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Passage 37 Japanese firms have achieved the highest levels of manufacturing efficiency in the world automobile industry. Some observers of Japan have assumed that Japanese firms use the same manufacturing equipment (5) and techniques as United States firms but have bene- fited from the unique characteristics of Japanese employees and the Japanese culture. However, if this were true, then one would expect Japanese auto plants in the United States to perform no better than factories (10) run by United States companies. This is not the case, Japanese-run automobile plants located in the United States and staffed by local workers have demonstrated higher levels of productivity when compared with facto- ries owned by United States companies. (15) Other observers link high Japanese productivity to higher levels of capital investment per worker. But a historical perspective leads to a different conclusion. When the two top Japanese automobile makers matched and then doubled United States productivity (20) levels in the mid-sixties, capital investment per employee was comparable to that of United States firms. Furthermore, by the late seventies, the amount of fixed assets required to produce one vehicle was roughly equivalent in Japan and in the United States. (25) Since capital investment was not higher in Japan, it had to be other factors that led to higher productivity. A more fruitful explanation may lie with Japanese production techniques. Japanese automobile producers did not simply implement conventional processes more (30) effectively: they made critical changes in United States procedures. For instance, the mass-production philos- ophy of United States automakers encouraged the production of huge lots of cars in order to utilize fully expensive, component-specific equipment and to (35) occupy fully workers who have been trained to execute one operation efficiently. Japanese automakers chose to make small-lot production feasible by introducing several departures from United States practices, including the use of flexible equipment that could be (40) altered easily to do several different production tasks and the training of workers in multiple jobs. Automakers could schedule the production of different components or models on single machines, thereby eliminating the need to store the buffer stocks of extra (45) components that result when specialized equipment

1. The primary purpose of the passage is to