Evolving Excellence

So You Want to Buy an American Car?

By Kevin Meyer

Thanks to Pete over at Shmula for shooting me this tidbit.  If you take a look at all cars sold in the U.S. and ranked them by domestic content... parts and final assembly, you might be surprised.

1. Toyota Camry
2. Ford F150
3. Chevrolet Malibu
4. Honda Odyssey
5. Chevrolet Silverado
6. Toyota Siena
7. Toyota Tundra
8. GMC Sierra 1500
9. Ford Taurus
10. Toyota Venza

So you want to buy American and support American jobs, communities, and tax base... what will you buy to have the largest impact?

A Check on My Undesired Investment

By Kevin Meyer

A few months ago I, along with about 200 million others, was forced to invest in a failed company.  Some people still think that failure cannot be allowed even if deserved.  Probably the same people that believe team sports in school create dysfunction and grades and other performance measures are inappropriate and demeaning.  Sorry, time to enter the real world.

If you're naive enough to think you can get something for nothing on a new mortgage, you should fail.  If you're dumb enough to invest in those mortgages without realizing there's no underlying value, you should fail.  If you're ingenious enough, in a mad scientist kind of way, to fashion complex financial instruments out of those packages of worthless mortgages, you should fail.  If you keep producing cars that no one wants, ignoring improvement methods right in front of your noses, and paying people several times the prevailing rate, you should fail.

So out of morbid curiosity, I wonder how my investment is doing.

Two of the biggest car makers in America, Ford Motor Co. and Toyota Motor Co., called a bottom to the long decline in U.S. auto sales. 

Yes, Ford and Toyota reported improved sales last month.  Unfortunately my president... err financial advisor... didn't invest in those companies.  He invested my money in GM.  What happened at GM?  The sales decline accelerated last month.  Great...

Fortunately I decided to hedge my forced investment, and put some equivalent funds in Ford.  How's that investment doing?  Check out the chart on the right.

Not too shabby.  My hedge probably worked and I'm about even.  I wish the other 200 million taxpayers were so lucky. 

But I'm very concerned.  Ford has to compete against a "company" not constrained by real-world economics.  They are backed by an entity that can simply print more money (as long as the Chinese continue to buy the supporting debt...) and change industry policy and regulation as necessary to guarantee an outcome... whether in the public interest or not.

Will Ford be able to pull it off?  I have my hopes, and I'll continue to support them with my capital and perhaps even a purchase. 

 

Saturn, Penske, and 5S

Over the last couple days word has leaked out that the Penske auto group will be purchasing the Saturn brand from GM.  Saturn was originally supposed to be GM's answer to the Japanese automakers, but executive egos, antiquated union work rules, and eventually the perception of Saturn as the bastard stepchild of GM (a bad thing?) ended that brief flirtation with excellence.  I've always thought there was still some hope for Saturn, especially if they became independent.

Penske might just be the ticket.  The company is primarily a dealer network and probably intends to outsource production activities for the various brands it sells, but they have a fundamental philosophy that could drive excellence into internal and external operations and relationships.  I know from personal experience.

I've purchased my last three vehicles, Japanese and German brands, from two different Penske-owned dealers.  The entire sales cycle is focused around delivering value to the customer, from marketing to the actual sale to service.  No high pressure tactics, salespeople that truly know the brands and really try to learn how you define value, to exceptional service.

That last aspect, service and maintenance, is almost stunning, at least relative to other dealers.  I've had my vehicles serviced at both dealers and have briefly visited three others, and they are identical in process, layout, and methods.  Most impressive are the service bays themselves.

7am, noon, or 5pm... I challenge you to find a Penske service are where you couldn't literally eat off the floor.  Three weeks ago when I briefly stopped in with a question, I saw a near panic when a tiny spot of oil was found on a large service floor with over ten cars up on jacks.  I swear some form of root cause analysis was also performed based on the group of service techs trying to figure out where that tiny spot came from.  Tools, shadowboards, standardized layouts, scrubbed, straightened, and sorted... a Penske service bay is an example of rather extreme 5S.

Obviously many of the methods were derived from Penske's racing roots where extreme efficiency is critical.  And obviously 5S alone doesn't create excellence.  But my experience and knowledge of the Penske organization gives me hope that they could save the Saturn brand and turn it into what was originally envisioned.

Stay tuned... Penske's disruption of the traditional manufacturer/dealer model, coupled with a core excellence that could influence suppliers and competitors... could radically remake the automotive game.

Taking the "Gen" out of "Genchi Genbutsu"

Well, GM is in the news again, this time for refusing to cancel its program that gives a company car and company-paid gas for about 8,000 white-collar employees. It's almost too easy to work myself into a righteous wrath over a perk that costs the company $12 million a year, at a time when GM has already received $13 billion from taxpayers and is looking for $16 billion more. But in the grand economic scheme of things these days, it's pretty much a rounding error.

GM claims that the perk, which is formally called the "Product Evaluation Program," is an important tool to improve vehicle quality, because employees can immediately report problems. But Walter McManus, a former GM economist during most of the 1990s, questioned the program's value:

I'm not aware — when I was in market research or in product planning — of anyone at GM ever using the information for any sort of analysis or any product development decisions. No one that I knew took it seriously.

Okay, so we've got some waste here: a program that certainly costs money to administer but doesn't do a damn thing to benefit customers. But to me, the real problem with this program is the way it isolates GM executives from the reality faced by its customers. The principle of genchi genbutsu ("actual place, actual thing," where "gen" means "actual") is designed to ensure that workers (and especially) managers get out their bubbles and see the reality of a situation. Yuji Yokoya, the Toyota chief engineer for the 2004 Sienna minivan is legendary for driving 53,000 miles around North America while developing the minivan, all in an effort to experience the reality of the US market.

You'd think that it would be easy -- even unavoidable -- for GM execs to experience the "actual thing" faced by their customers. All they need to do is simply drive their cars -- you know, to the store, to work, back home -- just like their customers. But leave it to GM to keep their execs in the bubble. What's the long term effect of these twice-yearly free cars twice and free gas? After all, if you're getting it for free, can you really understand what it's like for a consumer to own an SUV that gets 9 mpg when gas costs $4 a gallon?

GM insists its employees appreciate the impact of high fuel prices, but one current GM staffer interviewed for this story said the perk does blind some people. He recalled that when gas spiked last summer, a colleague complained. It wasn't because of the cost. It was because he had to swipe his credit card twice to fill up the tank of his big SUV.

Somehow, I don't think that the inability of gas pumps to register over $100, and the extra effort of the double swipe was the biggest problem facing consumers last year. When you're getting the car and the gas for free, you're not really experiencing the "actual" anything.

So, given the cost and questionably utility of this program why not end it?

GM has talked about ending the program, but a spokesman said employees have built their lives around it. It allows many to live far from their offices and commute at little expense. The spokesman said killing the program now would be "extremely" disruptive.

Ah, now I understand: 8,000 execs who are high enough up the corporate food chain to warrant (and I intentionally don't use the word "merit") free cars and gas can't afford to drive to work? Do they really make so little money that they can't afford to pay for the commute out of their own pockets? Did they really "build their lives" and choose where to live based on the assumption that they'd have free cars and gas in perpetuity? Are they really that asinine? If so, that explains an awful lot about how they can so seriously, and so regularly, misunderstand the customer.

Leave it to GM to take the "gen" out of genchi genbutsu.

Back to Basics at Toyota

The first statement in yesterday's Wall Street Journal article summarized it well:

Toyota Motor Corp.'s incoming president, Akio Toyoda, has a sobering message for the giant company founded by his grandfather: It has gotten too fancy for its own good.

That's often a death nell for most companies.  Bloated bureaucracies, inefficient execution, convoluted decision-making, wasteful resource transfer... wait... that's starting to sound like the government.  The difference with Toyota is they are recognizing they have a problem, and they're taking action.  Action that doesn't require additional spending, raising taxes... or raising prices in their case.

Akio Toyoda is going back to the basics, and he started by going back to a basic concept that should be practiced on an ongoing basis in any organization: going to the gemba.

Akio Toyoda has long preached a traditional Toyota practice called genchi genbutsu, a leadership maxim that boils down to get out of your office and visit the source of the problem.  For the past year Mr. Toyoda has been practicing genchi genbutsu to quietly collect evidence that the company had strayed, according to people familiar with the situation.

So what did he find?  Features that have questionable fundamental value for the customer for one.

For example, the new Prius, launching this year, has an option for a solar-powered ventilation systm designed to keep the interior cool when parked.  Gizmos like these helped lift the car's retail price to an estimated $28,000.

And even the vaunted manufacturing operations had projects of debatable value.

Then there's the shabu shabu paint system.  To replace the traditional system of slowly dragging a car through a 115-foot-long bath of anticorrosion undercoating, Toyota engineers came up with a new process in which a part gets picked up by a robot arm, then swished around in a pool of paint, cutting the length of the line.

However, the new system costs roughly four times as much to set up as the traditional process, while producing what Mr. Toyota felt were minimal improvements in the quality of the paint job and its efficiency.

Perhaps most importantly is the pricing model, where Toyota taught us to price based on value, which is set by the customer and market and not the manufacturer.

Toyota executives reasoned American consumers would be willing to pay a premium for a Toyota - a change from a long-held strategy of pricing cars at a value.  Two years ago, Toyota started raising prices on an array of models including the redesigned Corolla, launched in early 2008.

When Mr. Toyoda got wind of the slow Corolla sales, he flew to the U.S. to meet with dealers and investigate for himself.

Once again, genchi genbutsu.  It now appears the pricing strategy will go back to one based on value.  Compare that to the pricing strategies of GM, Ford, and Chrysler, where the price is based on a mark-up, then discounted, then discounted further because the vehicles aren't moving fast enough.  What is the true value of that vehicle? 

But the key points are to recognize a problem, visit the source of the problem to see for yourself, and then fix it.  Not ask for a handout or bailout or "investment" by the taxpayer that simply prolongs the problem.  That doesn't create long-term competitive ability.

"We are not gods, we are not infallible," says Shoichiro Toyoda.

Toyota, already a company that can outcompete most others, is recognizing a problem and rapidly changing course to further improve.  Are you? 

Mr. Bloom to the Rescue?

Yesterday at 5pm GM and Chrysler submitted their turnaround plans required as a result of accepting a partial bailout (oh, sorry, "loans") from the government several weeks ago.

General Motors and Chrysler LLC said Tuesday they could need an additional $21.6 billion in federal loans between them because of worsening demand for their cars and trucks.

The two firms, in documents submitted to the Treasury Department, also detailed plans to cut 50,000 jobs worldwide by the end of the year. GM said it plans to close five more plants in the next few years and confirmed it will drop some of its weaker brands.

A newly-appointed auto panel will review both plans and determine by March 31 if GM and Chrysler can be viable in the long run. Specifically, the Treasury Department is looking for details about the progress of negotiations with creditors and the UAW.

White House spokesman Robert Gibbs issued a statement late Tuesday saying that the panel would be reviewing the plans and that "We appreciate the effort that these companies and their stakeholders have made."

Egads.  And dream on if you think that's really all it will take.  Evan Newmark has another option, one we've occasionally promoted ourselves.

The great Detroit bailout debate is here again. And now you have a chance to do the right thing. Forget about throwing billions more of taxpayer money at Motown. It’s time for you to destroy Detroit, so that the rest of America can live.  Mr. President, it’s time for the bankruptcy of GM and Chrysler.

Now that may seem harsh. But you really have no choice. Look around you. Everybody in America has his hand out — California and the movie industry, New York and Wall Street, homebuilders and the millions of mortgage deadbeats.

You need to send a message to all America — and fast. No more Mr. Nice Guy and no more money. Reinventing America doesn’t mean bailing everyone out. It means stopping those things that just don’t work anymore. And Detroit makes a great showpiece.

Harsh?  Perhaps.  And it will be expensive.  But not as expensive as ongoing and increasing subsidies.  However there's another player now in the picture, a guy by the name of Ron Bloom.

President Barack Obama's administration appeared to be turning up the pressure on GM and Chrysler to carry out tough restructuring measures, possibly through the use of the bankruptcy court.  The administration stepped back over the weekend from naming a "car czar," as it had planned, to oversee the restructuring. But according to people familiar with the task force, it named former Lazard Freres & Co. investment banker Ron Bloom a key adviser.

Mr. Bloom is no ordinary investment banker.

Mr. Bloom, who made a name advising U.S. steelworkers to accept major concessions in several bankruptcy cases, is expected to take the task force's lead role, a senior U.S. Treasury official says.

People who know Mr. Bloom expect him to be tough on the auto makers, the United Auto Workers and other parties involved in their restructuring. "The management of the Big Three are probably not going to like what Ron Bloom has to say; the UAW is not going to like what Ron Bloom has to say; and certainly the stockholders and creditors will not like what he has to say," said Michael Psaros.

That's not all.

Mr. Bloom, a Harvard Business School graduate who spent 10 years at investment banks before joining a team advising the steelworkers union, is seen as one of the chief architects of a consolidation of the steel industry that has involved about 35 bankruptcies over several decades. He's known as a blunt communicator.

In a 2006 speech at a corporate turnaround conference in Scottsdale, Ariz., he described his approach to restructuring as "dentist-chair bargaining," in which the patient "grabs the dentist by the b -- and says, 'Now let's not hurt each other.'"

Under Mr. Bloom's guidance, the United Steelworkers gave up pay, job security and benefits in a bid to help the industry recover. In some cases, thousands of steelworker jobs were lost when union leadership agreed to large-scale reductions in restructured companies.

So what is he likely to do?  Here's a hint:

Such solutions could also come into play at the automakers. Wilbur Ross, a billionaire investor who worked closely with Mr. Bloom in restructuring the steel industry, credits him with being tough on companies without being destructive. He "probably saved the jobs of 100,000 steelworkers," Mr. Ross said, while also saying Mr. Bloom "negotiated a totally different contract that simplified work rules" and other union provisions.

Exactly.  We talked about the arcane and costly work rules in a post several weeks ago.

And with the undemocratic absurdity of "card check" legislation eliminating the secret ballot, that is bound to get worse.  The big impact of unions is not pay, it's work rules.  Rules that favor seniority over real experience and knowledge, and rules that often overwhelm common sense.  These nonsensical rules are what kill productivity and create inefficiency, making the Detroit 3 uncompetitive.  Implementing real lean manufacturing in an environment with strict and narrow functional boundaries is basically a non-starter.

To put it bluntly, the UAW takes the hard earned money of the best workers and spends it defending the very worst workers while tying up the industry with thousands of pages of work rules that make it impossible to be competitive.

More money is not going to solve the problems in Detroit, only prolong the pain to those companies and especially the taxpayers.  And those auto companies simply cannot change while hamstrung by ridiculous work rules.

It's time for much more fundamental change.  A managed bankruptcy, albeit painful, may be the only way.

It's Work Rules, Not Pay

There are a lot of people complaining about the supposed differences between the hourly pay of union auto workers with the Detroit 3 and the non-union auto workers at Japanese car factories in the South.  It's tough to get an apples-to-apples comparison due to differences in pensions and such.  And in any case the hourly labor content of a Detroit 3 car is wildly distorted by the silliness of ridiculous "jobs bank" costs... where idled workers are basically paid to stay home and watch Oprah.

I'm not a big fan of unions, but at the same time I believe that unions generally arise as a result of poor management.  The problem is that it's difficult to go back even if and when management improves.  And with the undemocratic absurdity of "card check" legislation eliminating the secret ballot, that is bound to get worse.  The big impact of unions is not pay, it's work rules.  Rules that favor seniority over real experience and knowledge, and rules that often overwhelm common sense.  These nonsensical rules are what kill productivity and create inefficiency, making the Detroit 3 uncompetitive.  Implementing real lean manufacturing in an environment with strict and narrow functional boundaries is basically a non-starter.

Lori Roman over at Regular Folks used to supervise a bunch of UAW workers and tells some great stories of the nonsense of work rules.  But she doesn't just pound on the UAW... she also takes management to task for their lack of backbone to stand up to idiocy when it happens. 

To put it bluntly, the UAW takes the hard earned money of the best workers and spends it defending the very worst workers while tying up the industry with thousands of pages of work rules that make it impossible to be competitive. And the spineless management often makes short sighted decisions to satisfy the union and maximize immediate benefits over long term sustainability.

I've worked in both Teamsters and IEW factories so her accounts don't surprise me, but perhaps they still should.  A couple samples:

I had an employee who punched in his time card and then disappeared. The rules were such that I had to spend hours documenting that this man was not in his three foot by three foot work area. I needed witnesses, timed reports, calls over the intercom and a plant wide search all documented in detail. After this absurdity I decided to go my own route; I called the corner bar and paged him and he came to the phone. I gave him a 30 day unpaid disciplinary lay off because he was a “repeat offender”. When he returned he thanked me for the PAID vacation. I scoffed, until he explained: (1) He had tried to get the lay off because it was fishing season; (2) The UAW negotiated with GM Labor Relations Department to give him the time WITH PAY.

One afternoon I was helping oversee the plant while upper management was off site. The workers brought an RV into the loading yard with a female “entertainer” who danced for them and then “entertained” them in the RV. With no other management around, I went to Labor Relations for assistance. As a twenty five year old woman, I was not about to try to break up a crowd of fifty rowdy men. The Labor Relations Rep pulled out the work rules and asked me which of the rules the men were breaking. I read through the rules and none applied directly of course. Who wrote work rules to cover prostitutes at lunch? The only “legal” cause I had was an unauthorized vehicle and person and that blame did not fall on the union workers who were being “entertained” but on the security guards at the gate. Not one person suffered any consequence.

And we want more of that via Card Check?  Do they deserve a bailout?  And can they really reform those practices in three months?

Focusing on the Small, Forgetting the Big

The Detroit Three car companies, and all companies for that matter, are taking sometimes draconian steps to cut costs.  Some examples:

Over the past several weeks, engineers and technicians working at General Motors Corp.'s sprawling proving grounds west of Detroit started noticing a curiosity: an increasing number of wall clocks had the wrong time, or stopped working altogether.

The reason: As part of a drive to cut $15 billion in costs, GM is no longer keeping the 562 clocks in working order, which will eliminate the expense of replacing and disposing of the clock's batteries and the cost of resetting them twice a year for daylight-saving time.

Ok, it sounds like a rather incidental cost.  But is it the right focus?  Instead of leaving 562 clocks hanging on the walls eventually showing 562 different times, how about seeing which ones are really necessary and removing the ones that aren't.  If a clock is really necessary, then allowing its timekeeping to lapse probably creates more waste than the savings generated by not servicing all the other clocks.  How much time is now wasted when people show up to meetings late?

It's not the only new measure GM is taking to save every last nickel. In its Renaissance Center headquarters, employees working late have to climb stairs when navigating its labyrinth of lower floors -- the company now stops the escalators at 7 p.m. In designated cleanup areas of certain offices, the company has changed the type of wipe-up towels it buys. In a memo to employees, a staffer explained this will lower GM's "cost per wipe."

I'm not going to get into a "cost per wipe" discussion.  Let's try some more.

Earlier this month, Ford said it will cut its North American salaried work force by approximately 10%, and is trimming its capital spending, manufacturing, information-technology and advertising costs. GM and Chrysler have both halted or slowed work on new vehicles to cut development expenditures. Neither company held news conferences at the Los Angeles Auto Show last week, a standard function at such shows.

Perhaps some good savings, but again, are they the right focus?  Whacking 10% of your knowledge and training investment?  Reducing the ability to be competitive when you come out the other end of the tunnel?  Basically ensuring you'll always have vehicles that lag behind competitor technology?

Next year, GM isn't giving out its "Mark of Excellence" awards to its top-selling dealers.

That's a good savings.  We've often discussed the waste of awards, and this is a good example.  Plus, is receiving a "mark of excellence" from a company like GM really something you want?

At GM's metal-fabricating plant in Grand Blanc, Mich., Steve Bean, a union committeeman, said he recently had to tell workers they would have to wait until at least next year to get $270 stipends they were promised in order to buy T-shirts, hats or coats emblazoned with their union local.

Another good one.  $270 for logo gear?  Per employee?  That's nuts.  Instead they should charter a flight to American Apparel in LA, give them a tour, and give them a few minutes to shop at the AA company store.  They might learn something about how to manufacture efficiently from this growing underwear and t-shirt company.

Voice mail at most of the company's plants has been eliminated, a move that GM spokesman Tony Sapienza said saved something like "a million" dollars. Now, the only way to get union representatives or officers on the phone is to catch them at their desk or station. Recordings that used to say, "please leave a message," now say "please call back." "It's all good business practices, but now it's extreme business practices to the point where we're not wasting anything," Mr. Sapienza said. "We're cutting to the bare minimum."

So now it will take longer to get questions answered, to find solutions to problems, and to resolve issues.  Instead of a quick phone call you'll have to go wandering around a million square foot factory.  Yep... there's some savings...

At the proving grounds in Milford, Mich., where the clocks are now frozen in time, GM has switched to regular Ticonderoga No. 2 pencils instead of the more expensive mechanical pencils that used to be freely available in storage closets, known in GM-speak as "pull stations."

I'll give them that one as well, although I'm betting that the "pull station" is the closest GM has ever come to a "pull system."

A focus on savings, even tiny savings, is great.  Everyone should always be on the lookout for waste.  But superficial savings can sometimes create deeper waste.  And how about taking a few steps back and looking for the real big wastes... such as building cars that no one wants just to keep factories humming...

Perhaps they can use some of those bailout billions to get their clocks back on time... while still manufacturing the same old way.

Should Ford Learn From... Ford?

Believe it or not, South America has long been a test bed for new auto production ideas.

Many automakers use South America to try out new manufacturing ideas. Volkswagen AG has suppliers in some of its factories, and General Motors Corp. has a supplier park surrounding its plant in Gravataí, Brazil. But analysts say no automaker has gone as far as Ford.

"South America is kind of the global sandbox for a lot of automakers to try out new methods," said Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide. "Ford was able to think out of the box, and it's paying off for them."

Yes, Ford.  The Camaçari facility in Bahia, Brazil is a remarkable plant from a variety of perspectives, although there is one glaring problem that I'll discuss later.

This state-of-the-art manufacturing complex in the northeastern Brazilian state of Bahia is not only the centerpiece of Ford's Brazilian turnaround plan, it is also one of the most advanced automobile plants in the world. It is more automated than many of Ford's U.S. factories, and leaner and more flexible than any other Ford facility. It can produce five different vehicle platforms at the same time and on the same line.

Ford sources said it is the sort of plant the company wants in the United States, were it not for the United Auto Workers, which has historically opposed such extensive supplier integration on the factory floor.

I generally believe that unions are the result of pathetic management, but the inflexible work rules have created severe problems for the manufacturers.  This facility shows what can happen with a little flexibility.

At Camaçari, more than two dozen suppliers operate right inside the Ford complex, in many cases producing components alongside Ford's main production line. Having those supplier operations on-site allows Ford to take the concept of just-in-time manufacturing to a whole new level. Inventories are kept to a bare minimum, or dispensed with entirely. Components such as dashboard assemblies flow directly into the main Ford assembly line at the precise point and time they are needed.

Sounds pretty slick.  Let's learn more.

The system also helps with quality. If there is a problem with a part, it is a simple matter for Ford engineers to trace it to its source and work with the supplier to correct it.

"It's a simultaneous supply chain," said Edson Molina, logistics general manager for Ford South America. "When you have a problem, everybody works together to solve it."

Must take quite a bit of training investment.  Yep.

Most have no industrial experience when they hire on at Camaçari, so each worker receives about 900 hours of training. Much of that time is spent working on a scaled-down version of the real assembly line that was built just for that purpose.

Unlike many U.S. auto plants, where workers' responsibilities are strictly limited to specific job classifications, workers like Silva dos Santos are encouraged to learn as many different skills as possible.

There's a lot more meat in that article, but now let's switch gears to the troubling aspect.  You got a hint of it above, but take a look at this video tour of the facility, especially the section beginning about 30 seconds into it.  The photo on the right probably hints at my problem. I'll try to transcribe:

The Ford plant is more automated than any of Fords other plants.  There are more robots here than in most U.S. plants.

That concept is seen as a positive.  Is it? 

When I visited Toyota's Kyushu, Japan facility last month, as well as several other Japanese factories, robots and automation was seen as a negative.  In fact, they went out of their way to talk about how robots are only used in dangerous or physically difficult situations.  Why?  Because a fundamental reason why they have become so productive has to do with improvement ideas. 

People generate ideas, robots don't.  Over time the productivity improvement from new ideas easily overtakes the one-time improvement from automation.  This is why companies that realize there's value in the brain attached to the hands will succeed, while companies that think of the pair of hands as a cost will not. 

The Ford Camaçari facility is very efficient and competitive now.  Will it be in ten years?

Newt on the Toyota Production System

A hat tip to Jim Huntzinger for letting several of us know about this interview of Newt Gingrich on Fox's Hannity & Colmes.  We mentioned Newt before, and in this interview he takes the Detroit 3 to task, specifically mentioning the power of the Toyota Production System.  Here's a partial transcript, with this section happening about 3:30 into the video.

Well a lot of ways in the auto industry is a tragic situation.  Remember that when we say the auto industry there are an awful lot of factories in America today that are not General Motors, Ford or Chrysler that are doing pretty well.  Whether it's Honda, Toyota, Mercedes, BMW, Hyundai - it's amazing if you look at the factories that are doing fine. The fact is for the over the years though that the Michigan delegation, the Democrats with the Michigan delegation, has protected the United Auto Workers with really bad contracts. And the culture of the once Big Three, now Troubled Three, has been a culture which has refused to come to grips with reality. Refused to try to change and reshape itself. None of this is magic. We've known for twenty years that the Toyota Production System was a more powerful method of increasing productivity and solving problems. And yet the United Auto Workers refused to adopt that model. General Motors, Ford, and Chrysler went along with of this.

Want some more fun?  Here are over twenty cartoons on the auto bailout!