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If you ever get to be around with someone who works at a car insurance company, ask them about failure rates for cars… japanese cars (and Toyota notably) are am

If you ever get to be around with someone who works at a car insurance company, ask them about failure rates for cars… japanese cars (and Toyota notably) are among the lowest (that is, they are among the most reliable cars in the world by far). I still wonder how they can manage to build affordable, reliable cars that last for years, while many expensive car makers have absurdly high failure rates.

wpietri 14y ago
One of the interesting reasons comes back to accounting. Toyota's approach focuses on value from the customer perspective. So all defects are seen as waste, and are targeted for elimination. The MBA approach just looks at P&L. Which is why they concealed the Pinto's tendency to explode; it was cheaper to pay the lawsuits than to fix people's tanks. Nevermind that many more people would die without the recall; that wasn't relevant to increasing shareholder value. Another good example comes at the beginning of Bob Lutz's "Car Guys vs Bean Counters". Lutz, a car lover and an automotive exec for decades, once fixed a problem with transmission manufacturing. The problem was causing a lot of people's cars to die right after the warranty expired. He got yelled at because it blew a hole in their revenue projections; they were looking forward to a lot of highly profitable transmission repairs. Toyota can make those reliable cars because they see every worker not just as a meat robot, but as a brain that should be engaged in eliminating waste. MBA thinking looks at slow order periods as a time to cut labor costs. Toyota, cognizant of how much they have invested in their workers, looks it as a time for training, plant improvement, and other value-creating activities.