A Congressman’s Blind Spot

I’m a little concerned about a recent statement by a congressman that seems to indicate a rather negative attitude toward Toyota.

            The comment appeared in an article on Bloomberg.com, which reported that Toyota may build as many as five North American assembly plants in the next 10 years.

            That’s impressive, though really not surprising. The article also did a nice job of providing perspective on what that means, by including plant figures of Toyota, Ford and GM.

            Five more plants would give Toyota 12 in North America, about the same number Ford will have after its current round of closings. GM will have 24 North American plants after it completes shutdowns planned through 2008. (That must still be too many; how can GM possibly need twice as many plants as either Toyota or Ford?)

            What concerns me was a quote in the article from Rep. John Dingell, a Michigan Democrat who is the new chairman of the House Energy and Commerce committee. He issued a statement last month saying Toyota has advantages over GM because of Japan’s state-run healthcare and pension systems. He also said Toyota benefits from a Japanese government that “manipulates the yen for strategic advantage.”

            Dingell may be right about the healthcare and pension systems, but that misses a couple of key points. First, GM has major costs in those areas because it agreed, in contracts going back many years, to pay them. Second, Toyota is not poised to surpass GM primarily because of healthcare and pension costs; it will do so because of a superior manufacturing strategy.

            Regarding the second point, I don’t know whether the Japanese government manipulates the yen. But even if it does, since most of the cars Toyota sells in the U.S. are built in the U.S., currency issues are largely irrelevant.

            As a Michigan congressman, Dingell undoubtedly wants to make statements that he believes will sound good to the Michigan automakers and their employees. And as far as I know, he’s not proposing any federal legislation to attack Toyota or bail out GM.

            However, this kind of negative attitude toward Toyota, which completely misses the truth behind its success, cannot be a good thing. I only hope Dingell and others who share his views are in the minority in Congress, so that nothing will come of that attitude.

            What do you think?