Ford has a better idea ... in Brazil
I was a bit perturbed after reading an article by Neal Boortz that highlighted the Ford Motor Company's glitzy new manufacturing plant. Not because it is state-of-the-art and efficient. Not because it allows Ford to manufacture five different types of vehicles in one location. Oh, no.
I'm angry because they built the plant in Brazil.
Technology coupled with re-invention
The forward-looking Brazilian facility allows suppliers to be integrated into the assembly line process. This means that the suppliers making automobile component parts such as seats, gauges, etc. have assembly lines right inside the Ford factory. No more waiting for parts to ship, no more shipping costs, no more production delays.
This sort of functionality loosely falls under a concept known as Total Quality Management. TQM was first introduced to the Japanese after World War II by an American manufacturing genius known as W. Edwards Deming.
So Ford's Brazilian idea is nothing new (after they were taught how, Japanese auto makers employed it -- and now falsely take credit for it), and in fact was originally implemented by Henry Ford himself. In a process that became known as Inclusive Production, the company shipped in iron ore on Ford-owned ore carriers, then made the steel, body, engine, and drive train components all in the same complex of Ford-owned plants.
But you will never see anything so innovative in Detroit again. Ever.
Why Brazil? Why not Detroit?
I think you already know, but just in case ... Unions.
Certainly, Brazil has powerful unions and business taxation, just as they employ protective tariffs (making it a shrewd move to build your product in Brazil). But Brazil also has low-wage workers, a government that offers tax incentives, and union bosses who are smart enough to keep most of their grubby little fingers out of the American pie.
Not here. Not in America. The same United Autoworkers' Union (UAW) that is bankrupting our Big Three auto makers through exorbitant salaries, medical benefits and outrageous retirement packages is opposed to this type of innovative manufacturing. They are opposed to innovation that would actually help their employer because they stand the risk of losing jobs. If they lose jobs, they lose power.
And if unions lose power, they lose the only remaining reason for their existence.
Let them go bankrupt and restructure
Add to union greed the fact that the state of Michigan has failed to learn, after all these many years, that if you overtax your businesses, they will go elsewhere or go bankrupt. The crumbling cities of Flint, Dearborn, and Detroit are stark testimonials to the reality that they have also flunked this particular course in Business 101.
Our auto manufacturers are a great example -- perhaps the best example -- of businesses slowly being choked to death by union extortion. Back in the early 1900s and the days of worker exploitation, the UAW served its members and community honorably.
But just as worker exploitation in manufacturing is dead, so too is manufacturing innovation -- because today it will be "unionized" into an unworkable, unprofitable sham.
This is why we should not bail out our auto manufacturers. Let them go through the bankruptcy process and restructure -- that's why we have bankruptcy laws, to allow companies to restructure in a leaner, more competitive fashion.
I mean, we all want thriving, competitive American businesses ... don't we?