By on July 16, 2008

And now for a moment of tranquility...Maybe I should put "smart" in quotes. But then again, maybe I shouldn't. I was commiserating with a friend of mine the other night how are respective 401k plans lost a third of their value last quarter. In his case, it was actual money. He commented that he had a lot of money in Blue Chips. I told him that GM's stock is worth less than two gallons of (Los Angeles) gas. He asked why. And I explained that the General had made billions of dollars selling trucks, bought Saab and then redesigned their trucks while losing over 30 percent of their market share in a decade and that Mr. Wagoner got paid $14,000,000 for his troubles, pre-bonus. My friend was incensed. "How is that American? That sounds like some third world, nepatistic despot shit?" He has a point. And what of the Japanese, he asked. Well, I began, Honda now makes the best-selling car in the country, Mazda and Subaru sales are up and Toyota has the ability to shift gears (and production) when they sense a looming great depression crisis. He asked me why, what is it about Japanese culture that lets them succeed where Detroit just falls flat on its face? I have my suspicions. But, I'd rather just ask you.

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87 Comments on “Question of the Day: Why Are the Japanese So Smart?...”

  • avatar

    Slow and steady wins the race.
    Better corporate structure?

  • avatar

    Deferring personal gain for the good of the group?

    Any culture where people are willing to work themselves to death for the good of the company is bound to be successful.

  • avatar

    One clue is the dumbing down of western sillivization with PCness in the “education” system. “Oh Jonny and Jane, can’t fail 2nd grade, it’d hurt their self-esteem” (even though Jonny and Jane didn’t do bipkus all year in 2nd grade and can’t even read yet).

    My Mennonite friends got fed up with this crap and took their kids out of public schools after the 1976 school year. SAT scores for their kids (a congregation of 55 adults and children) in a one-room school house is higher than the rest of the state, virtually bar none. Virtually no criminality. 90% of the kids go on to join the church, become productive citizens, eschew drugs, alcohol and divorce and quietly live their lives, usually the men as carpenters and house builders (with a 12th grade education which actually gives them a higher “true” educational level than most Bachelor Degree graduates from Universities). You also have to take into account that during their K-12 education, they virtually learn the entire Bible inside and out. Their sub-culture is one of teamwork, strong work ethic and clean living.

    As for the Japanese, their work ethic is still strong, their cultural opinion of a proper education is high, their culture values team effort, and they value engineering degrees in a way that America and Scotland, to name two, only used to at the beginning of the industrial revolution – now, western sillivization only values greed, stupidity, power plays and lies.

    Hence the Japanese can easily eat our lunch. And are, and will continue to do so. Until and if we ever figure out how to live a little more like the Mennonites or like the Japanese.

  • avatar

    Shareholder structure is very different in Japan. While “end-user” shareholders are a mix of people just like in the U.S., many funds are company pension funds, that invest into one another.
    Add to the mix the traditional long-term view of Taoism and Buddhism, and you have companies that look not to the next quarter, but much further down the line.
    American capitalism really lost an edge when it started worrying only about short-term stock gains. In most businesses, the car business obviously being one, the long term vision will pay off much better.

    Add to that that in the case of the automotive industry, Japanese companies have not become complacent. I can’t attribute that to cultural factors, as other sectors of the Japanese economy are extremely complacent.

  • avatar

    Having worked for one of the Japanese OEMs. In a way, it’s hard to put your finger on how they do things the right way. They make mistakes too. I think it has a lot to do with:

    1) They think long term.
    2) Employees (at least the Japanese, not the Americans) do what is best for the company and not what is best for themselves.
    3) The Japanese benchmark a good product and try to match it in quality. Take for example the Cobalt. Anyone that signed off on the final product should be shit canned. They benchmarked the Ford Focus!! They should have benchmarked the Civic! The IP is shinier than the door panels! They don’t match. As far as mechanical, it’s ok.
    4) The Japanese doesn’t let American management make big decisions (see item 1 & 2).

    I worked as a Buyer for a Japanese OEM. Prior to my joining the company, the former Senior Buyer and Senior manager (both non-Japanese) convinced upper management to source a highly critical part to a Mexican supplier than had NEVER made this part before. It was a huge cost save (on paper). Well guess what. The Senior Buyer was promoted to Manager. Then I join the company and have to clean up his shit. The supplier couldn’t make the parts. There were line stoppages in the plant to rework the part on EACH vehicle. The supplier was debited and almost went bankrupt. The tooling was shit and I couldn’t get a supplier to take it over. Everything was retooled and moved. The price of the parts doubled. So it went from being a $2million a year cost save became a $4million+ a year cost. Fortunately everyone involved in this debacle has left the company.

  • avatar

    Longer term view.

  • avatar
    Jeff in Canada

    North Americans are Self Focused, Japanese are Company focused.
    Wagoner doesn’t give a sh*t if GM is around for the next 50 years, as long as it’s around for his lifetime.
    The Japanese culture revolves around the good health of the company being the #1 goal. Long Term focus with long term growth being top of the priority.
    The Top Exec’s at N.A. companies are focused on making as much money in as short a time frame as possible, without regard to the long term effects on the company.

  • avatar

    It may have helped the transplants to approach the US market with no preconceived ideas. They can look at market research with an unbiased eye and use that information to design what the market wants not what they think it should want.

    How is it that Toyota correctly predicted that many Americans wanted a Prius? Americans bought them even when gas was less than $3/gallon and the hybrid system would not pay for itself over time. A transplant successfully tapped into an subtle underserved market. The home team should have had the advantage here. Why didn’t they exploit it?

  • avatar
    Richard Chen

    Let’s not forget geography and natural resources: Japan is a mountainous country approximately the size of California and without significant oil deposits. Older cities have car-unfriendly narrow streets with obscure naming and scarce parking spaces.

    As a result, there were draconian rules and regulations: until 1990, there was a displacement tax upon engines larger than 2.0 (gasp!) liters, and width of cars was also strictly regulated – does 66.7″ ring a bell with anyone here? Kei-class cars, with a limit of 660cc displacement and 64hp, are exempt from urban regulations requiring ownership of a parking spot. Other regulations favor the frequent turnover of cars: it’s very hard to keep a vehicle for more than several years, don’t remember the exact number before it’s best disposed of (or sent to the UK).

    Despite, or thanks to, these and other measures, such as a post-WWII of an offensive military force, the Japanese car industry thrived. The manufacturers got, and still get, lots of practice making small cars. Frequent turnover of vehicles keeps junkers off the streets and new-car buyers in the showroom. Add in philosophical differences between business practices, along with a good helping of W Edwards Deming, and the rest is history.

    EDIT: about the whole collective vs. individual philosophy – as a first generation immigrant, I grew up with the former and take it for granted (leads to some occasional problems – whaddaya mean, I’m not supposed to smack other people’s kids when they misbehave?). To try to instill that into the next generation, though – I’m not sure the Mrs. (also 1st gen immigrant) and I can pull that off. If it matters: we’re both products of the public school system, and the kids will be, too, although the education-centric philosophy still applies – we read up on the school districts and test scores before buying the house. Our cars are cheap on purpose, because college educations are not.

  • avatar

    A couple of years ago SONY revealed their 50 year plan…

    I guess that having a culture where your nine top executives receive as much in pay as Rick Wagoner pulled in one year (in 2005) is pretty smart, too. (That was Toyota, in case you’re wondering.)

    They’re playing a different game, that’s all. They’re moving the community, we’re moving the individual, at the expense of community.

  • avatar

    ericthejet Says:
    July 16th, 2008 at 8:01 am
    Slow and steady wins the race.

    And the first post has the correct answer.

  • avatar
    Andy D

    A culture that places value upon honor,loyalty and obediance. Ancestors and elders are venerated. Versus a culture of individualism and devil take the hindmost ethics, topped off with a need for instant gratification. Having no sense of history, it gets repeated
    Each culture has it good and bad sides. In this case, the plusses of one contrast with the negatives of the other.

  • avatar

    It’s the root of Japanese culture: your country [company] before yourself. The Japanese automakers have a better corporate structure and are all about being prepared for when things get bad (could be stemmed from them negating to take out the aircraft carriers in WWII, hence their losing it). You don’t hear much about how highly paid their execs are or how much bonuses the CEO has gotten every year. In the same way they’re on the other side of the world, the way they operate is the polar opposite of Detroit’s money-grubbing 3…err 2.8.

  • avatar

    I would also add work ethic, loyalty, modesty, and selflessness. I have a Japanese cousin-in-law that works for a Japanese automotive contractor making various wires and cables. They really take advantage of her. She works 60-65 hour weeks, is underpaid, takes no vacation. She recently moved about 3 hours away from her job to help take care of her parents, but is still commuting everyday to the job. She won’t leave the company and find another job, no matter how much they abuse her. As Americans, we would tend to call this intense loyalty and selflessness stupid, and maybe it is. But imagine a culture where this is the norm, and you will start to see why the culture has such a competitive advantage compared to ours. Generally speaking, they just don’t ask “What’s in it for me?” as often as we do.

  • avatar

    I’m going to use a bit of my education here (Psychology major/Sociology minor).

    Basically what some of you are describing is the dichotomy between collectivistic versus individualistic cultures.

    In individualistic cultures (such as the North American and much of European culture) the individual is valued. People look out for their own best interests to a much larger degree than those in collectivistic cultures.

    In collectivistic (such as most Asian countries and Latin America), individuals tend to have a “don’t rock the boat” mentality. They work hard so that no one will speak ill of them, they tend to value group cohesiveness over individual interests.

    For example, an assembly plant worker in North America who dislikes their job would probably either quit or just do a shitty job.

    An unhappy worker in Japan would simply keep working as hard as possible because they would not want to be responsible for problems within the company which may effect other workers.

    So I believe that it is more a matter of culture than intelligence.

  • avatar

    The American business model typically only looks as far down the road as their nose. Considering the gestation period for car design, that is a recipe for disaster. Also, short term profit is put on the sacred altar at the expense of everything. If you can squeeze a few extra bucks out now, don’t worry that poor customer satisfaction will hurt you when they buy again in 5 years. And lets not forget the true hallmark of American business: “Me and Mine FIRST” Screw everybody else. Faced with that, the workers turn to a militant union so the can get theirs, too. Considering what I wrote above, who can blame them. So the auto industry carcass is picked over from both sides, and when there done, there ain’t gonna be much left, folks. This is what happened to Big Steel in the late 70’s.

    Contrast that to the holistic approach that usually is the hallmark of the Japanese model and the picture becomes quite clear.

  • avatar
    John R

    Has anyone seen the GT-R segment on Top Gear? The people there wait in a designated lane to get on a train! That alone speaks volumes! People get on the subway in NY like they’re running from rabid badgers!

    I took Japanese for two years in college and was a East Asian studies minor. What everyone is above is saying for the most part about the long term view and team work is correct and I have news for you China and Korea think the same way. Its not about being smart, its about working together.

  • avatar

    Japanese workers can be selfish too, but there are cultural limits on what they will do about it. I worked in Japan for a few years and witnessed the incredible sacrifice workers make for the company which is viewed as a collective entity instead of adversary.

    Customers were treated very highly, as they should be, regardless of how much they spent. Obviously relationships matter and culture plays a part there too.

    They make huge mistakes from time to time, but it’s how they learn and evolve from the mistakes that sets them apart. In most US companies nobody gives a shit as long as the product still sells, they wait until it adversely affects them. In Japan they fear the worse when something goes wrong, even if the impact on customers is small or unnoticed. THEY notice it and correct the problem. We are not seeing that with the D2.8

  • avatar

    I think a lot has to do with the end of World War 2. After the war, Japan wasn’t able to make much military strength, so their best people (engineers, managers, etc.) all went into the automotive, technology, and other sectors. In the States, the best people go into the military sector. That’s why the US has the worlds most advanced military, while the Japanese and Germans make the worlds best cars.

  • avatar

    The Japanese have always built fuel efficient cars, even when the americans had no use for them. But possessing logic, they could see that cheap gas, an nonrenewable resource, would not last forever. Therefore they built factories that are flexible. As for the Americans, maybe too many fumes from the 60’s.

  • avatar

    I have no idea how the Japanese tax system works. But I often wonder why US companies take profits and go on buying sprees instead of giving the money back to the share holders. I think that a large part of it is that fact that dividends are taxed twice, or higher than capital gains on stock sold.

    The problem with letting a company “diversify” is that it takes their eye off the ball. Look at GM’s adventures. Dumb dumb dumb. Not many companies call pull this off.

    Of course there are huge Asian conglomerates (Mitsubishi, Sony, Hyundi, etc.) too. Honda seems to do a pretty good job of leveraging their divisions to get more value (synergy).

  • avatar

    I tilt towards Japanese cars, and I speak Japanese, fluently.

    But let’s not get carried away here. Japanese are not “smarter” than Americans. But there are cultural differences.

    1. “Japan is an small island with no natural resources.” True or not (mostly true), that is basically the first thing you learn in elementary school in Japan. Japan thinks of the global marketplace as a fight for survival.

    2. Pride in all labor. Anything worth doing is worth doing well. The craftsman’s attention to detail extends to all aspects of manufacturing and service. This value isn’t particularly Japanese – I know plenty of shop hands in the US who have the same attitude – but it is more common. Just look at Wal-Mart vs. Jusco.

    3. Group identification. Toshiba has group exercises at 10AM, everyday. Even for office staff. People refer to themselves by the year they entered the company. The CEO only makes 10-15 times more than the first-year, and laying-off staff is the last resort.

    This doesn’t make Japan better than the US. The insistence on hand-made quality makes most things really expensive and inefficient. The group-mentality stifles talent and innovation. But for car manufacturing, it seems to work very well.

  • avatar

    Two words: entitlement and denial.

    People in metro Detroit think they deserve high paying jobs at one of the big three. We were so used to the good times, and reality has not struck everybody yet. The reason is there’s a bubble in which all employees drive domestic cars in the area.

    Drastic change is the only thing that will save them now.

  • avatar

    There is a very different level of respect between its workers and its management. Workers are encouraged to suggest improvements and stop production if they see a problem b/c they know all to well that defects and quality problems affect the buyer in the end and they lose long term.

    At Honda engineers who want the chance (not sure about Toyota) are cyclically transferred into and out of motorsports racing programs and normal car production giving them excitement.

    The Management and BOD of the Japanese Big 3 are engineers and understand issues and problems and see the long term effect rather than just numbers and counting days til their next golf outing.

    If you’ve ever visited Japan – I highly suggest you do. The people overall just treat each other with a much higher level of respect and they all work towards betterment rather than outdoing each other at each others’ expense.

  • avatar

    I’ve enjoyed reading the other responses to this topic so far. I think my thoughts mesh well with the previous comments about “slow-and-steady” and culture differences, at least at the managerial level:

    Asian car companies seem to have patience and conviction that the big-3 lack. Once a car hits the showroom floor, the big-3 would turn their attention and resources to “the next big thing”, while the Asians would work on incremental improvements.

    “Patience is waiting. Not passively waiting. That is laziness. But to keep going when the going is hard and slow – that is patience.” — unknown

    “He that can have Patience, can have what he will.” — Benjamin Franklin

  • avatar

    “slow and steady wins the race”

    Except in a 100 metres sprint. Then, it does pay to be quick!

    “Western” culture tends to regard MBA’s in abstract disciplines like Business studies and Management more than Engineering, Sciences and computers.

    It’s no coincidence that the one Detroiter who has the best chance at survival is the one who installed a pragmatic engineer who emulates Japanese practices.

    Also, Japanese managers learn their companies from the bottom up. There’s no entry at top flight levels. Fujio Cho (who was the architect of modern Toyota and the father of the Prius) was a lawyer, but learnt Toyota inside and out before he laid out his plans for modernising Toyota.

    I’m not a big fan of “management by force and bullying”. It’s counter productive and does more damage in the long term. I respect the Japanese way and try to use in my work and life.

    Detroit has world class engineers and they can hold their own against the Germans, British and Japanese. It’s their managers who are second rate….

  • avatar

    You have to remember some history. Everything the Japanese auto industry learned about auto engineering, manufacturing and selling they learned from the U.S. auto industry. They essentially copied the U.S. Industry’s architecture and designs. At first, they did a lousy job of it but they eventually caught on (late 60’s, early 70’s) and greatly improved their products.

    As time progressed, the U.S. auto industry stopped moving forward (late 70’s-early 80’s) and left the Japanese little that they could use so they were forced to go it alone. Most importantly, the Japanese learned what not to copy and created their own business model based on continuous improvement.

    The Japanese have done a magnificent job over the last 20 years in learning from other’s mistakes. But let’s not forget who invented the auto industry, the assembly line and the concept of interchangeable parts in the first place!

    No excuse for the U.S. auto industry of course; they have just become hide-bound and resistant to change as many industries (and people?) do with age.

  • avatar

    It sounds like they do all the things we used to do.

    Maybe its not that they’re smart, but that we’ve institutionalized corporate stupidity.

  • avatar

    The Japanese are not necessarily smart and not necessarily brilliant innovators, but they never quit trying things. I worked in the Japanese arm of a large American semiconductor equipment firm for several months. The office environment drove me bonkers. Everybody loved to go to meetings and there were dozens of them each day. Prototypes were the biggest kludges ever seen by mankind. Things got done at a glacial pace, in comparison to how things happen in Silicon Valley, but somehow the decisions taken kept nudging everybody along in the right direction and after a while the project just got on its rails. There is an inevitability about projects in Japan – they might not get done as fast or as “efficiently” as in the US but by God they are going to get done. Having practice in project management, tediously correcting slips and problems, over and over until there’s no drama and no panic, is one reason why projects in Japan have this inevitable, bulldozer quality.

  • avatar

    Why are the Japanese so smart?

    Compared to who and what?

    Or is this a polite way of asking why are the Japanese smarter than us?

    Look folks it is not a matter of intelligence regarding why the Japanese make better cars than us, it is a matter of focus and determination.

    Maybe the question for us in America should be: IF we are so smart how come we make such crappy cars?

  • avatar

    Poorly researched article. The Nikkei is also way down. The American stock markets despite their dismal performance are doing better than most stock markets. China and Europe are both experiencing real estate meltdowns and their stock markets are performing worse than the NYSE.

  • avatar

    Easy. Unions. In N.America the unions fight to keep plants open that should not be open because they are bleeding money. N.American worker mentality is that GM/Ford exists to provide them a job, not to make cars. And given recent “donations” by the Ontario government to GM, the government feels the same way.

    In Japan, is the other way around. Cars first, reward hard workers, fire bad ones. Everything for the betterment of the product. If the N.American big 3 could push the unions aside and do that, they might have a chance at competing. And might even create some jobs once demand for their product improved.

  • avatar

    I suspect a large part of the difference is that our culture is almost wholly aimed at the prosperity of the individual, while Asian cultures tend to be aimed at the prosperity of the group. While this may not be an indication of individual intelligence, one might wonder if one sees that we tolerate folks like Rick “how does this guy still have a job” Wagoner while he would long ago have been forced to commit commercial seppuku in Japan. Intelligent people might wonder when we watch corporate thieves lend money to people who obviously cannot pay it back, and then line up at the government trough to recoup their losses. And with all of the public facilities in need of repair in the U.S., an intelligent person might wonder what the hell we’re doing in the expenditure of billions trying first to damage another sovereign nation whose leader we happen to dislike and then to rebuild what we damaged.

    …perhaps it is about intelligence.

    Then again, we’ve got all these smart guys and gals whose full-time occupations are to find large amounts of money moving around the economy and take off a chunk for the privilege of “handling” it as it moves from one place to another. THAT certainly increases our “national security”.

  • avatar

    As for WHY they’re more collectively minded, I think it’s just because they have a sense of shame, and Americans don’t.

  • avatar

    The following is a well-known article I read some years ago now, which as much as any informed my thinking on Japanese business. It was written in 1992-3, but because so little has changed, it takes you a while to realise that fact (“A recent example from the evening news will make this point clear. Recently, George Bush went to Japan to open the Japanese market to US goods…”). In any event, I recommend it to anyone who wants to understand why the Japanese are successful at industry – and peripherally, why the loss of a domestic manufacturing industry is going to hurt the U.S. far more than some here seem to believe.

  • avatar

    Ummmm they’re unionized in Japan’s auto factories too frizzlefry.

    How about its all a matter of being honourable versus dishononarable. How many people in the US if given the chance would screw over someone else be it your customer, be it a your boss, your coworker, or your underlings if it was simply to your financial advantage? I think the answer is too many. Too many people simply don’t have honor and simply don’t do what they are suppose to do, especially if ts not to their advantage.

  • avatar

    In America when a mistake is made we ask WHO f*%ked up so that individual can be fired! This approach insures that the rest of us do not look bad! Does not matter if the project is a overall success or failure because our a$$es have been covered.

    In Japan when a mistake is made the question that is asked is what is f*%ked up and how can it be corrected! This approach insures that the whole team continues to look good and gets the project completed successfully.

    Needless to say one group will have a successful team already in place to start the “new” project in short order. This team worked together and successfully complete their project. They have also learned very valuable lessons about correcting mistakes using a team approach. By keeping the person who made the mistake on the team and working together to fix the problem they have built up a great degree of loyalty amoung all team members. That person who made the mistake is now a much better asset and will continue to give his/her all to the team that stood by him/her. The chances of this team having another successful project are great!

    This in contrast to the other group which now must build up a new team consisting of new UNTESTED players. The legacy of the failed project and that dude that got shafted has already created a negative atmosphere. Everyone involved must devote a good deal of time playing the game of CYA, which leads to a lack of trust among team members. Before the new project even starts the players are already jockeying for the one or two promtions that might come out of a successful outcome(another loss of focus). The compensation and rewards are already set for the top players regardless if they succeed or NOT so needless to say they do not have their total heart into it. Folks are not loyal to the company or project so you can expect key players to leave midway for better compensation elsewhere. The company or stakeholder is accostumed to failed projects so the support for this project is lackluster at best. On top of all of that the stakeholders somehow expect a major short-term returns on a long-term project or they will kill the funding! This team has at best a 20% chance of have a successful completion of their project.

  • avatar

    I don’t think the American automotive industry is a honest example of American business, it is an aberration from another age. I’m not a anti-union guy, but the end result over the years since Big Labor came on the scene is a bunker mentality between management elites and the “blue collar” work-force. Each side thinks (not without good reason) the other is trying to screw them, so they thrust and parry around the board-room table all day. End result is management who can’t be fired and union guys who you can’t fire. Rot and office politics ensue. You see this same moronic social dynamic of union vs. management thing going on in other industries like steel, coal, textiles, even public education. In all these endeavors the United States is now doing relatively poorly, yet in all those things America was the Gold Standard (just like the dollar!) at one point. Britain is afflicted with the same problem, and they do not even own one of their domestic marques anymore. That is where the ‘States autobiz is heading.

    If you look at industries that were created after that age, that do not have such a social dynamic going on (even if the industry still has a union entrenched in it) the United States does not weep for Japanese efficiency or German engineering. I don’t think one reader of this website is reading it on software invented in Europe or Japan, or uses a computer running on microchips designed in Europe or Japan, or uses a Japanese search engine, or thinks European movies and TV are the bomb. In a dogfight I’ll take a F-22 over a Eurofighter (did someone say “performance & handling?”) any day. The Europeans finally figured out how to build a big airliner forty years after the Americans showed everyone how.

    So I don’t think it’s that the Japanese are so smart, but that in the U.S. these pockets of old industry and the social mechanics of how they work – produced from the old days of greedy robber barons and myopic, militant social progressives – is being exposed finally as the disaster it always has been, especially now that we have something to compare it to.

  • avatar

    HPE says,…

    I started reading the link and stopped because I was laughing too hard to continue.

    Early in the paper, the author asserts that US TV manufacturing died because, due to Japanese policy, we were cut off from ONE small market, Japan, with an economy far smaller than ours, with a per capita income far smaller than ours, and therefore didn’t have the money to buy all that many TVs from us, anyway and the loss of this ONE small market caused the US TV industry to collapse.

    Right. Next time, try to dig up a report written by someone with an ounce of common sense, OK?

  • avatar

    You cannot make sweeping generalizations about that whole country and culture based on the performance of Toyota, Honda, and Mazda, that’s ridiculous. Those are 3 companies.

    Much of Japanese business and industry is incompetent, inefficient, and unproductive by American standards. Are you not aware that Japan has been in a lingering recession for a whole generation now? There’s a reason for that. Are you not aware that the Nikkei index is down 67% from its value in 1989? Since 1989, the US stock market is up 500% while Japan’s has lost two-thirds of its value, do you want to emulate that?

    The Japanese business-government nexus is rife with corruption to a degree that Americans could hardly understand. The government is so owned by construction firms and individual democratic expression is so stunted that Japan has spent the past 20 years ruining their environment pouring concrete on everything that’s not able to run away from the concrete truck — which is why Japan’s fiscal situation and national debt vs. GDP are exponentially worse than anything Americans ever dreamed of.

    Japanese officialdom and culture is so infused with lies that some people wonder if the Japanese any longer even understand the difference between telling the truth and telling a lie.

    Before you make sweeping generalization you guys should read a bit of international business news sometime, maybe visit Japan. Read Alex Kerr’s “Dogs and Demons” as a good introduction.

  • avatar

    Another big aspect is that corporate higher-ups take responsibility when they screw up. They resign or forgo pay for a certain period of time. There are risks and penalties for screwing around too much. Here a ceo is rewarded no matter how bad they mess things up.
    The pride in your own work idea is very strong in Japan. You see people working at McDonalds who take their job very seriously. I thought that was really depressing at first but in the end I feel as if the average Japanese worker is able to retain a shred of dignity, even in a crap job. Here we are just ground into submission and penury.
    There are a lot more reasons why they are more successful, but in the end I think it is mostly just their culture.

  • avatar

    John R says:

    Has anyone seen the GT-R segment on Top Gear? The people there wait in a designated lane to get on a train! That alone speaks volumes! People get on the subway in NY like they’re running from rabid badgers!

    I’ve seen that episode and was saying the exact same thing. To add to that, it’s an offence to speak on your cell phone while you’re either on the bus or on the subway. How’s that for being neighborly?

    Lets face it, the Japs have Americans beat when it comes to conducting business.

  • avatar

    corporate culture and work ethic

  • avatar


    It’s no skin off my nose whether you feel the information, and the article in general, is valid. I don’t agree with everything in it. But I posted it because I think it’s an interesting perspective on the QOTD and one which a lot of Westerners are surprisingly ignorant about. To wit, next time, it might help if you a) read the whole thing before you felt qualified to comment on it as a piece in its entirety, and b) get a bit of historical perspective.

  • avatar

    In the US the best and brightest are heavily incentivized to go to the most lucrative fields. Very different than the “salaryman” culture of Japan

    So our best talents go on to become financiers, lawyers, sales execs etc. The engineers and techies gravitate towards silicon valley, aerospace, defense, pharma and the dregs of our engineering talent goes to the big 3.

    Plain and simple. The US dominates industries where people are well compensated. Energy exploration, Software, Law and Investment banking are dominated by American firms.

    What young engineering student would want to work for bureaucratic union-choked dinosaur like GM when they can make 10x as much somewhere else, doing more interesting work?

  • avatar

    I don’t think one should read too much into Mr. Liebernman’s question of US vs Japan. While numerous volumes could (and eventually will) be written about the precipitous demise of the Big 2.8, it boils down to a combination of abysmal decisions in product planning and execution, piss poor short sighted corporate management, and inflexible, expensive labor contracts that over the years placed burdensome overhead costs on the companies. Also, an insular “Detroit” culture that blinded the 2.8 to the unfolding realities of the global market.

    In other areas of manufacturing the US is more than competitve and remains the standard of the world. For example, the US aerospace industry arguably remains the world’s standard in designing, engineering and producing leading edge aircraft. It always puzzled me why US aircraft manufacturers consistently produced the most well engineed, highest-quality, most advanced aircraft in the world, when at the same time the Detroit auto companies were mired in automotive technology and design philosphy dating back decades.

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    I was making generalizations based on years and years of research into different cultures. These are facts that I tried to relate to the automotive market. Believe me the dichotomy of individualistic vs collectivistic cultures is extremely valid and affects every aspect of a given culture.

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    Well, I don’t think the Japanese are really “smarter” — it’s just that the Americans are dumb as stumps. And I don’t really blame “the workers” at all — it is all 100% “management’s” stupidity here.

    But then again, I really “blame Ronald Reagan.” Oh, he probably wasn’t the beginning or the end of it, but the American automobile companies are working within the “relaxed corporate climate” that Reagan brought in — deregulating business, deregulating how they could work within the stock markets, and so on.

    I look back at earlier decades, and I can see “what made America great.” What built the country into a “super-power.” Most of that was accomplished around the turn of the 20th century, when our leaders were proud to be “trust busters.” No, you can’t just sit around and buy other companies to create more wealth — you have to BUILD PRODUCTS and/or PERFORM SERVICES and COMPETE in order to be successful.

    Minus the little “Great Depression” business, this was the bedrock of the US economy for years to come, and perhaps the most shining example was how the US manufacturing capability had plenty to do with winning World War II. After the war, the US automakers built vehicles that easily satisfied almost every American citizen, and some of the finest examples now fetch huge dollars at automobile auctions.

    Then, along came Reagan and his “deregulation.” Almost overnight, companies started closing down research and development centers (which, by the way, means that they utterly stopped developing products anymore), and started buying products developed offshore, and simply slapped their names on them and sold them in the US. And jobs started heading offshore, too.

    Meanwhile, the corporate heads now COULD just sit around and play in the stock market — it seems to be the virtual equivalent of “sitting in your parents’ basement, playing video games all day.” The concept of actually “competing” for a company’s benefit started washing away, and the US companies essentially just decided to “grab the low-hanging fruit,” and never really had to “work hard” to make a buck, ever again.

    I think the clearest example of this would be the Ford Taurus — which once upon a time, absolutely “ate Accord’s and Camry’s lunch.” But while Honda and Toyota improved and improved and improved their vehicles over the years, the suits at Ford decided to just sit on their fat asses and do NOTHING to compete with the imports — they just rolled over and let the imports take over a market that sells well over A MILLION VEHICLES PER YEAR. And yes, I call that “stupid.”

    Oh, sure, they were making plenty of easy dough grabbing the low-hanging SUV and truck fruit, but they utterly let their core car businesses shrivel up and die on the vine. Yet, I fully expect that these guys were putting their millions of salary dollars into well-diversified portfolios. “Why not use common sense and do the same kind of thing for their companies?” Again, it was just “stupid.”

    In the end, I do believe that the Reagan business changes allowed, if not outright encouraged, an even shorter-term corporate outlook. And the auto companies sure dove right into it. And the auto companies sure have made some of the most utterly ridiculous decisions imagineable. I really don’t think their current nose-dives toward bankruptcy have all that much to do with Japanese culture or anything like that — it all has to do with lazy, inept, incompetent management. In comparison, the Japanese managers have just exercised simple common sense, earnestly competing for every vehicle they have sold.

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    I think that it’s a serious mistake to assume that the divide is a cultural one. There are successes and failures on both sides.

    The US successes are historic, of course. For a time, GM was the largest company in the world. Ford almost singlehandedly invented mass production. They became the first global auto companies. They not only provided leadership for the rest of the market, they invented the market.

    Meanwhile, Daihatsu failed in its efforts to crack the US market. Mazda has come close to failure a couple of times, ultimately needed Ford to bail it out, and has managed to lose its position in the US midsized sedan market to the point that it is largely irrelevant here.

    It’s not the ethnicity, it’s the individual companies themselves. Much of what Japan has accomplished in the US during the transplant era has been led by Americans working for these companies. The labor has been provided by Americans.

    GM and Ford have been badly managed. If they had had good management in the past, they would be successful today.

    GM is the worst offender. Its ongoing problem is that it has blamed everything in the universe for what ails it, except for the actual source of its woes — its leadership. It would have failed a long time ago if it was a small business managed in this way; they’ve only made it this long because it takes decades for monstrosities that large to die.

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    John Horner

    Well for one they don’t send their managers to the Harvard Business School or any of it’s wanna-bes.

    The most striking difference between Japanese and American business culture is the dogged persistence of the best Japanese companies. They wear away at problems like waves against stones if need be while American managers all are focused on this quarter’s numbers and this year’s bonus.

    All-in-this-together vs. every-man-for-himself. Which team wins?

    “You have to remember some history. Everything the Japanese auto industry learned about auto engineering, manufacturing and selling they learned from the U.S. auto industry.”

    They also picked up a lot from the British. For example, Nissan got much of it’s start by partnering with Austin to build Austin designs, and gain access to it’s patents, in the 1930s.

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    After reading the responses I have come to the conclusion it is caused by the public education system.

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    While I totally agree that the US mindset is way too focused on short term vs. long term, and the MBA culture has seriously screwed up a lot of industries, I wonder why the oh-so-much-smarter-than-us Japanese tanked in Europe last month, worse than either Opel or Ford of Europe. According to an analyst cited in Bloomberg News, it’s because they misread the demand for smaller and diesel engines.

    So I guess they’re just as capable of screwing up as we dumb Americans are.

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    Richard Chen

    @John Horner: Ha! I didn’t know that Wagoner was a Harvard MBA grad, like another chief executive whose approval rating barely is above GM’s market share.

    Jeff Skilling of Enron was a Harvard MBA grad, too. They’re not all bad, though. Here’s Wikipedia’s list.

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    Americans are focused on the individual. Japanese are focused on the group. That’s why Americans invent stuff and the Japanese commercialize it.

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    Common sense is evidently extremely bewildering to the 2.8

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    This is an easy one.
    Their model is different. Engineers run the company, not bean counters.
    There was a cradle to grave loyalty between employee and employer.

    The US had that. There was a social contract. The boss made more than the employee but he/she was there to balance the needs of the stockholders with the needs of the consumers and employees.

    Are they smarter? Well think back to good old Yankee spirit IBM, XEROX, KODAK, (and then look how they lost their way — fat & happy) And Ironic to say it but how did we win WWII? We drafted a cross section of Americans (in college or not) and really had the best and the brightest. My parents were studying at NYU and the day after we declared war — they signed up.

    The GM of GM might like to turn the group around but he really wants one thing. His millions. It’s a pretty typical “I got mine attitude.”

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    John B

    Lots of interesting comments – to which I’ll add the following. Japan after WW II was thoroughly beaten in every respect – both militarily and psychologically. There was nowhere to go but up and given a good work ethic, various now well known Japanese companies began studying what worked elsewhere, particularly the U.S. It was the Japanese who took the work of Edwards Deming to heart ( ) while his work was largely ignored at home.

    As for blaming the unions, I remember a prof at B school saying management almost always gets the union they deserve.

    BTW – the Koreans were in much the same position as the Japanese, only worse off after years of colonization and the Korean War. The Koreans are doing much the same as the Japanese when it comes to gradual improvements in product design and quality control.

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    Such pitiful self-loathing, it’s ridiculous.

    It brings back memories when my parents used to point to the overachievers in my class and crown about their achievements while completely ignoring the achievements of me and my siblings.

    This QOTD has that same feeling: The B&B go on as the day is long about how Japan is this and Japan is that, while ignoring the successful stories of U.S. based companies like Apple, Intel, and Microsoft. The romanticized view of Japan (or Europe) is disingenuous because you’re viewing their culture and society in a set of very rose colored glasses that masks the obvious problems they’ll be facing in the future.

    For one thing, the ‘salaryman’ culture is a dying one. Place the credit (or blame) on globalization and the companies’ inability to no longer give out the same lifetime assurances to the younger generation or the desire for workers not to be handcuffed to one company for life. Either way, this ‘admired’ system that leaves you with no social or family life is going the way of the samurai.

    Another problem is the combined problems of an aging society and a shrinking population which threatens to decimate their workforce in a few decades. Outside of an explosive population boom rivaling the baby boom following WW2, the only way to stem this tide is with immigration, but that probably won’t happen given Japan’s strict immigration policies which some would say are borderline xenophobic.

    I don’t highlight these issues to bring down Japan, but only to get these notions out of people’s heads that Japan is the perfect society if we modeled ourselves after them the world would be a happier place.

    It was mildly entertaining when Europeans would use America as the punchline for their jokes. But I see now that it’s infectiously spread back to the U.S. and has mutated into a depressing wave of pessimism where people fail to see American success stories even when it hits them in the face.

    Call it blind flag-waving patriotism if you want, I’m just a guy who still takes pride in his own house, just like my parents taught me.

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    Funny how the focus here is entirely on Japanese culture, Japanese people, and strengths that they both have.

    Anybody care to look inwards, to see where the real problem lies? The problem is not that we are not Japanese. The problem is that we, Americans, have no concept of teamwork. We are individualistic SOB’s that would sooner stab the guy next to us than integrate our work with another’s. We are too worried that no one would notice our hard work, our contribution, our brains.. ME ME ME ME. Fucking retarded.

    It’s no surprise that a group that works together as a team can beat any collective of individuals.

    It also helps that their short term plans, as one Honda representative famously said, are plans that will be completed in the planner’s lifetime.

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    I forgot to mention this.

    – US Domestics have better computer systems (Financial, Purchasing, etc.)
    – US Doms have documented processes
    – Clearly defined job descriptions

    The Japanese Supplier and OEM that I worked for had little of the above. Everyday was a battle of who should be doing what. Everyday was an adventure. When US OEM Management was hired by the Japanese OEM, they were lost/clueless because the Japanese OEM requires you to be creative. There is no one/nothing to guide you when problems arise. This caused lack of action by management.

    The US OEMs always felt this would help improve quality. With the Japanese OEMs quality is due to culture/mindset/accountability and not because of processes and systems and beating up suppliers.

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    I’ve spent some time in Japan. I have a great deal of respect for what the Japanese are capable of. And, yes, their automobile companies are doing a much better job than our domestic ones.

    To see where the genius of modern American lies, you need to look to the fringes. It’s there where the “individualistic” nature of Americans has the largest inpact. Look at almost any American-invented or American-adopted hobby and you will find companies that show remarkable innovation in both product and market development. That’s driven directly by individuality both by consumers and producers. Traditional cultures simply don’t have this driving creational force in anywhere near the quantity that the US posesses it.

    We even do well in motorized transport. Two words: Harley-Davidson. Japan has been chasing Harley for decades and despite what one may think of Harleys (I’m more of a sportbike guy) they are a very well-run company that leverages their history, customer base and engineering talent to the maximum level possible. Then there’s Google. I seriously doubt that this company could have been possible anywhere else. Look at Boeing. They made a brilliant decision ten years back that there was no real future in super-jumbos. This meant taking a backseat to Airbus by turning their back on the mighty 747. The resulting lead in the meat of the market (250 pax highly-efficient airliners) will bedevil Airbus for decades to come.

    Then there’s financial services. It’s easy to criticize given the current market conditions. But there’s tremendous innovation in this industry from American firms that has yielded hugely to our GDP.

    I’ve said this before and it bears repeating: What America invents is new industries. So long as we keep doing this, we’ll be okay. The rest of the world will follow. I think that now, more than ever, we need to shed the pessimism and get down to our traditional business of creating the world’s foremost culture.

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    Johnny, I’m thinking a “Why are the Germans so smart” QOTD would be an interesting follow-up.

    Coming from a cultural background heavily influenced by the Japanese (Taiwan) and shares many of the same values, it’s not all Hello Kitty and used-panty vending machines. The “slow and steady” mentality works well in some cases, but combined with conformity, can stifle entrepreneurial thinking, radical innovation, create inefficiencies and breed insecurity in venturing into anything not thoroughly proven to work. Romanticizing the achievements of Japanese auto companies while pointing out the failure American automakers may not be the best example of representing either culture as a whole. Anime fanboys who want to live in Japan often overlook their xenophobic tendencies.

    Cronyism, nepotism and myopic business sense exists in Japan, just as it does here, in a different form, hidden inside the complex maze of the Japanese structure.

    rev0lver — You said exactly what was on my mind. Growing up, I was always taught not to “rock the boat”

    John R says:

    Lets face it, the Japs have Americans beat when it comes to conducting business.

    Depends on the business. It’s difficult to conduct business in Japan, or any “high-context” culture where they read into everything that is said and done. Words and actions must be carefully chosen, for fear of being insulting or impolite. For example, sitting down before an executive member is impolite and insulting. They’ll never say what they’re thinking, never say “No” while staying passive and going in circles, while the real deals are done by forging a personal relationship with the right people, outside of the office. Honor and obligation plays a big role–there are benefits and downsides to this too. For example, as a supplier to Toyota, you’ll be happy to have guaranteed business, but as Toyota, you may end up losing revenue through rising cost, even if other suppliers are cheaper.

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    This is a great thread. Almost every post has a good observation. Oh, a few nitpicks: some posters get carried away talking about America’s shortcomings. And I’d respectfully suggest that with two decades having passed since Reagan left office, he shouldn’t be blamed for current problems. (BTW: the biggest industrial deregulation concerned airlines. It was during Carter’s administration, and for the lowly traveler who pays for their own ticket, it’s been a boon.)

    Menno: another enjoyable post. But how can our public schools be part of the problem? Our teacher pay and education spending per student is WAY more than in Japan! Japanese schoolkids can’t be learning anything!

    bunkie: Yes, “we need to shed the pessimism and get down to our traditional business of creating the world’s foremost culture.” Creativity is the key. You didn’t mention it, but I would point out there’s no other nation with anything like the global cultural colossus (for good or bad) called Hollywood.

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    They aren’t smart, they just think, plan and act on with the long term in mind.

    Detroit on the other hand, can’t think, plan or act past next week, next quarter, or next executive bonus. No long-term thinking in Detroit, at all. No recognition of past mistakes either. How many times are they going to re-live all their past mistakes before it finally kills them?

    The Japanese automakers aren’t smart, it is just that they look like frikking geniuses next to the morons in Detroit.


  • avatar

    Let’s be realistic – there are only two consistently successful, independent Japanese automobile companies. They are Toyota and Honda. They don’t even represent the entire Japanese automotive sector, let alone all of Japanese society.

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    I think part of the answer must be that the Japanese looked at the world and realized that they had to build a better mousetrap to compete. The Japanese can sell only so many cars in Japan. The American companies thought they owned the US market. I wonder whether the Korean car companies will be eating the lunch of the Japanese companies in 25 years. Look at the Genesis. In other words, there is a strong desire and need to make it in a competitive marketplace.

    Ford now advertises that its cars are as good as Toyota cars. Well, who advertises that way? Most advertisers claim their products are better than the products of their competitors.

  • avatar

    I haven’t had time to read all the posts yet, but I could not wait . . . I apologize if this point has been made already.

    I find it ironic that the general tone here seems to be finding fault with much of the US individualist culture and the focus on the self. All of the US — particularly the management of the domestic car companies — are focused too much on me, me, me. Not enough thought given to the general good or the long term.

    This from the same group of people who apparently would never look 2″ beyond their own pocketbook on subjects such as generally available health care, or supporting their own local/national economy.

    I bet the same psychology that drive the Japanese to stay with their company in spite of being overworked also would drive them to support their own domestic industry even if an imported alternative provided a better perceived value. Perhaps they would feel shamed at parading around with a shiney new imported product, knowing that their neighbor recently lost their job in the same industy. Or their pension. Or their healthcare.

    Obviously we don’t give a damn about trivial details like this.

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    60+ posts in the middle of the day talking about the American lack of dedication to their jobs. What’s the antonym of irony?

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    That’s the one of the best comments/insights I have ever seen on the internet.

    Way to go

  • avatar
    Phil Ressler

    The Japanese are not smarter, nor is their current advantage in automotive manufacturing explained by cultural differences, though they are influences to their extant success.

    Far more important, automotive manufacturing is still a tier one business in Japan, which competes for and attracts that country’s best business and management talent. This is no longer true for the United States. Automotive manufacturing, while vastly important, is no longer the aspirational industry it once was. It is now effectively a second tier business that fails to compete for this country’s best business talent. And the transplants aren’t looking for the business innovators among us. They are looking for and hiring very good process-competent managers who can extend a brand proposition established back at HQ in Japan.

    We have other successful entities working to the quarterly imperatives of our public markets. We have other manufacturers regularly demonstrating high-quality design and manufacturing. We have other sectors where Americans lead in grasping and anticipating a market’s wants and shifts, against intense competition. However, whether in software, media, pharmacueticals, entertainment, aerospace, armaments, semiconductors, CPUs, financial services, specialty metallurgy, our areas of advantage are directly underpinned by their competitive advantage in attracting talent.

    The Detroit 3 are now and have been for over 20 years “has-been” alternatives for beginning a career. Their competitiveness for the kind of managerial talent that rises to executive ranks has been tanked for years, hence you get Wagoner today. It’s hampered by location (southwestern Michigan and surroundings eliminates automaking as a career option for many aspiring executive types when starting out), culture (nobody ambitious views hidebound culture as opportune) and the bleed-out of mentors. The best people do not want to toil in a comparative provincial urban backwater, pummeled by bad weather, fighting an NIH and smug management culture that thwarts action and responsiveness at every turn.

    Japan is fielding their 1st String against our 3rd String in the global auto-making business.

    Meanwhile, Japan as a country has been in a prolonged economic funk for about 15 years. It’s people share much less of the nation’s prosperity than do Americans. Their economy retains some glaring domestic inefficiencies in many sectors. But as a resource-poor island nation it exports relentlessly as a matter of national strategic imperative. It’s as though they’ve attracted the talent comparable to what was needed to go to the moon, for an everyday task.

    Meanwhile, Steve Jobs and Apple swiped the consumer portable music market right out from under them. Sony no longer competes for Japan’s best and brightest as they get squeezed between the Koreans and Chinese.

    Our Detroit 3 have among their ranks excellent engineers and imaginative designers, and for those skills, these companies are still aspirational employers. But the business side management has been derived from America’s 2nd and 3rd Strings since the early 1970s. Don Petersen was likely the last US 1st String business executive of his time at the top of a Detroit auto maker.


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    The Japanese are a breed apart. Especially good with details, but able to not lose sight of the big picture.
    Somehow, I doubt even Toyota would stoop to cutting costs at the expense of product durability.
    Detroit coasted for 20 years on customer good will that had been built up over 40 and 50 years. Once those customers got burned, and stopped coming back, Detroit’s goose was well and truly cooked. And with so many other good vehicles available, who is left to buy from the 2.8?

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    The Japanese know that a good product sells better than a crummy one, and compete with each other to improve their products every time they change it. In Detroit, bean-counters trump engineers, so products are dismal to start with, and whenever products are changed, they are cheapened up “to improve profits”. Then when a model needs replacing, usually three or more years too late, it is designed from scratch, throwing out all lessons learned about the previous model, instead of evolving it to make a better product, as the Japanese do. Also, quality is always just “good enough to get by” instead of best in class. You really DON’T have to be Japanese to be that smart, you only have to care.

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    The 2.8 are just tired.

  • avatar

    Are the Japanese better in anything else but cars?
    Computer processors are designed in the US
    Intel, IBM, AMD
    Service businesses are perfected in the US
    Starbucks, WalMart, McDonalds, FedEx etc
    What about CocaCola? Revlon, Maybelline?
    Medical equipment-GE
    How about Harley Davidson?
    The Koreans are taking over the consumer electronics business with Samsung and LG
    Hyundai is the largest builder of cargo ships.
    How about Siemens? A German company that is the leader in power generation equipment.

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    What a load of bollocks! The Japanese are no smarter or dumber than anyone else, nor is national mores and culture a significant factor. Japanese industry was basically able to start from scratch after ww2 and enshrine best practices within the company proceedures, that said this pretty much only applies to two Japanese car companies, Toyota and Honda. Mitsubishi and Nissan have fairly recently been on the verge of going down the toilet more ignominously than Ford or GM…at least GM execs have not been rumbled lying about recalls to save money.

    If we look beyond the Auto Industry for a moment, McDonalds are a Japanese company are they?, People were queing up at 2am last week to get a Panasonic iPhone were they? Blaming inherent cultural differences is a smokescreen to avoid neccessary introspection by a company.

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    How about Harley Davidson?

    Not a good example. The Japanese collectively own 70% of the US motorcycle market.

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    History, culture, education, geography drives Japanese to efficient modes of transportation. They must build efficient cars domestically and SE Asia must have efficient cars. Result is proven products right for high gasoline prices. Detroit is still operating with the 1950’s planned obsolescence bigger is better model.

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    I agree with the first post “slow and steady”
    One my clients is Asian. She told me how the asian culture does not give up, when it comes to solving problems, they keep trying. How many of us remember when Toyota’s first came out. I remember they where not that great, the cylinder head would crack around 70,000 miles. And now …

    As many mentioned, the US auto industry lost touch what was going on. Might be too late for them now, but they should have some key reps(labor and mgmt) from the big 2.8, drive out to NorthEast or West Coast, rent a room at the Motel 6, and hang out at various mall parking lots, and see how many asian cars are there.

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    There is a definite cultural aspect to this. One of my favorite anecdotes from a Tom Peters management book was about the US forklift maker that was getting complaints about hydraulic drips only from their Japanese customers. They were mystified, since the units in question came from various factories. Why were they only leaking in Japan? The answer: turned out they were leaking in every market. But only the Japanese kept their factory floors clean enough for it to be noticeable.

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    “She told me how the asian culture does not give up”

    Bit of a broad statement isn’t it? Asian is merely a geographical term, there is no such thing as ‘Asian Culture’.

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    @golden2husky, who wrote: And lets not forget the true hallmark of American business: “Me and Mine FIRST” Screw everybody else. Faced with that, the workers turn to a militant union so they can get theirs, too.

    Thank you, thank you, thank you. If I ever hear another conservative mega-capitalist type say that unions are un-American ever again…they couldn’t be more wrong.

    Also… many of the responses (and the question itself, to some extent) smack of ‘model minority’ stereotyping that is affixed in our reactions and descriptions of many people of Asian descent. The generalizations of ‘Asian culture’ (a monolith that obviously doesn’t exist) tend to speak to that, in my opinion. We do know that ‘Asians’ include folks of Japanese, Chinese, Korean, Indian (from India), Filipino, and other heritage, right?

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    faster_than_rabbit- and it takes how many companies and how many models to get that 70%? You’re essentially saying that 1 company has almost 30% of the market because BMW, triumph, Ducati etc can’t amount to much at all.
    HD definitely has the large and expensive classes hands down.
    I’d actually like to see an American car company more like Harley. A company that knows exactly who its audience is and only makes cars for them.

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    Gee, I thought the people in the US would be more team-oriented than individualzed. Perhaps I confuse US with “us”.

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    Altoids: This doesn’t make Japan better than the US. The insistence on hand-made quality makes most things really expensive and inefficient. The group-mentality stifles talent and innovation. But for car manufacturing, it seems to work well.

    I think that this is a good insight.

    When the Japanese system works, it works well. But it doesn’t work well much of the time. The Japanese economy still hasn’t recovered from the crash of 1989 (the collapse of a real estate bubble that makes our own look insignificant). Many of the big, export-oriented firms do well, but if it weren’t for the Blu-Ray, even Sony would be in serious trouble now. When we compare Toyota to GM, we are comparing one of Japan’s best to one of America’s worst.

    What are parts of the Japanese system? In Japan, there are complex stock share cross-holding schemes, where companies all buy into each other. When it works, it promotes a long-term focus, rather than one on short term quarterly profits. When it doesn’t work, it results in a cluster-group of zombie corporations all trying to prop each other up (and tying up money in nonperforming loans) when the assets and the money could be much more efficiently used if the companies went bankrupt and had the useful parts bought out by profitable companies.

    Another part of the Japanese system is that the profit motive is not considered socially acceptable. There is less downside to this, because it leads to profits being re-invested in the company. But it can lead to immense amounts of money being spent on technological dead ends. Remember the ’80s, when high tech Japanese ceramics were going to be the wonder material of the future? Well, it turned out that the actual wonder material of the future was carbon fiber composites (for certain applications). Since Japanese shareholders almost never object to how companies spend their money, some have gone on Roger Smith style spending sprees, and others have acquired vast empires of operations totally unrelated to their core business. These almost never turn a profit, and serve largely as perk-getters for executives and as a place to park excess managers.

    Japanese executives are paid less because power and position rather than money determines social status in Japan (again, viz the social unacceptability of the profit motive). High-level executives and bureaucrats have power, and everyone else does not. This is why big Japanese companies, regardless of what they do, can always attract top talent for entry-level management, even if they paid less than they do. However, after they retire, these top executives and bureaucrats make oodles of money through lucrative “consultancies”.

    In return to treating their employees with politeness, if not always exactly with respect, Japanese employers demand a level of work and commitment that many of us would find abusive. The 12-hour workdays and staggering amount of unpaid overtime worked by the white-collar salaryman are famous, but conditions at second-tier companies like auto parts suppliers can be brutal. The Japanese birth rate has fallen off drastically because women realize that they can have a career or a family, but not both, or else they don’t want to be married to a husband whom they will see only for a few hours on Sunday. Japan is dying for Toyota’s sake.

    In return, Japanese consumers get many good products (most of which we also get), but at very high prices. The products are good because they have to be for the export market; at home, complex retailing laws protect each company’s market share from competition. I don’t know car prices in Japan, but there an audio CD goes for $30 and a DVD with 2 episodes of a TV series goes for $50. The high (and increasing) costs of car ownership have dried up demand–not only have sales slumped, the total number of vehicles on the road has also begun to decline. Cars are no longer the status symbol they used to be, and young people increasingly view car ownership as not worth the hassle.

    In America, we enjoy the best of both worlds. We lead the world in many sectors of the economy, and if we don’t like the Cobalt or the Caliber, we can buy a Fit or a Prius cheaper than almost any other place in the world, weak dollar or no. When the Japanese system works, it benefits Toyota and Honda–and America. But not the Japanese so much.

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    History tells the story. Any society, economy that becomes financial based and not manufator based fails and that is what has happened in the U.S. Financial based economies put the money in the hands of only a few people and it becomes about profit not growth.

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    I think you’ve got one of the clearest explanations on why Toyota works well, while the rest of Japan seems to falter as an economy.

    Some of the points in your comment leads me to think they adopted a model of manufacturing that works extremely well, while the way Japanese businesses are interrelated, combined with a cultural aversion to “rocking the boat” means they never focused on much else.

    A note about car ownership in Japan, I always thought the intensive and expensive inspection/registration process was specifically designed to create a disincentive to hold onto older autmobiles and increase turnover, resulting in dirt-cheap used cars in Japan costing next to nothing–making them ripe for exporting, either whole or in pieces.


    Nokia is Suomistä (“From Finland,” if I conjugated it right). In 2006, the company made more money than the state budget.

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