Like a champion marathon runner trying to put more distance between himself and his pursuers, Toyota is planning to streamline the way it makes cars and builds factories.
Woe to the competition. Toyota wants to cut $1,000 from the cost of each vehicle its produces, a figure not different from the goal Chrysler has set for itself in the US. But, the US automaker’s base cost is much higher.
The Japanese car maker’s paranoia iis well-founded. It lead in production efficiency to build a car, at 21.3 hours per vehicle, is not much greater than GM’s.
Toyota has had quality problems unlike any in year’s past. It recalled 2.38 million vehicles in 2005. The company is not used to that kind of defect problem.
While Toyota builds more efficient plants, plant that can build multiple brands off the same assembly line in record time, it can’t take its eye off of the quality ball.
Productivity will not matter if its global sales operations are marketing cars that are viewed as having the kinds of flaws that used to be found primarily in vehicles produced by Detroit.
Douglas A. McIntyre can be reached at email@example.com. He does not own securities in companies that he writes about.