Related: Automotive Production
After the first Gulf War ('91), when gas prices had risen and it seemed as though there would be a substantive change away from big vehicles (there had been some real changes and feints after the '73 and '79 oil crises), I happened to talk to one of the executives at one of the then-Big Three. The subject was manufacturing flexibility. Realize that Honda of America Manufacturing had been building Accords in Ohio since 1982, and Toyota had been building Camrys in Kentucky since 1988. Maybe in the case of the latter there wasn't a sufficient amount of time to mentally digest what was going on there in terms of manufacturing flexibility and capability, but it should be noted that there was the NUMMI joint venture between GM and Toyota that had been producing vehicles in California since 1984. However, Detroit didn't pay a whole lot of attention to what was going on in Fremont (not even people at GM).
There we were, talking about flexibility. And the executive in question told me about the blindingly fast changeover capability they'd achieved. It was measured in months. Admittedly, that was an improvement compared with past practice. There probably weren't any machine techs from suppliers on site so long that they joined the local bowling team. When I pointed out to him that Honda was able to change over its assembly line in a matter of days, not months, he responded with a tone of annoyance in his voice so solid that you could have walked around on it, "We make cars. We don't make motorcycles." When I tried to point out to him that I wasn't talking about the Marysville motorcycle plant, he was angrily dismissive. End of discussion. And that attitude is what has contributed, in large part, to the mess that the domestic auto industry is in. There had been a fundamental unwillingness to acknowledge that there were others with whom they were competing that had a better approach to manufacturing. It was, to bowdlerize an ode that doesn't deserve it, as though the Truth was: "Detroit is mass production, mass production Detroit-that is all Ye know on earth, and all ye need to know." Henry Ford put that assembly line in place in 1908, and for the subsequent years, what was to become the Big Three spent time optimizing mass production.
Flexibility is a matter of changing equipment and systems. While editors and reporters, unless they work for Advertising Age, I suspect, aren't supposed to do this, I'd like to point out that if you look at the ads that are in this magazine, you'll see the sorts of tools that are essential for flexible manufacturing. I dare say that there are few OEMs or suppliers who couldn't benefit greatly from this equipment or software, yet I suspect there would be a reticence to buy it: Times are tough, right? Does anyone think they're going to get any easier? But it is also about thinking-and doing. Another manufacturing exec at one of the Detroit Three is insistent he has plants that can make all manner of vehicles, that they are as flexible as anything that Toyota or Honda has. He's probably right. Unfortunately, there is a mass mindset at his company, so vehicles no one really wants get built; its flexibility is a talking point, not a strategic tool.)
Right now, pretty much every vehicle manufacturer on the planet is facing reduced sales. This is a global economic quake, not one that's limited here. But not all companies are as negatively affected as others. Those that have truly embraced flexible manufacturing are better able to accommodate the changes. I emphasize truly because nowadays there are far too many executives at the Detroit Three who cite The Machine That Changed the World chapter and verse, who imagine they are lean and responsive, and who may have some wonderful examples of manufacturing flexibility, yet are fundamentally still operating in the mass mode. When times were good, when people were buying pickups and SUVs like McDonald's hamburgers, it was back to mass optimization in Detroit. It was all about adding capacity for fixed, not flex. And we all know how that's worked out. So going forward, what will it be: fixed. . .or flex? I'm almost afraid to know the answer.