the tindog coffeehouse

The Wall Street Journal has a great explanation of just why the Big Three American automakers are in so much trouble while Japanese, Korean, and German companies aren’t:

It wasn’t that American auto executives were always malicious and stupid while the Japanese were always enlightened and smart. Japanese car companies have made plenty of mistakes, most recently Toyota’s ill-timed move into full-sized pickup trucks and SUVs. But just as America didn’t understand the depth of ethnic and religious divisions in Iraq, Detroit failed to grasp — or at least to address — the fundamental nature of its Japanese competition. Japan’s car companies, and more recently the Germans and Koreans, gained a competitive advantage largely by forging an alliance with American workers.

Detroit, meanwhile, has remained mired in mutual mistrust with the United Auto Workers union. …

The debilitating management-union relationship largely remains, however. In 1998, after GM moved some equipment at factories in Flint against the UAW’s wishes, workers went on strike for 54 days, costing GM $3 billion. While such headline-making confrontations have become rare, small-scale impasses occur regularly.

Not terribly long ago, says a Ford manager who must remain unnamed, Ford dispatched a team of welding experts to a factory to explore efficiency moves. The plant’s union leaders, fearing layoffs might result, refused to meet with the team, and the effort came to naught. UAW leaders aren’t bad people; far from it. But when everything is a negotiation, many things don’t get done. (Just ask any parent.)

Instead of begging for $25 billion in bailout money, GM, Ford, and Chrysler need to fix the underlying problems. As Mitt Romney wrote a few days ago:

If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

The American automakers need to study Honda. Study Toyota. Study Hyundai. Engineer to the level they do. Approach the management-labor relationship the way they do. Approach manufacturing they way they do. Why, after 30+ years of getting run over by the Japanese, have they not figured that out?