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Winning kept America's old factories
Rebuilt from nothing
Germany and Japan had to rebuild after the war, so their factories were reset from nothing. They went fully greenfield, which means a clean-sheet factory in an empty building, with new equipment, systems, and processes.
Why America never reset
America never got that chance, because it won. Instead of resetting, it kept plugging things on and moving the plates around. Many American factories are literally the same ones from the 30s, or from the Cold War, with capital equipment that was never rebased.
The capital gap
Add a legacy workforce and factories cobbled together over time from World War II onward, and the country is roughly half a trillion dollars behind in the capital spending needed to recapitalize.
How did postwar Japan turn factories into an advantage?
In 1950, the Union of Japanese Scientists and Engineers invited American statistician W. Edwards Deming to lecture on statistical quality control. Japanese manufacturers adopted his methods widely, and Toyota's Taiichi Ohno built the Toyota Production System in the following decades. That system cut waste by having each step pull the next one along only as needed. Japan's Deming Prize, created in 1951, still honors companies for quality.
Why build a factory from an empty field?
A factory on undeveloped land can be laid out around the process, with no old columns, floors, or utility lines forcing compromises. Planners call such sites greenfield, as opposed to brownfield sites that reuse existing buildings. Toyota's plant in Georgetown, Kentucky, which began producing cars in 1988, was its first wholly owned plant in the United States.
Why did old factory layouts slow new technology?
Early factories ran their machines from a central steam engine through overhead shafts and belts, so buildings were designed around that power system. When electric motors arrived, many owners simply swapped them in and kept the old layout. Economic historian Paul David argued in his 1990 paper The Dynamo and the Computer that the productivity gains from electricity took decades to appear for this reason.
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