Gary Convis, 65, recently retired as chairman of Toyota Motor Manufacturing, Kentucky Inc., the first non-Japanese to lead a Toyota division. Convis began working in the auto industry after graduating from Michigan State University in 1964, when U.S. automakers overwhelmingly dominated the domestic market.
First, Convis worked at General Motors' Buick division and later at Ford Motor Co. In 1984, he was recruited to become general manager at New United Motor Manufacturing Inc., a new California-based joint venture of Toyota and GM. He joined Toyota's Kentucky operation in 2000.
In town recently to speak at the Maryland World Class Consortia, a group of 60 companies that helps businesses become more globally competitive, Convis talked to The Sun about the state of the U.S. auto industry and his experiences working for Japanese and American car companies.
Is there hope for American car companies?
Oh, absolutely. Absolutely. They've all improved in many, many aspects. They're well-managed, I think. [But] they may not regain the percentage of the market. I think they will become more profitable, and that will allow them to reinvest in both research and development as well as manufacturing technology. The end result, I think, will be very successful. I certainly hope so. I think its healthy to have competition and a variety of excellent companies working toward satisfying the customers.
What is the difference between American and Japanese car companies?
First of all, I need to punctuate that I believe in the last 20 years there are a lot of changes that have been made by car companies. And that all of them have come a long way in technology and design improvements. But I do believe Toyota's impact has been very positive in this country and around the world because they build a tremendous, consistently high-quality vehicle. And that competitive environment we're in forces everybody to invest and design and create competitive vehicles along with Toyota.
Back in the '80s, the major differences would be the involvement of the workers. The way that Toyota has developed a production system really instills built-in quality at the station. They provide opportunities to very easily stop the line if there is a problem. This is one of the fundamental principals called Jidoka -- which means built-in quality. That's compared to the Big Three, where the line usually never stops. The assembly line in NUMM was set up with pull cords right along the line.
If you were at GM, what would you tell it to do now?
To GM's credit, they're part of the joint venture, and they've studied Toyota very thoroughly. And they have some very smart people and some good leaders. And they've made significant progress toward the Toyota manufacturing methodology. So I would tell them to stay committed to what they have learned. And I think the key point is customer first. You know the customer is king. So build cars that customers want.
And then train your people thoroughly and continuously. And try to develop their capability more and more. Because in the end, it's the people that take care of the equipment. It's the people that build the cars, put them together, do the design work.
Also, I believe there is an amazing statistic that Toyota spends about $1 million per hour on research and development. ... So, they very deeply invest money to provide the type of technology that will be successful in the next century.
You think back to almost 15 years ago when they were developing the hybrid, there was no need for the hybrid. Gas was less than a dollar and people weren't thinking about CO2 emissions and global warming. But Toyota was thinking about that kind of thing 15, 18 years ago. So I think another important aspect of a successful company is to try to be forward-thinking.
What impact do you think health and retirement costs have on GM?
The health costs for existing employees is very similar between all car companies in this country. The retirement obligation obviously is much bigger for the Big Three because of the length of time they've been making vehicles in this country.
Those employees are older now, and [the companies are] now getting their health care costs. And it's very challenging because [the companies] have to make enough profit to pay those obligations. Therefore, the amount of cash they have to reinvest and focus on research and development may not be as much.
How large a role do you think an image plays in car sales? How can U.S. carmakers improve theirs?
You only get one chance with each car you build. If you make a great car, consumers will tell two friends that they really liked the car. If you make a bad car, they'll tell 20 of them. So, honestly, you have to make very good cars every day and one after the other so that the gradual perception becomes reality. So that's a real challenge. You can't afford to make many mistakes.
If you do, you have to take care of the customers. You have to try to help them so they don't have a big hassle getting it fixed. And you have to respect the fact that they put their hard-earned money and trust in your car. And if something [bad] has happened, take care of them, apologize for it, learn from it and prevent it from happening again.
Repeat customers are very important. If they have a great experience, they're probably going to go back to your dealer or company and buy another one. And if they don't, they're going to shop around.
What do you think will be the next generation of hybrid cars?
I think the plug-in hybrid is going to become a reality. It's more of an electric car than the current hybrid. It's kind of like an electric car in the town and more of a gas car outside the town as you drive on higher-speed highways. Many of us, maybe not every day but most days, drive 30 miles to work and 30 miles home, or less. Electric plug-in hybrids are wonderful for that. So they can recharge their batteries and operate without using gas most of the time during the day.
Now the thing we have to try to address is how do you generate electricity because we can't just use another form of fossil fuel. We need to try to develop more renewable energy sources. So, hydro-power steam from geothermal heat, the use of nuclear power, wind power in certain areas of the country.
And this country has been very late in realizing and educating the public, in my opinion, on the safety and excellent properties of nuclear power. The rest of the world is building nuclear power plants safely and operating them safely in many countries. And we need to begin that path stronger than we are. We truly need to get off dependence on fossil fuel and foreign oil as much as we are.
What do you drive?
Ahh. I drive an RX 400h Hybrid. It's very smooth. The transition between electric power and the gasoline engine is almost seamless.