As Toyota Goes - Thomas Friedman NY Times June 17

[Coastie for Truth]

So I have a question: If I am rooting for General Motors to go bankrupt and be bought out by Toyota, does that make me a bad person?

It is not that I want any autoworker to lose his or her job, but I certainly would not put on a black tie if the entire management team at G.M. got sacked and was replaced by executives from Toyota. Indeed, I think the only hope for G.M.'s autoworkers, and maybe even our country, is with Toyota. Because let's face it, as Toyota goes, so goes America.

Having Toyota take over General Motors - which based its business strategy on building gas-guzzling cars, including the idiot Hummer, scoffing at hybrid technology and fighting Congressional efforts to impose higher mileage standards on U.S. automakers - would not only be in America's economic interest, it would also be in America's geopolitical interest.

Because Toyota has pioneered the very hybrid engine technology that can help rescue not only our economy from its oil addiction (how about 500 miles per gallon of gasoline?), but also our foreign policy from dependence on Middle Eastern oil autocrats.
<snip><

Some very good thoughs for the Energy and Environment forum--
1.Diffusing Toyota's hybrid technology is a key to "geo-green." What Freidman calls "Geo Green" is a political idea of combining into a single political movement

a) environmentalists who want to reduce fossil fuels that cause climate change,
b) evangelicals who want to protect God's green earth and all his creations, and
c)geo-strategists who want to reduce our dependence on crude oil because it fuels some of the worst regimes in the world.

On DU we know that the Bush team has been M.I.A. on energy since 9/11. Freidman argues forcefully that the Bushco's utter indifference to developing a geo-green strategy - (which, Freidman argues, would also strengthen the dollar, reduce our trade deficit, make America the world leader in combating climate change and stimulate U.S. companies to take the lead in producing the green technologies that the world will desperately need as China and India industrialize) - "is so irresponsible that it takes your breath away. This is especially true when you realize that the solutions to our problems are already here."

Citing Gal Luft, co-chairman of the Set America Free coalition, Freidman says the key to reducing our dependence on foreign oil is powering our cars and trucks with less petroleum.

There are two ways we can do that.

1) One is electricity, including hybrids and "plug-in" hybrids.
2) Flexible-fuel cars, which have a special chip and fuel line that enable them to burn alcohol (ethanol or methanol), gasoline or any mixture of the two.

Freidman closes with the observation that "In short, we don't need to reinvent the wheel or wait for sci-fi hydrogen fuel cells. The technologies we need for a stronger, more energy independent America are already here. The only thing we have a shortage of now are leaders with the imagination and will to move the country onto a geo-green path."

You can't look to the Bushco team for leadership. No way.

[idlisambar]

1. bumbling Friedman's heart is in the right place

The Bush team has been M.I.A. on energy since 9/11. Indeed, the utter indifference of the Bush team to developing a geo-green strategy - which would also strengthen the dollar, reduce our trade deficit, make America the world leader in combating climate change and stimulate U.S. companies to take the lead in producing the green technologies that the world will desperately need as China and India industrialize - is so irresponsible that it takes your breath away.

The "geo-green" strategy sounds like a fine idea, but Friedman's suggestion that GM be taken over by Toyota is not an ideal way to go about it. By reducing our dependence on foreign oil we would indeed decrease our trade deficit, but by increasing our dependence foreign autos, automotive components, and technology we would also be increasing our trade deficit. How many geo-strategists would be comfortable with what amounts to a shift in dependence from the Middle East to Tokyo (and Seoul, Berlin)? That's obviously a trade-off Friedman is willing to make.

Similarly if Toyota took over GM it is difficult to see how this would "stimulate US companies to take the lead in producing green technologies". It seems obvious that such a move would be much more likely to enable Toyota, a Japanese company, to lengthen its lead in green automotive technology. The stimulative effect on US companies is not so obvious.

Why can't Friedman come up with an example of a geo-green measure that would actually deliver on all of the positive effects he states?

[Coastie for Truth]

2. Toyota and GM already have one joint venture factory

just a few miles up yonder from me - the "NUMMI" factory in Fremont. (Matrix and Vibe).

The problem with GM is not (just) their cars. It's their (junior, middle, and senior executive) management - and their corporate culture or mindset. They need a "heart and soul transplant" and a "brain and psyche transplant" and a whole new corporate culture.

Hypothetically - if Toyota bought them - they would make still cars here with UAW American workers. They just wouldn't have the same old boy fuddie-duddies running the show.

[idlisambar]

3. this is hypothetical

In reality, it is difficult to see why Toyota would want to purchase GM in the first place, but if they did you are probably right that much of the assembly work would still take place in the US, just as Toyota builds a lot of its cars in the U.S. today.

Nevertheless, the final assembly of cars is only one small part of the process of auto manufacturing. Who makes the parts? Who makes the components that constitute the auto parts? Who make the materials that go into the components? Who makes the machines that make the components that constitute the auto parts? Who makes the materials that are used in constructing the factory that assembles the cars? Who gets to keep the profits from the sale of the car? Etc. Etc.

The lion's share of most of these processes would be carried out as they are today, by Toyota's group of suppliers and affiliated companies in Japan. Typically, only the least sophisticated, most labor intensive, and least technologically demanding work assembly work is carried out on American soil, to take advantage of the cheaper labor and political/marketing benefits of producing here.

GM's corporate culture problem is hardly unique to GM. Almost every American corporation suffers from the same problem -- an overemphasis on short term profits and shareholder returns. GM is just behaving like it should given the system that we have set up. In the overall scheme, it is our economic system and not GM/Ford or Enron or Worldcom, etc. that makes US companies uncompetitive.

[Larkspur]

4. The real problem with American business is American business Execs

and their corrupt and incestuous management styles.

My first car was a Toyota. It lasted me 10 years and 264,000 miles. My 2nd car was a Saturn SL2, whose Spring Hills, TN plant was patterned after Toyota's business model, and it lasted me 10 years and 330,000+ miles. My 3rd and current car is a used 2001 Saturn L200, which was built in Ontario Canada.

Toyota's business model is actually based upon the economic philosophy of William Demning, who in the early 1950's went to Japan and gave lectures on his quality control methods. Toyota and some of the other large companies followed Demning's philosophy from the CEO level down to the lowest paid worker. And it helped them get out of their post World War II doldrums.

All American businesses should follow Toyota's management model, but greed, not sound business practices, rules many American corporations.

[idlisambar]

5. That's only a small piece of the problem

Going deeper, the real question to answer is why American business execs are corrupt, incestuous, incompetent, etc. The answer is that our current system of capital formation and our economic and political system in general creates and promotes these monsters. The real story is not GM's problems, but what GM's problems expose about the weaknesses of American capitalism.