Tautology has raised it ugly head in Detroit where car company executives insist that the more people they fire, the more productive they become. So they fire more people each month and repeat the rationale.
The programs seem to be working, at least at the most superficial level. According to The Wall Street Journal "Detroit’s massive job cuts in the past two years have leveled the playing field for the Big Three auto makers and all but eliminated the substantial labor-cost advantage their Japanese rivals once enjoyed." It now takes GM (GM) about thirty-two hours to build a car versus thirty hours over at Toyota (TM).
That data has its faults and they are significant.
First, since Detroit makes cars no one wants, making them more efficiently does not gain much. Building the odd SUV or pick-up which will never be bought or will be sold at a humongous discount hardly gains the US car companies an edge.
In addition, and perhaps more important, Japanese car companies are increasing their production capacity even as they gain in worker efficiency. Detroit is destroying much of its manufacturing, which is a surrender to the future. It assumes that domestic auto firms will never gain back market share. It makes a mockery of the argument that their new models are so good that they will sharply increase sales.
A company cannot sell in great volume what it cannot make in great volume.
Douglas A. McIntyre
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