Overcomplicating Our Way to the Bottom

Tom Peters

The automated machine tools sector is not just another industry in which we are getting clobbered by the Japanese. It is the brawn and now the brain of the new manufacturing environment. The machine-tools industry determines the flexibility of production systems that are increasingly required to compete, as demand fragments in market after market. The development of our losing position in machine tools parallels our downfall in many other areas as well.

The August issue of High Technology magazine devotes a special section to “Japanwatch 86,” including a revealing article, “Designing for Flexibility,” about the nearly $6 billion Japanese machine-tool industry, which has achieved world leadership. Author Robert Haavind observes, “Sixty percent of machining in Japan is now done by small and medium-sized companies, and these shops favor more flexible machines suited to short [production] runs. … Japanese machine tool manufacturers have been content to leave the giant machining centers favored by … aerospace and automobile companies to U.S. and European competitors. … Instead, they have vigorously moved into global markets with small and midsized machines.” Haavind further notes that of the 30% of tools Japan exports, 80% go to “small and medium-sized shops” in the U.S.

We were the inventors of most forms of automation, including the now dominant, smaller and more flexible, numerically controlled machines. The instructive story of our loss has roots over 100 years old. The years beginning with World War II, though, are most illuminating.

The 1941–1945 years are mostly remembered as an era when our nation pulled together against a common enemy. However, World War II was marked at home by a record-shattering 14,471 labor strikes. General Electric’s infamous labor negotiator, Lemuel Boulware, was in tune with the times when he declared to GE management, after a bitter 1946 strike, “Something happened that must not happen again. Somewhere, somehow, the employees got the idea that they were in the driver’s seat. … This is the fantasy, gentlemen, that must be eradicated.”

GE became an early leader in automation devices, with an avowed goal of putting labor strife behind them by creating “machines without men.” The search for large-scale, integrated manufacturing automation systems was on.

The story is well documented in David Noble’s book, Forces of Production: A Social History of Automation. Noble describes our movement into automation as a continuation of the U.S. penchant for over-complexity, centralized mass-production and tools that admit less and less skill and input by labor.

GE, plus Ford, TRW and other managements found many allies—in particular, the military. The military’s roots in production technology leadership run deep. For instance, the Springfield Armory, under close guidance of the Army’s Ordnance Department in the 1840s, was the true role model for U.S. mass-production techniques. World War II was won by the airplane. The new Air Force (just split off from the Army) ran the project of injecting centralized automation into aerospace production. By 1971, Noble observes, “well over 90 percent of the roughly 5,000 [advanced automation] systems were in the aircraft and related firms.”

Cost saving was never the motive behind the military’s drive for automation. The bias of these systems toward complexity and central control was extreme. Performance of the massive systems was so problematic that Noble reports one Air Force analyst labeled them “a waste of money … [and] a monstrous technological boondoggle.”

The Air Force was in clear cahoots with another key element of the establishment, which also favored complexity for its own sake—the academic/scientific community, led by the Massachusetts Institute of Technology. Noble explains, “The technical community [had] a preference for formal, abstract approaches … an obsession with control … an enthusiasm for computers … a delight in remote control, an enchantment with the notion of machines without men … a fetish for novelty and complexity … coupled with an arrogant disdain for proven, yet simpler, methods.”

But there were, as Noble painstakingly points out, proven simpler approaches available. However, the simpler approaches involved substantial machinist input. That was anathema in the anti-labor environment of the time. And, of course, the simpler approaches flew in the face of inertia, bureaucracy and the untold millions spent by big contractors to support the complex systems and military procurement specifications that effectively blocked out simple systems. Producers of simpler—and proven—systems were, therefore, shut out. So were smaller, potential users, the independent machine shops.

All these forces were reversed in Japan. Labor organization favored machinist input. The extensive subcontracting system and the big firms encouraged small-shop use of advanced, flexible machining technology. And Japan had no joint military-academic bias for complex systems. Thus Noble reports that “by 1972, 90 percent of Japanese machines were of the simpler design.” Today of course, they have the world market!

In our radically changing environment, the U.S. has once more fallen victim to past habits tied to mass, complexity and inflexibility. Once more the charge of Japanese unfairness and conspiracy in pursuit of export markets breaks down under the spotlight of careful historical analysis.