The Saturday Evening Post

LEARNING THE WRONG LESSON

DETROIT, 1979. U.S. auto companies were being threatened by foreign competition, and the Motor City became a symbol of American industrial decline. Chrysler would be subjected to its first (but not last) government bailout; the Ford Motor Company was about to lose $1 billion for that fiscal year, and at least as much again in 1980; and GM’s profits were expected to plunge by a breathtaking $2.5 billion. Meanwhile, Japanese automakers were gaining market share; Toyota would soon surpass GM as the world’s largest car company. (A similar scenario played out in other industries too, especially consumer electronics and the copier industry.)

Then, as now, the convenient scapegoat was the rank-and-file employees — in Detroit’s case, the unionized workers whose relatively high wages and ostensibly poor work ethic were initially blamed for the automakers’ problems. Only as Japanese wage rates reached parity with those in the United States and Japanese automakers began hiring American workers for their U.S. plants did some Detroit auto executives begin rethinking the narrative of blue-collar failure.

In 1980, an NBC documentary, , served as a wake-up call for American industry. The documentary introduced the methods of a little-known American quality expert by the name of W. Edwards Deming to an American audience. Deming had helped Japanese companies rebuild following World War

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