Why General Motors lost and Toyota won

In mid-2005, Toyota is the winner and GM the loser. Toyota profits exceed those of the rest of its competitors, supported by successful new products (a broad spectrum of cars, minivans, SUVs, and trucks), new model lines (such as Lexus and Scion), new technologies (such as the hybrid drive system), and new markets for sales and production (Toyota passed Ford as the world's second-largest automaker and Daimler Chrysler as the third largest in North America). General Motors is losing share, its credit has been downgraded to junk, and declining sales revenues are coupled with increasing costs for idled and retired workers. Yet, 20 years ago, such an outcome would not have seemed inevitable. Toyota was known for reliable but otherwise boring cars, while GM had market share, brand recognition, experienced engineering and production staff, and a broad-based sales network. Furthermore, it had just created the NUMMI joint venture with Toyota, a chance to learn directly from the world's best manufacturer how to achieve high-quality output efficiently.