Toyota: First Operating Loss Since 1941

Toyota projects first operating loss since 1941, By YURI KAGEYAMA, AP Business Writer, Dec 22, 2008.

Toyota forecast an operating loss of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began disclosing such figures in 1941. But it did have an operating loss in unofficial, internal calculations for the year ending March 1938 a year after the company was founded.

Operating income reflects a company’s core business performance and does not include income taxes and certain other expenses. Last fiscal year, Toyota had an operating profit of 2.27 trillion yen.

Culture: Quality in America …

I have been conducting research on an article I am working on. I tentatively titled it: Quality Leadership: Always The Way Ahead.

Past studies on American culture related to quality identifies a few paradoxes:  Becoming the best at something motivates Americans; producing the best products or services does not; doing is more important than planning.

How many people would contract to build a house without a plan?  Doing so would result in a home that takes longer to build, would be more expensive, would likely not meet expectations and runs a high risk of failure.  Good news (tongue in cheek) is it might generate an individual crisis (no money, no house) which would frustrate and motivate us to improve the process without a focus on the outcome. … or as Dr. Phil would say, “How’s that working for you?”

ARTICLE: Quality American Style ;  What Makes American Teams Tick

Abstract:Quality American Style. American beliefs about quality and improvement are described by French psychologist G. Clotaire Rapaille. Being aware of these archetypes should help implementers customize quality initiatives in the United States. Words like “quality,” “control,” and “total” have negative connotations for Americans.

Change is acceptable to Americans if they can control it. Imperfection is also acceptable. Incremental improvements are not as interesting as are breakthroughs and crises.

Americans like nurturing, caring, the opportunity to be best at something, chasing an impossible dream, and trying to improve their potential selves.

They are motivated by frustration, anxiety, and the chance to improve a process by totally redesigning it.

Doing is more important than planning, especially when it is possible to learn from mistakes and failures.

These archetypes have been independently validated in surveys performed by the Wirthlin Group. Detailed interviews of 60 individuals and telephone surveys of 1,500 people confirmed Rapaille’s findings.

Archetype Discoveries: Fat Land XXXL… The New Plague

Excerpt: Quality in America … “It Works”  …. The process (effort) is more important than the product (outcome).  Becoming the best at something motivates Americans; producing the best products or services does not. Thus, quality must be made personal, the focus must be on the individual and on his or her processes.

Additional Info:

President Bush – Interview

Bush On His Record, (Wall Street Journal)…Kimberley A. Strassel, Dec 20, 2008, pg.13

As he sits at his mile-high desk, clad in his Air Force One crew jacket, George W. Bush is as he has ever been: upbeat, focused, confident in his past decisions and in the future.

On Iraq …

The action that will always most define the Bush presidency will be the invasion of Iraq. It is also the decision he remains most visibly passionate about, especially given it was the cornerstone of his broader “freedom agenda” in the Middle East. That agenda, he says, is working, and he remains confident that while it “was widely criticized by some as being hopelessly naïve and idealistic, is really the only practical way to provide long-term security . . .” He is convinced the region is stepping into a new era, and will continue on that path “unless America loses nerve in our belief in the universality of freedom.”

Would it have been easier to just replace Saddam with another strongman? “Early on, I knew we were in an ideological conflict, and you don’t win ideological conflicts by replacing one strongman with another. . . . And frankly, that’s been a big shift in our foreign policy in the Middle East, which is — and this is not a criticism of anybody, it’s a recognition that presidents deal with the realities of the situation. But in the Cold War, to prevent communism from taking root in the Middle East, we promoted stability. Well, it just so happens that over time people became so resentful and so hateful that they were swayed by a group of very smart and very capable ideologues to become their foot soldiers.”

On the home front:

He also counts as an accomplishment his protection of the homeland, in particular that he is “leaving behind tools that future presidents will be able to use — and even though they were controversial when they were implemented, people are going to get in that Oval Office and say, now I understand why this tool is important.”

Afghanistan: New Strategy

Afghanistan, The Next Surge, Can more American troops and a new strategy beat the Taliban? The Economist, December 19, 2008

KABUL — A surge of American troops and a rethinking of tactics worked in Iraq. Can the same be done for the troubled mission in Afghanistan? As America draws down in Iraq, it is sending over 20,000 more troops to Afghanistan. A new strategy is also beginning to emerge after months of high-level consultations, and is due to be unveiled in the coming weeks by the Afghan government and the United Nations.

According to officers in the NATO-led force, the first priority will be to reclaim the ring-road, Afghanistan’s main artery, around which the main population centres are concentrated. This route was rebuilt with Western aid after the toppling of the Taliban, but has become increasingly dangerous. The sections south of the capital, Kabul, are largely cut off by Taliban insurgents and criminal gangs.

With more Western troops, and the training of a greater number of Afghan security forces, another aim will be to strengthen areas where the government is in danger of losing control. Forty such districts will be the target of a comprehensive military and political effort to stop them from falling into Taliban hands. A pilot scheme involving the first five of these so-called “critical districts” is due to be set up soon.

Tribal powerbrokers in these areas will be invited to agree to a “contract”. The government, backed by international forces, will undertake to provide security, bring economic development and give each tribal council or shura (whose members will be paid by the government) a greater say in the running of local affairs. In return, the tribes will promise to expel and deter insurgents, and to provide recruits (probably about 50 per district) for a local force that would perform guard duties.

This has echoes of the “Sons of Iraq” militia that the Americans created in Iraq as part of their successful “surge”. It is also akin to the Arbakai, tribal forces that historically operated in parts of Afghanistan.

Many elements of this strategy have been tried before; the Arbakai concept was proposed a year ago by Britain’s prime minister, Gordon Brown, but made little progress. This time around, disparate initiatives will be joined into a single package. The greater number of forces should make the promise of security more credible, and the Afghan government and the UN will be placed at the forefront of the process.

Will it work or will it, like many other initiatives, collapse amid the perennial feuding and corruption of Afghan tribal politics? President Hamid Karzai has lost popularity, and the quality of most of the police and district officials is woeful.

The Afghan army has been built up with some success. But attempts to improve the police have been unpromising. The Afghan National Auxiliary Police, a local force to be raised by tribal elders, was scrapped this year when it turned out to be a divisive ragtag militia, often biased towards a particular tribe and packed with drug addicts and petty criminals.

Another attempt at reform has been the so-called “focused district development” in which all policemen from a district are taken out for an eight-week training course, re-equipped, and sent back with American soldiers acting as “mentors”. The mentors were supposed to withdraw after a few months, but a year into the programme they have yet not felt able to leave their Afghan charges. NATO says there is a shortfall of about 2,300 mentors.

Afghan and Western officials working in the provinces agree that, if the new approach is to work, the right choice of shura members will be crucial. But maintaining these bodies will not be cheap for the Kabul government; the proposed wage for members has already been cut from $200 to $120 a month.

Balancing local factions is notoriously difficult. “The government is weak and people are losing faith,” says Haji Bidar Zazai, an MP from Ali Khail, a proposed “critical district” in Paktia. “We have eight tribes in our district but if a shura is not representative of all eight it will never work.”

Relying on tribal structures may work best in the south-east of the country, where the tribes are comparatively stable and cohesive. In the south, however, tribal structures are weaker, warlords tend to dominate and insurgents exploit tribal rivalries. In Iraq, the Sunni tribes were vital to success; in Afghanistan, tribal rivalries may undo the best-laid plans.

nKorea: Morality in Negotiations

 Moral Surrender To Pyongyang, (Washington Post)…Michael Gerson, Dec 19, 2008

…The negotiations with North Korea were worth a try. But diplomatic engagement does not require moral surrender. And when diplomats such as Christopher Hill are deployed, it does not signify that the adults have arrived. It means that hope is fading.

The argument was simple: In an impossible situation — facing an infantile and possibly ill dictator with a nuclear weapon — Hill’s approach was worth a try. China was skillfully enlisted in an effort to pressure and isolate North Korea. Concessions were made in exchange for the resumption of negotiations, incremental progress and vague promises of future cooperation. Fuel was shipped. North Korea was removed from the sponsors-of-terrorism list.

Some have called this appeasement. It is more like bribery — with a special emphasis on getting North Korea to part with at least 30 kilos (66 pounds) of plutonium. Hill has summarized his approach this way: “If you give up 30 kilos, we will sign a bilateral assistance program.”

The negotiations with North Korea were worth a try. But diplomatic engagement does not require moral surrender.

nKorea: Impact of Sanctions

Chinese Exports Blunt U.N. Sanctions, (Washington Times)…Nicholas Kralev, Dec 19, 2008

U.N. sanctions on North Korea, imposed after it tested a nuclear device in 2006, have produced no impact, largely because China has failed to implement the measures and has increased exports of banned luxury goods to the North, according to a new report.

John R. Bolton, former ambassador to the United Nations and a vocal critic of the organization and negotiations with the North, said: “Nothing ever surprises me about the ineffectiveness of U.N. sanctions.”

He said, however, “For a permanent member [of the Security Council] not to comply is serious,” adding that China “is the only country that has leverage over North Korea.”

PBS Interview: Secretary Gates on Policy

Interview With Defense Secretary Gates, (PBS)…Charlie Rose, Dec 17, 2008.

In a Wednesday night interview, Defense Secretary Gates discusses several topics, including how national security policy may change in the Obama administration, and events in Afghanistan, Pakistan and Iraq.

DEFENSE SECRETARY ROBERT GATES: My biggest concern in Afghanistan is the history of foreign armies in Afghanistan going back to Alexander the Great. As long as the Afghan people see us as their friend and ally, as long as they see us as in this fight for them, as well as for ourselves, then I think we’ll be okay. But if we get too many forces in there, if they come to see us as in it for only ourselves and not as their ally and they turn against us, then I think we cannot be successful.

He has argued for a U.S. military that better integrates diplomacy and soft power with hard power. Under his watch, Iraq has become a more stable place, a new U.S.-Iraq security agreement requires U.S. combat troops to withdraw by the end of 2011, but the war in Afghanistan has intensified. 

Afghanistan: NATO Challenges

U.S. To Supply Bulk Of Additional NATO Afghan Troops, (Bloomberg.com)…James G. Neuger, Bloomberg News, Dec 18, 2008.

The U.S. will supply the bulk of additional NATO troops for the war in Afghanistan, with only smaller-scale reinforcements coming from European allies, the alliance’s supreme military commander said.

American concerns that some European allies aren’t pulling their weight erupted last year when Defense Secretary Robert Gates — set to keep his job in Obama’s Cabinet — warned that NATO risked devolving into a “two-tiered alliance.”

American concerns that some European allies aren’t pulling their weight erupted last year when Defense Secretary Robert Gates — set to keep his job in Obama’s Cabinet — warned that NATO risked devolving into a “two-tiered alliance.”

Defense/IG Report: Financial Mismanagement- Common or special?

You make the call … does the headline reflect a new event or a problem that’s been around awhile?

IG’s Report Highlights ‘Material Weaknesses,’ Financial Mismanagement At The Pentagon, (Washington Post)…Walter Pincus. Dec 15, 2008. Most critiques of the Defense Department’s spending focus on macroeconomic issues that are so large, readers can only groan and move on. Last week provided yet another example: The Pentagon’s deputy inspector general for auditing released a 140-page independent auditor’s report on the department’s financial statements for fiscal 2007 and 2008.