Why Japanese Carmakers Prospered in America

An old business saying is that: “Be careful what you incentivize. What you incentivize, you get more of.”

I have begun studying the importance of the Japanese concept of “jidoka”, which loosely translates into “automatic subject to the eye of man”, and was implemented at Toyota in the 1950s to grant any employee the authority to halt production if he spotted an issue that would diminish the quality of the cars.

Meanwhile, Alfred Sloan at General Motors was becoming the first executive at a Fortune 100 company to engage in planned obsolescence, or the deliberate shortening of the product’s lifecycle so that consumers will have to make repeat purchases more quickly (also, Sloan was one of the first participants in gimmicky political correctness, as he only used the term ‘dynamic obsolescence’. He is the reason car companies come out with a new model every year–he believed that if there was a new car available, even with a minor change, consumers would convince themselves that they needed it.

Although I have been, and continue to be, empathetic to the impulse that inspires Americans to call for the purchase of American cars with pithy slogans like “Buy American!”, I have never supported that policy initiative because superior businesses deserve to rise, whatever their origin.

Why wouldn’t you rather support the management team that is fine-tuning quality enhancements rather than fine-tuning a marketing strategy that is trying to give you less?

Also, from a moral standpoint, Toyota’s practice of “jidoka” supported human dignity. There was no job at Toyota that was too low to have the authority to stop operations if a quality concern arose. This fanatical dedication to quality carried forth an incredible show of trust in the worker that had no American counterpart. I could not begrudge Japanese automakers their success in the American markets because they deserved it.