Great article on Subaru in BusinessWeek called “Subaru Sells Out: Will a Fast-Growing Carmaker Decide to Stay Small?” It is interesting (and even a bit humorous) to read the business press and the auto industry try to wrap their heads around the matter of capacity.
You can’t understand anything about Subaru without first understanding that they are the best manufacturer in the auto industry, hands down, and their plant in Indiana is most likely the best manufacturing operation by just about any measure in the United States. There's a reason why Toyota owns a stake in Subaru and has outsourced some of its Camry production to the Indiana plant.
I had a couple of requests from some Twitter followers to comment on a recent article in Industry Week written by the folks at the Alliance for American Manufacturing titled “Are Democrats Really Giving Up on Manufacturing?” OK … here goes … a couple of quick observations …
First, outfits like the Alliance for American Manufacturing serve a good and necessary purpose. They pound on the government over taxes, regulations, trade agreements – all of the things short sighted politicians, people wholly ignorant of economics and of manufacturing’s critical role, and those with narrow, radical agendas pile on to make manufacturing success even harder than it should be. As valid as their points are though, I am generally inclined to downplay their issues because far too many poor manufacturing managers use them as a crutch. Rather than step up to the tough changes management needs to make, they blame all of their failings on government policies and regulations.
I was in Portugal last week for the Business Process Management Conference and took the opportunity to visit Rome while I was on the Continent, something I have long wanted to do and now wish I had done much sooner. Looking up in the Sistine Chapel or standing in front of the Pieta in St. Peter’s Basilica is nothing short of awe inspiring.
I read an article in the Wall Street Journal the other day that really struck home the point that, whether a company is likely to become lean or not really boils down to a very fundamental question:
Do you think people are inherently lazy, looking to get as much money as they can while doing the least work possible, and that they basically can’t be trusted?
Do you think people are inherently good, want to work hard in order to accomplish something worthwhile and take pride in themselves and their work?
A lot of people might read the latest from Jack Welch and conclude that he is starting to get it; that he is starting to understand that success is about culture and people. They might think that the old Jack – the one that pitted managers against each other like so many gladiators; ‘Neutron Jack’ who slew all the people but left that factories standing; 70-70-70 Jack who wanted the work GE people did not only out of the company but out of the country to where people would work for next to nothing – is gone and a new kinder gentler Jack has emerged.
The German Mittelstand is fairly well known (although greatly under-appreciated in North America). Even less appreciated is the North American Mittelstand. For those unfamiliar with the term, the Mittelstand – technically German for something like ‘middle class’ or middle estate’ – it refers to the “3.7 million small and medium-sized companies driving Europe’s biggest economy”.
These are the privately owned manufacturing companies that enable Germany to punch well above their demographic weight – the 16th biggest country by population and fifth biggest economy – the third biggest manufacturer after the United States and China. For all practical purposes the Mittelstand carries German and Germany carries Europe – or at least the EU.
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