Reflections on Ford and the future of U.S. manufacturing Sunday, September 17, 2006 Twenty+ years ago, I was part of a consulting team examining the differences between Ford and the Japanese auto makers. We had access. Ford owned a slice of Mazda, so we became the first U.S.-based consulting team to make a detailed competitive analysis of the production economics driving U.S. and Japanese automakers. Three of us headed off to Hiroshima, Japan to complete a detailed cost comparison between a Mazda GLC and a Ford Escort, roughly comparable cars. We learned a lot of lessons. We found many sources for the cost differences: both hourly and salaried productivity and compensation levels, as well as materials usage and significant product and process design differences. But here is the main point: Most of these differences, we concluded, fell within the power of management and labor to address. Hearing the news this week from Ford, I flashed back to memories of Hiroshima. At the time, I felt that Ford's management was simply not getting the big picture. (Indeed, one Ford manager left early to attend a University of Michigan football game.) Japanese auto companies were managed differently. They were flatter, more nimble, more collaborative, faster. Ford managers continued to see issues in terms of costs not learning. Japanese automakers saw management challenges as opportunities to learn -- to innovate -- with the result that costs would naturally decline as everyone learned more. Each challenge stood out as a new learning opportunity. The Japanese taught me that innovation is a team sport. I'm convinced we have a bright future for manufacturing in the U.S. But only if we understand that older forms of industrial organization -- old mental models of both management and labor -- get in the way of our innovation. Job security for our hourly or salaried workforces no longer comes from contracts. Today, job security only comes from up-to-date skills that are in demand. That requires a willingness and ability to learn quickly and continuously: to innovate. As this commentary from today's Rochester paper points out, we need to think differently to manage this transition. Read more.) posted by Ed Morrison |		This work is licensed under a Creative Commons License. links Some Background on EDPro Weblog The purpose of this weblog is to help economic development professionals -- EDPros -- keep up with the changes sweeping our profession. Strap on your goggles. It's a whole new game. There are no experts any more. The only place to learn about economic development is from other EDPros who are doing it. One other point: the prevaling approach (paradigm, if you like) in economic development is shifting from competition to collaboration. There are a lot of reaasons underlying this shift, but here's the important insight: You, your community, and your region will do better by collaborating and sharing information. So, spread the word...Share the knowledge. Tell a friend about EDPro Weblog. If you are using a news reader, here is the link to syndicate this site: Here's the link if you are a bloglines subscriber: Speaking and workshops on Open Source Economic Development As the idea of Open Source Economic Development starts spreading, more people are asking about it. Visit the I-Open web site to learn more. My colleagues and I are happy to explain the basic concepts in a talk or a workshop. E-mail Susan Alshuler if you'd like to learn more about workshops and speaking. Background on Ed Morrison Download some background information on me here.

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