famous 5-year study of the auto industry, which was published as The Machine That Changed the World, it was pointed out that Mercedes put more man-hours into fixing vehicles after production than Lexus needed to build one of its flagship sedans–which had zero problems leaving the assembly line. Of course, it was the auto workers who would take most of the blame for the lack of quality in their cars. But for the most part, it was mediocre engineering –not just in vehicle design, but in factory layout as well. How else can you explain how Buicks occasionally ended up with Chevy dashboards installed–and that GM would refuse to replace them when the errors were discovered at the dealer showroom.

Perhaps the greatest untold automotive story this decade is that no company builds a bad car anymore. Thanks to the integration of Japanese design and production techniques, we will never see a car produced whose A/C compressor falls off or whose fenders come in different colors. Just as Mercedes had to compare itself to Lexus, GM and Ford had to measure up to Honda and Toyota–and to accept the principles of Japanese engineering.

Discussion questions:

1. Why is poor quality accepted in any product?

2. Has US auto manufacturing reached quality levels equal to Japan and Germany?