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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: DRM who wrote (534)	9/2/1998 11:31:00 PM
From: porcupine --''''>	Respond to of 1722

Not sure you got my point on this one. In Europe there is parity for employer paid retirement costs. Every company has the same load rate. Not true in the states becaue of employer specific retirement plans. In the U.S. a company such as GM has a much higer cost to cover there older workforce than a new transplant. I see your point, and I agree. <<Barron's did a cover story on Toyota a while ago. Basically, it's a mess, productivity-wise.>> Toyota is the benchmark for productivity and cost. This is accepted generally in the industry (and by GM management). A good example is Nummi in California. Toyota did what GM couldn't ... Took an old GM (Van Nuys) outdated facility with old employees .... installed the "Toyota Manufacturing System" ... and voila one of the top three assembly plants in the U.S. is created in terms of productivity and quality. I amend my comment to read: "Basically, [Toyota]'s a mess, period". See Barron's cover story, "Fat and Unhappy", 12/27/97. I agree that Toyota has legendary labor productivity. (If I recall, the Van Nuys plant was liberated from the UAW under the Toyota regime -- but, admittedly, that still doesn't make GM's labor productivity any less problematic). It's Toyota's capital utilization that is underproductive. The WSJ reported 8/21/98, p. A11, that Toyota's credit rating has been lowered by Moody's from AAA to AA-1. Even more ominous, they confirm auto analyst Maryann Keller's view, which is: "For the past 25 years, we have seen the U.S. auto industry lose ground against Japan. Now we are about to see things go the other way. The Japanese don't yet know the game is over but, to make it simple, they have totally lost competitiveness at a time when Detroit has gotten much better." (see: Message 5108126 ) Consistent with this view, Moody's says that increasing consolidation by Western auto makers has "shifted the momentum" in their favor.