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The fault lies within the system itself

The recall of fault-ridden products, which is spreading throughout industrial manufacturing, tells us much about the acute contradictions that permeate the global corporations within the capitalist drive to maximise profits.

Yesterday Nissan announced a recall of just over half a million vehicles, mostly in the US, because of problems with brake pedals and fuel gauges. Toyota leads the field with 8.5 million cars, trucks and sports utility vehicles recalled in the last few months. Toyota’s recalls are for faulty accelerator pedals, jamming floor mats, and braking problems. The pedals are supplied by CTS a US corporation.

General Motors has blamed the supplier JTEKT, a joint venture between Toyoda Machine Works and Koyo Seiko with five manufacturing plants in the US, for a faulty car part that led to the recall of 1.3m Chevrolet and Pontiac cars in North America. The fault in the cars’ power steering has been linked with 14 crashes. Last month Honda recalled 438,000 cars with faulty airbags.

The problem isn’t restricted to cars. On Monday, Sony told millions of PlayStation 3 users not to use their games consoles as it rushed to fix a bug. The warning appeared to be another blow to one of the biggest names in the electronics industry.

Last week Akio Toyoda, the Toyota chief executive whose family name appears on every one of the company’s products, appeared before the US House of Representatives Oversight Committee to explain and apologise. His simple explanation gets right to the heart of the problem. “I fear the pace at which we have grown may have been too quick,” he said.

Though it didn’t come out in the questioning, unpicking Toyoda’s simple statement gets us to the real cause of the crisis which has engulfed the interdependent worlds of finance and production. After World War II, US occupation forces introduced modern production control methods into Japan. These had been developed by the US War Department.

Toyota adopted these as the basis for its development of the “kaizen” philosophy of continuous improvement. Kaizen is a process that, when done correctly, humanises the workplace, eliminates overly hard work ("muri"), teaches people how to perform experiments on their work using scientific methods and how to learn to spot and eliminate waste in business processes.

And it worked. Over the decades, Toyota grew to lead the world in quality, building cars with a reputation for durability and reliability. Other companies followed Toyota in their competition over quality and price.

So what went wrong? Akio Toyoda’s simple statement encompasses the consequences of decades of the fierce competition for profit which obliged Toyota, like all corporations, to globalise, to export production volumes to cheaper labour regions to cut costs. At the same time, the company built highly-sophisticated vehicles dependent on ever more complex software and computer chips.

In the process it was obliged to outsource production of its components to companies over which it has little control, whilst all the time driving up productivity at a faster rate than its competitors. In the end, the complex, globalised supply chain was Toyota’s undoing and it engaged in a cover-up of mounting problems.

Toyota’s rush to expand simply added to a global saturation of the market, which is another inescapable feature of the capitalist system of production, one which is driving the present recession towards outright slump. Car sales are dropping off the cliff. In Europe they are expected to fall by 10-15% this year. GM is cutting European production by 20%. Europe has a production overcapacity of 6.5m vehicles.

The whole saga demonstrates beyond all argument that capitalism is simply not sustainable. Intense competition has meant the building of cars that are increasingly unsafe to drive, that add to carbon emissions and then lead to over-production with the consequent loss of jobs and pensions.

Gerry Gold
Economics editor
3 March 2010

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