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Letter from Japan: Lost Chance
How this country threw its car industry down the drain
By PETER McKILLOP
September
8, 2000
Web posted at 8:00 p.m. Hong Kong time, 8:00 a.m. EDT
There was a time when the automobile was the symbol of the growing economic clout of Japan. Back in the late 1970s, even my mother traded in the old Ford Fairlane for a Toyota. It was a sign of the times. Our Toyota Celica was small, cheap and simple. It ran forever, never broke down, and it got 45 miles to the gallon.
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Japan was producing millions of these bionic cars at a time when Detroit built cars that could barely make it out of the showroom. The big Motown boats were dinosaurs -- symbols of rust-belt America, and a nation that had lost a jungle-fight to Vietnamese peasants and was run by a President whose policies were once described in a newspaper editorial as "more mush from the wimp."
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Japan on the other hand was indominable. It was ready to "invade Hollywood." It was purchasing America's "Crown Jewels" -- Tiffany's and the Rockerfeller Center. But most of all it was destroying its automotive industry. As television-shot after television-shot showed a seemingly endless line of Mazdas and Toyotas driving off massive container ships, out-of-work automotive workers in Detroit vented their frustration at Japanese cars with sledgehammers.
Today, the Japanese car remains a potent symbol of Japan. But this time, of its stunning economic collapse. In a span of a decade, Japan's automakers have gone from champs to chumps. Every day brings a new embarrassing revelation. Japan purchased an old American icon, Firestone, only to cover up a defective tire that is being investigated for causing 88 deaths and 250 injuries to motorists. Mitsubishi Motors is being investigated for a decade-long policy of cover-ups and deceit. Even more shocking, the once proud 'just-in-time' management is being pushed aside by a new generation of managers from anywhere but Japan. Nissan is now run by a Spaniard. Mitsubishi will also soon see its ranks filled with German executives. American executives from Ford oversee Mazda.
Japan still builds great cars. The only problem is the rest of the world has caught up and they can do the same. To make matters worse, as most of the automotive world went through a brutal restructuring, Japan's car companies refused to follow suit. Painful as the restructuring was, it unleashed a new generation of creative innovators who shook up the way Americans, in particular, purchase cars. Fast to the market, Detroit caught the wave of a generation of aging baby boomers who were trading in their BMS's for a more practical car, the SUV, or Sports Utility Vehicle. Japan, in its plodding way, kept up filling boats with old 4-door sedans that simply were not sexy or practical for a new generation of Americans. Before Japanese automakers knew it, they had lost their lock on the greatest automotive market in the world.
The situation is not hopeless for Japan because the problem is not
the cars, but the managers of the car companies. Japanese car companies
are tailor-made for a sweaty management workout. Perhaps one day the
auto will be yet another symbol; this time it will be one of rejuvenation,
both of the car industry, and of the economic vitality of the nation
as a whole.
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