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Show ALL Forums  > Current Events  > Ford posts record loss of $12.7 billion How can a business lose this      Home login  
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 itsmeinco
Joined: 5/18/2006
Msg: 4
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Ford posts record loss of $12.7 billion How can a business lose this much money?Page 3 of 3    (1, 2, 3)
Compared to the US government, they are rank amateurs at running up red ink.

But seriously, much of the "gains and losses" reported on company reports aren't really cash losses so much as they are "book losses" generated by standard accounting practices such as depreciation and amortization that reflect investments made years ago.
 nipoleon
Joined: 12/27/2005
Msg: 6
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Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/26/2007 6:00:04 AM
curious98 is correct essentially.
Truly calculating profit and loss in big corporations is an exercise in perspectives like Quantum Physics. Depending on how you look at it, you can make a cow look like a snake or the other way around .
There's one thing I can guarantee.
The executives at Ford got paid.

A long time ago, when I bought my 1st old Datsun and looked under the hood.
I thought, some Japanese spy infiltrated the GM complaint dept. and stole all their files.
Then took it home and built a car which solved all the complaints.
 SoTexMan
Joined: 8/23/2005
Msg: 7
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/26/2007 9:08:05 AM
Hey, all:

"How can a busines lose this much money?"

By trying to continue to try to market and sell huge PUs and SUVs as if oil flowed like rivers and was cheaper than the water we normally see: By failing to adapt to present and future conditions. No vision for the future.

Why will it continue the way it is?

Precisely because the CEO just stated he will want to pay huge bonuses to keep his good ol' boy current management in their jobs, so they can help them out of the rut they themselves put Ford into.

"The significant problems we have cannot be solved at the same level of thinking with which we created them." - Albert Einstein.

Say 'Goodbye' to Ford. Henry paid his workers enough so they could afford the vehicles they were assembling, they turned Willow Run into a miraculous behemoth, churning out an overwhelming rate and number of aircraft in WW II, and now this. Henry would be sad. Henry would have kicked some a s s e s.

David


Messages done with sustainable energy, with Wind and Sun!
 step1
Joined: 4/25/2006
Msg: 8
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/26/2007 10:00:18 AM
Relating news stories, we can get a better idea of the problem.

CEO Alan Mulally from Ford said, “We know where we are. We are dealing with it, and we’re on plan.” I am wondering if there are denial issues? Maybe this response is to comfort the workers and stockholders. Yet their answer is plant closings.

They are planning to close 16 plants, including the Ranger truck facility in St. Paul, MN. Do we ever learn the history of closing plants? This is a short-term solution to a bigger problem that the above posters have mentioned. Are taxpayers willing to bail out a struggling business? What happen to AMC? They got government help, had plant closings, and then got merged. No matter how creative your accounting practices are negative brand loyalty and marketing can cripple a business. If your product were viewed as “crap” (as other posters view it) why would anyone buy it?

Wondering what happened to job security? Union membership dropped to 12 percent of U.S. workers last year, extending a steady decline from the 1950s, when more than a third of workers belonged to unions. Thousands of jobs are being outsourced or lost to technological changes. Employers are aggressively campaigning against the formation of unions. Looking for that gold watch?

Where are jobs being outsourced? China reports fastest growth in a decade. China reported Thursday that its economy grew 10.7 percent last year, the fastest growth since 1995, when the economy expanded 10.9 percent.

A product can be produced cheaper with technological changes.

The situation is supply and demand. Globally there is slumping demand for sport utility vehicles and other gas-guzzlers. Who would have guessed that?

Who are the consumers who buy these types of products? Oh some of them just got laid off in the plant closings. Will that Boeing guy can pick up the slack in purchasing Ford products with his bonuses? That is a lot of automobiles for one guy to purchase. I wonder if in his contract he has to buy Ford automobiles.

Well I can be wrong. Maybe we all look good in a new car. What is that car called A Stangg? Is that the Ford Mustang? With $12.7 billion maybe a DB9 Volante would be in order?
 NotTheAverageChick
Joined: 7/9/2006
Msg: 9
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/27/2007 4:16:52 AM
"Examine your own rationality here: The cars you several of you think of as being reliable are not the same as the cars Consumer Reports thinks of as being reliable. Why is that? Could it be that you have an anti-American Car Bias? Note that several Japanese name-brands produce their higly reliable cars in the US, and that many of those cars are designed by American engineers. This is an indication that American Labor and American Engineering are capable of producing top quality products. The problem, then, must lie in the management of the company."

There is an anti-American car bias among most people who will claim miraculous life/mileage of their foreign cars. They also forget to mention the many smaller repairs that need to be done on their cars when their touting 300k miles, they forget to mention that the car rides like crap, looks like crap, and they can't fit anything into the thing!

It's management that shelved the idea of hybrid technology years ago. It was management that pushed production of bigger and bigger SUV's because they thought they had a President who would get them a source of cheap or 'free' oil by means of military invasion. It's management's hubris that relied on projected loyalty of the American driver to their un-updated designs and mediocre quality. But, let's not forget that it's human nature to value what is scarce or new!
 sammylg
Joined: 12/20/2006
Msg: 10
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/27/2007 6:00:04 AM
I'd say that there were many reasons, but here is a top 5.

1. They have the same problem as GM. Their health care costs are estimated to have cost $2500 per vehicle. The unions have dealt themselves some of the best compensation packages in the industry.

2. Ford was the front runner in the SUV market. They're top vehicles were the F150 and Explorer and these cars were raking in huge profits.

#2 situation covered for #1 situation (someone told me that FORD makes between $8000~$10000 on F150's, Explorers and Expeditions), but as oil prices rose, people turned away from Explorers and Expeditions and towards more fuel efficient cars where there is less profit.

Ford also covered health care costs and their overburdened retirement pensions through economies of scale. But as fuel costs rose, they were caught off guard and began losing rapid marketshare.

3. Toyota and Honda ate their marketshare because of the above. The Japanese make amazing small cars and Ford had only the FOCUS, which was an aging car that was many years old. They also flopped with the Ford Five Hundred, which was a Taurus/Crown Vic replacement.

4. Also Ford failed at it's first attempt into the growing CUV market with their Ford Freestyle. They just launched the EDGE, but many people still see it as a SUV. They were also heavily vested in the Minivan market, but as of recently, many car manufacturers see the minivan market as dead (except for Chysler who is trying to revive it with their new Caravan).

5. Ford's Luxury Division, that included Range Rover, Jaguar and Aston Martin has also been a cash drain. It was supposed to have raised their profile and bring in lots of profit (luxury cars make lots more profit). Range Rover has been a small star (but has had lots of quality issues), but jaguar has been a bust (considering that most of their cars were taken from Ford chassis, like the X-type / Contour) as has Aston Martin. They are desperately trying to find a buyer to take this blight off their hands.
 whothehellknows
Joined: 7/23/2006
Msg: 11
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/27/2007 9:33:56 AM
Detroit claims it's because of the retirement benefits paid out that it's going broke, but then, if it made competitive products and tried to do anything but cheat consumers, they'd be able to support that; no sweat...


Ford should have funded their retirement accounts much better and planned ahead on the rising costs of health care. But why would they when they can just dump them all unto the government in a few more years?

All these great contracts the UAW signed years ago weren't that bad when people died a few years after retiring, now people can live 20-30 years afterwards and Ford (and GM) never planned ahead for it. They have no one to blame but themselves.
 whothehellknows
Joined: 7/23/2006
Msg: 12
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/27/2007 9:55:10 AM

It's plainly clear to anyone who's paying attention that Ford makes more cars that rank in the top ten quality list than Nissan does(and fewer that are in the bottom 10). And yet, many people would rather purchase a Nissan.


Nissan is nowhere near the size of Ford, and Ford had ONE brand on the list. They only own a share of Mazda, not the company itself. But I did used to own a Mazda B2300 which is their version of the Ford Ranger. It was in the shop three times and I had to argue to have the repair work covered under the warranty for two of them. Only when it was not even drivable did they concede that there actually was a problem. I got rid of it when it had 39,000 miles on it because it was not reliable and bought a new 2001 Nissan Frontier. Six years later the only problem other than normal wear and tear I have had with it is the ECU unit has gone out twice and it's been replaces twice under warranty. No hassles and great service. If I buy another vehicle it will probably be a Nissan because they have earned my business.

I gave Ford my business twice before and I wont make that mistake again.


Note that several Japanese name-brands produce their highly reliable cars in the US, and that many of those cars are designed by American engineers. This is an indication that American Labor and American Engineering are capable of producing top quality products. The problem, then, must lie in the management of the company.


It's always management. Good management would weed out and solve many of the problems that affect all companies. But the main reason companies like Honda & Toyota thrive is they have a corporate culture that focuses on quality, value and reliability. They listen to their customers and constantly reevaluate their performance. They grow their own leaders, train their own engineers from right out of school throughout their careers. They invested and improved the lean manufacturing concepts that so many American companies are trying to copy right now.

Read a book titled "The Toyota Way" by Jeffery Liker. It is an excellent look at the vast differences between the corporate cultures of Toyota and their American counterparts.
 kitsguy4u
Joined: 11/19/2005
Msg: 13
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Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/28/2007 1:16:30 AM
If it was only about appearances! I mean really some people think that ford is just trying to fudge the books to make it look bad? I guess after enron fudged the books to make things look good ford is trying the reverse??

Fords problems have been going on for YEARS. Firstly they had to stop their ad campaign "quality is job one". Because everyone knows that FORD means Found On Road Dead. Since you are already online just go to your local online auto trader and look at the resale value for fords. Better yet talk to someone that owns one. Get a copy of the lemonade guide and see how poorly ford is rated.

Its all poor planning and getting too comfortable when times are good. Look at the high salaries that the executives get. Do they get a pay cut if the company doesnt perform? Of course not.

Take a look at the GAP. They just fired their ceo because the company has been doing very poorly and is nose diving. But dont feel sad for him. He was given a $14 million severance package to soften the blow of losing his job. Too many companies reward incompetence at the top. Then give themselves big payouts when they have to start jumping ship.



 playfull maiden
Joined: 11/6/2006
Msg: 14
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/29/2007 2:46:57 AM
If this is repeated it is because when I posted it gave me the sign in box..twice so...grrr.

Well, it didn't happen overnight.

Also, the Japanese are doing some of what they did to the electronics business. America just doesn't run like Japan. We are a diverse culture and a huge country. If you are going to drive coast to coast here do you really wish to do it in a mini car? Japan has ALWAYS had incentive to build small. There is only so much room on an island.

Japan has loyalty and cooperation with their business structure as considered patriotic, we do not have that here.

The big cars and SUVs, trucks were doing fine till the oil prices went nuts...again. I still wonder how much of that is coincidental to having an oil president. We don't know what type of agreements the American car companies may have made with the oil companies over the years.

If Ford wishes to give incentives to the new management I think they should do it the same way Iaccoca did it when he rescued Chysler....they go without now and they get benefits based on how much improvement they create. That gives them some real incentive and the bucks too.

Retirement may be some of a challenge for the company. Consider the current workers are basically paying for the retired workers. Each time the work force gets smaller you lose wages that pay for the retirees.

If any of the American car companies will pull through all this it will be Ford. They are still a family owned (in some way) business. What they need to remember is the focus of Henry Ford when he started all this. He met a need. He made the automobile available to the common man. He also had his own trade school and trained his people...and well.

Our society has changed since then. We are starting to pay the price for "me now" instead of looking further down the road to see what our choices are going to cost ourselves and others.

If we buy everything from somewhere else we turn our country into a place where we will be the ones at the mercy of the rest of the world, because we put ourselves out of business.

If you really wish to buy Amercian, do it as best you can. If you feel let down be vocal about it. Expect the best, demand it. If you are business owners start listening to the folks in the trenches, they are the lifeblood of your business. No building stands without a foundation. The folks working in the big three sure wish the top management would listen to them....still do. This might be a really good time for them to start.

Live integrity in your own life. Our businesses, politics, and country are built of individuals. If you wish to see quality and honesty-give it. No more of "the end justifies the means" or "everyone else is doing it" or "its ok as long as you don't get caught"
 EpisodeIV
Joined: 6/28/2006
Msg: 15
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Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/29/2007 5:55:19 AM
I won't cry for Ford, GM or any other American co. that is doing the same'o same'o... trading the farm or basically everything for short term profits. The overall American corporate goal is not about quality (but they will spend billions in marketing to make us think that rather than investing in actual quality) or reliability (ditto). The overall American corp. goal is not so much to research the customers and climate to see what we want but to, again, spend billions in marketing to try and convince us we want what they want to manufacture. And guess what, for decade after decade we've bought it!

Basically everything goes in cycles. E v e r y t h i n g !!! From the planet's rotating on it's axis, orbiting around the sun to the weather. From natural disasters to man-made crisis. Feast and famine. We've been recording the cycles for milenia now. Now it is man-made crisises(?) that have taken over. We can predict most things including the weather within reason so that we can know we need to seek shelter or... R&D for the future and preparing for the ever changing future and next cycle. We can see we are using up our planet's resources at accelerating rates but do we shift from marketing blind consumerism to sustainable living? Of course not. The "short-term" profits are not there yet and won't be until we are drug kicking and screaming and with much knashing of teeth and flailing of arms and legs hopefully before it is too late to recover. The feast never lasts forever.

I'll shed one tear for the American workers. Only one. That is because we do this to ourselves. We don't have to buy into the "new" American-way. We don't have to be blind consumers. We choose to be blind. We choose to be led by the pied pipers of corporate profiteering. We choose to work our lives away so that we can not only sell our good years to the corporations but send them back our monies so the top management and share-holders get their unreasonable multi-million dollar bonuses and profits.

I've been in "the game." I've played "the game." I've seen the light. I see it isn't sustainable. Our economy, our lives are based on unsustainable growth. Another term to describe unsustainable growth is... Cancer! Our economy is a cancer. It can not sustain itself and will consume the host(s) until there is nothing left. But just like the smoker who is told they have lung or other cancer and if they don't change their habits or it is definitely going to kill them sooner than later... we still want to smoke.

We have the choice. All of us. Keep living like there is no tomorrow and sure enough... there will be no tomorrow!

Keep focused on short term profits and eventually the entire corporate culture is geared on cutting out everything that will help it survive into the future as a means to sustain that growth in profits. That means cutting R&D to develop products for the future. That means cheating your workers and using up their lives callously. That even means not building up your cash reserves to cover you're promised retirement benefits. Especially when you figure out the government has a system to bail you out. After all, what do you pay your government lobbyist for anyway?

Been there. Seen that. I don't want to go back. Please wake up and smell the coffee. Yes, Ford and GM are where they are today because of their management. Their management are where they are because of the corporate climate that has been fostered and the control over or influence they have in our government.

And at the very root of it all is us. We've supported it all! We've stuck our heads in the sand and ignored the rest of the world. Just like the corporations we worked for we leverage our futures for short term profits and pleasure and spent that and more. Now we want to cry foul. How could they do that to us? We should be asking ourselves, why did we do that to ourselves? We are Ford. We are GM. How do we change ourselves form being blind throwaway consumers only interested in the short term into sustainable, enjoyable, sincerely happy humans that aren't destroying our mother ship?
 sammylg
Joined: 12/20/2006
Msg: 16
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/29/2007 12:16:39 PM
America just doesn't run like Japan. We are a diverse culture and a huge country. If you are going to drive coast to coast here do you really wish to do it in a mini car? Japan has ALWAYS had incentive to build small. There is only so much room on an island.


Actually, if that is the case, than the Canadians, who have a much lower population density and a larger country should all be driving hummers.

The answer is that Canadians drive much smaller cars with 4 cylinder engines than Americans. In fact, their trends (other than the F150) is to drive cars that are in the size of the Ford Focus/Chevrolet Cobalt. SUV's never sold that well in the true north (where you'd think they would because we all live in igloos right?)

It falls more to the latter part of your quote. Americans love large cars mainly because other than Venezuela and a couple of other oil producing nations, you have the lowest gas prices by far in the world. Notice how much car size has shrunk in the US since gas prices have gone up? Gone are all the SUV's and cars like the Honda Civic has re-entered the top 10.
 sammylg
Joined: 12/20/2006
Msg: 17
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/29/2007 7:19:42 PM
"They don't "have" to turn their company around. They haven't "had" to do that for the last twenty years, and they don't "have" to start now.

Business isn't all about money. Pride and arrogance explains a great deal. Billions have been lost by the wealthy on schemes designed to fuel not profits, but egos.

Ford will produce a decent product when it d@mn well feels like producing a decent product, and the market will have little to do with it."

So what you are saying is that Ford will just fcuk off and die? Cause under your philosophy, that is just about what will happen.
 sammylg
Joined: 12/20/2006
Msg: 18
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 1/30/2007 10:22:16 AM
Of course they can act irrationally. I was so happy when they got rid of Ford Jr. The big problem isn't always management alone. Another big problem is how the Ford family has their voting share arranged in a way that they have most of the voting control, but own nowhere close to 51% of the total shares.
 packleader
Joined: 8/18/2006
Msg: 19
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 2/1/2007 10:57:02 AM
Throw-away.............This seems to be the key to keeping our economy humming at break-neck speed.We are so consumed with buying the next gizmo,that from a practical stand-point we just don`t have enough room to store everything.This proclivity to throw "stuff" away seeps into other areas of our lives.
Lets see now,follow me for a bit......

Top of the list....Throw-away the spouse,and maybe the kids too....

Of course then we get into the area of throw-away gizmo`s.....,and at this point I have to say that there is not enough space on this forum to list all the throw-away gizmo`s in our modern society,but I guess you get my drift.I guess it`s all about getting something new to make you "feel good or better as the case may be".The head shrinkers would probably put a medical term to all this business.Suffice it to say.....the economists would not be happy at all,if the economy did not continue to grow at expense of maybe keeping something longer than a few years.

How about you,are you doing your part in the consumerism area?You know, to keep our economy humming you have to keep buying. All this buying makes me dizzy and I would rather concentrate on fishing.
 packleader
Joined: 8/18/2006
Msg: 20
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 2/4/2007 5:33:16 PM
Part of any restructuring and eventual downsizing of a complete industry such as the auto industry should include the massive dealer net-work.The numbers for 2006 were 13,974 for G.M.,7,106 for Ford and 8,541 for Chrysler Corp.,thats a whole lot of dealers and this would have to be included in any meaningful plans to pare down the industry.It`s just too massive after you factor in the foreign competition that is knocking our socks off.

You see foreign automakers with fewer re-tailers actually sell more cars.If I was a major stockholder in any of these companies,you can bet that I would be clamoring for very quick change.I think that most dealers would agree that you need to shrink the number of showrooms to bring higher profitabilty to dealers and actually increase quality of service.In this case bigger is not actually better.



Pack.
 HalftimeDad
Joined: 5/29/2005
Msg: 21
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 2/4/2007 6:04:53 PM
That's an interesting point. But I've long contended that the only thing GM has going for it is their dealer network. They've had poor quality and terrible designs for years, yet continued to sell the most vehicles. Back when GM was king all the really good car salemen and entrepeneurs wanted GM dealerships. They've been riding on the coattails of the great reputations of their dealers for decades. If they cut their dealerships they are really going to suffer.
 marita_b
Joined: 6/15/2005
Msg: 22
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Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 2/5/2007 7:32:24 AM
I will weep for them in my spare time,...
 packleader
Joined: 8/18/2006
Msg: 23
Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 3/12/2007 10:25:35 AM
Maybe the guy from Boeing can turn ford around.
Ford selling off control of Aston Martin
Last Updated: Monday, March 12, 2007 | 10:09 AM ET
CBC News
Ford Motor Co. said Monday it has reached a deal to sell control of British luxury sports car maker Aston Martin.

The sale values Aston Martin at $925 million US. Ford will retain a $77 million stake in the company, whose cars have been made famous in the James Bond films.

The new Aston Martin V8 Vantage Roadster on preview at the 77th Geneva International Motor Show, in Geneva, Switzerland, on March 6, 2007.

Aston Martin's new controlling owners will include David Richards, founder and chairman of Prodrive, a motorsport and automotive technology company; John Sinders, an Aston Martin collector and a backer of Aston Martin Racing; and Investment Dar and Adeem Investment Co., a pair of international investment companies headquartered in Kuwait.

Ford, which has been struggling financially, announced in August 2006 it was exploring strategic options for the Aston Martin business as it restructured its core automotive operations. Ford said the sale will help it build liquidity.

"The sale of Aston Martin supports the key objectives of the company: to restructure to operate profitably at lower volumes and changed model mix and to speed the development of new products," said Alan Mulally, Ford's president and chief executive officer.

"From Aston Martin's point of view, the sale will provide access to additional capital, which will allow Aston Martin to continue the growth it has experienced under Ford's stewardship," Mulally said in a release.

The sale is expected to be wrapped up in the second quarter of this year.

Aston Martin has been building cars since 1915. Ford bought into the company in 1987, and took over full control in 1994.

Pack
 JustKelly70
Joined: 2/9/2007
Msg: 24
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Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 3/20/2007 4:43:01 PM
I heard this recently, The only car manufactured in the US and used in Nascar....Is a Toyota
 scorpiomover
Joined: 4/19/2007
Msg: 25
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Ford posts record loss of $12.7 billion How can a business lose this much money?
Posted: 11/26/2007 6:47:03 AM

The Japaneese are light years ahead of the "big three", which are not so big any more.
Its not just how they build their vehicles, its their entire buisness model that is superior.
The "big three" better get on board with what Honda / Toyota are doing, or they are done.
The Japanese have a completely different work ethic, and their management structure mirrors that:
1) When I went for an interview with a Japanese company in the UK, they told me that if a man starts at 21 in a Japanese company, then at 31, he has been there 10 years. At 41, 20 years. At 51, 30 years, and at 61, 40 years. It's the way they think. If you want to leave, not just your boss wants to know why. His boss wants to know why and what they can do to keep you.
2) In line with being interested in their employee's welfare, when Japanese car manufacturers started building car plants in the UK, one of the first things they did that reached the news, was that they required ALL employees to spend a few minutes in some brisk exercise at the beginning of the day, so the employees would get some exercise and be healthier.
3) I once saw a documentary about Soichiro Honda, the founder of Honda, where he said that a good part of the reason that he made such good cars, was that in Japan, engineers were required to learn the whole manufacturing cycle, from inception to completion, including the Marketing, Advertising, and Sales areas. So, when he made a car, he saw the whole picture.
4) I once saw that Japanese companies employ people full-time who read patents, so that they can save billions on R&D and just pay royalties to the patent owner.
5) Japanese discourage imports. When my younger brother went there for a year, he discovered that most mobiles made outside wouldn't work there, and only the Japanese models would work. So he had to get a Japanese model while he was there. He said they have the latest gadgets, and wanted to get me one, but it wouldn't work outside Japan.

Read a book titled "The Toyota Way" by Jeffery Liker. It is an excellent look at the vast differences between the corporate cultures of Toyota and their American counterparts.
I just saw it on Wikipedia. WOW! They are totally committed to continuous change and self-improvement. Their management system reads like a Self-Help book. If they really run their company that way, it's no wonder they are out-performing American manufacturers.
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