1.12.2007

Lean Success Breeds Political Influence

One of the more unusual stories I’ve read about the automotive industry appeared this week in The New York Times. The article reported that Bob Lutz, vice chairman of General Motors, says GM has fallen behind Toyota when it comes to influence on Capitol Hill.


            “One of the sad things is, Toyota is so profitable and has plants in so many states that, frankly, they’ve got more congressmen and senators than General Motors does,” Lutz said.


            The article notes that, while both GM and Toyota spend millions on lobbying, GM spends more and has four times the number of registered lobbyists that Toyota does.


            And Lutz indicated that, at least for now, its lobbying efforts aren’t achieving much for GM.


            “It was, ‘Tough luck, guys. You made the deal with the unions decades ago, now live with your mistakes of the past,’” Lutz said, referring to a meeting the Detroit automakers had with President Bush in November. “There was zero sympathy.”


            I’m glad to hear it. Don’t get me wrong, I don’t enjoy seeing the U.S. companies in trouble. I’m originally from Detroit, and I’d love to see them succeeding.


            But their troubles don’t stem from government policies or unfair trade practices. They are the result of Toyota becoming a better competitor than GM through a lean strategy, eschewing the wasteful manufacturing practices that now have come home to roost in Detroit.


            Further, whatever increased respect Toyota is getting from Washington is not primarily the result of its lobbying efforts. It’s because Toyota has invested $18 billion in American factories in the last 20 years.


            David Cole, chairman of the Center for Automotive Research, is quoted in the story on this point. “When you’re talking about adding new plants,” he said, “you get significant clout, with the possibility that if I’m nice to you, you’ll give me a plant.”


            To Lutz’s credit, he also said that GM is now – finally – going to focus on profits more than market share, and will avoid using incentives to increase sales.


            “It’s got to be honestly acquired market share,” he said. “The only way to get market share is to get 25 percent of American citizens, day in, day out, going to General Motors dealerships and saying, ‘I want that car.’”


            The Times contacted Toyota for a response to the comments by Lutz. A spokeswoman, Martha Voss, said what you would expect her to say, but I’m sure she meant it.


            “We don’t really keep score (when it comes to political influence),” she said. “Our goal is to become No. 1 with the customer, not in Washington.”


 

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