ABSTRACT
Everyone knows that you cannot buy happiness, but less broadly understood is that you cannot buy profitability either. By some estimates, General Motors under Roger Smith spent close to $30 billion on robots and factory automation as its competitive response to Toyota. It did not succeed, as could have been easily predicted, and served only to hasten General Motors’ demise. Nothing for sale can give you a leg up on the other guy. If robots were the key to success, Toyota could have bought just as many of the same ones. Any machine you can buy, your competitors can buy too. Any factory you can build, so can they. In the end, success or failure is a function of management. The winner is always the company that manages best, not the company that spent the most. The downward spiral of American manufacturing is littered with poorly managed companies that thought they could solve their problems through the acquisition of successful small companies; this only destroyed them and the companies they bought.
