Larry Elder

My uncle Thurman worked at a Cleveland GM plant for 30 years before retiring. He operated machines that, from time to time, broke down. Mechanically skilled, though he lacked formal training, Thurman repaired cars in his garage after work and on weekends for friends, neighbors and referrals. But when his plant machine broke down, union rules required him to sit on his hands -- sometimes for hours -- while he waited for a young, often 20-something "tech" in a white shirt and tie to fix the machine. "Never," Uncle Thurman once told me, "did the kid ask me anything -- even though I could put together and take apart the machine in my sleep."

Chrysler, 30 years ago, teetered on the brink of bankruptcy. If it had been allowed to collapse, the remaining Big Two would likely have purchased much of Chrysler's plants and equipment and hired at least some of its workers. Instead, Congress provided financial aid to "rescue" the company. By not letting Chrysler fail, two major things occurred. First, a feeble company remained alive, only to limp from financial crisis to financial crisis for the next several decades. Second, it sent a message not only to Detroit but also to the rest of America: Expect a taxpayer bailout if the government deems a business "too big to fail."

Under pressure from American lawmakers, the Japanese built plants on American soil, where they used American workers to produce high-quality cars at a lower cost. If it wasn't clear and unmistakable before, it should have become clear and unmistakable then. Big Three, look into the mirror.

After World War II, manufacturers in Japan sought out the advice of W. Edwards Deming, an American quality-control expert. American businesses ignored Deming's theories on continual improvement, but Japanese companies lingered on his every word.

The Los Angeles Times named Deming one of the 50 people who most influenced business during the 20th century. "Scholars note that Japan was also receptive to Deming at a time when America was not," wrote the Times, "in part because Deming's ideas dovetailed with many of Japan's own traditions. Japan had long held hard work and quality craftsmanship as important virtues, and its technology even during the war surprised many Americans. Deming preached that companies must treat workers as associates, not hired hands, and he blamed management if workers were not motivated to work well." Today outstanding Japanese companies receive the Deming Application Prize for excellence in total quality management.

Back in Michigan in the '70s, I read article after article about how the Big Three should/could/would respond to the foreign invasion. But in practice, I saw excuses and pleas for protectionism.

"Why doesn't General Motors," I recall asking my roommate, "offer a boatload of money, steal Toyota's No. 2 executive and put him in charge?" My roommate laughed, "Because he doesn't speak English and wouldn't be able to understand the American market." I said, "And General Motors does?"

Today I know that my idea of stealing a Toyota exec was bad. GM should have picked up the phone, asked the government to buy a majority share in the company, handed the office keys to the President of the United States, and said, "Here. You run it."


Larry Elder

Larry Elder is a best-selling author and radio talk-show host. To find out more about Larry Elder, or become an "Elderado," visit www.LarryElder.com.