On 6/3/05, Michael Perelman <[EMAIL PROTECTED]> wrote: > The Harbour Report, an influential gauge of productivity and profitability > that is > closely watched in the auto industry,
thanks. Here's a capsule description. As is common, "efficiency" is measured in terms of restricting the use of labor-time (hey! Karl Marx would be proud) rather than in terms of all costs, including "external" ones. HARBOUR REPORT: U.S. automakers boost factories' productivity But Toyota tops the list as most efficient June 3, 2005 BY MICHAEL ELLIS and JEFFREY McCRACKEN [Detroit] FREE PRESS BUSINESS WRITERS Detroit's three automakers improved the efficiency of their manufacturing plants in North America last year, but Toyota Motor Corp. made the most impressive gains and moved into first place ahead of Nissan Motor Co. in a benchmark study of worker productivity. For the third straight year, the domestic car companies cut the number of labor hours it takes to assemble a vehicle, stamp out its parts and build the engine and transmission, according to the annual Harbour Report. General Motors Corp. remained the most efficient of the three U.S.-based automakers, cutting nearly one hour, or 2.5%, from the time needed last year to build a vehicle to an average of 34.33 hours, the study said. Chrysler Group, a division of Germany's DaimlerChrysler AG, shaved 4.2% off its time to average 35.85 hours, down from 37.42 hours. Ford Motor Co. also chopped 4.2% off its time, to rank last among the three domestic automakers with a time of 36.98 hours, down from 38.60 hours previously. The gains by Ford and GM were particularly impressive given that they lost market share last year, Ron Harbour, president of Harbour Consulting, told reporters at a news conference Thursday. "The fact that they made an improvement, in light of the volume losses, was pretty significant," he said. "It's a real testament to their efforts that, even if the volume wasn't there, they continued to work on improvements, and it really showed." GM's car assembly plant in Oshawa, Ontario, where it builds the Chevrolet Impala sedan and the Chevrolet Monte Carlo coupe, took the title of most efficient vehicle assembly plant. The GM plant beat out Nissan's facility in Smyrna, Tenn., due in part to disruption caused by shifting some production of the Altima midsize sedan to a plant in Alabama, Harbour said. Chrysler, which has put common systems in place at its plants so they can run regardless of changes in workers or plant managers, has been the most-improved company in the last three years in the study, improving its hours per vehicle by 19%, Harbour said. While Chrysler's new 300C sedan is turning heads on the streets, its Hemi V8 engine is one secret to the company's stronger profits. The overhead-valve engine is quicker to assemble than more sophisticated overhead-cam engines, resulting in significant profits for the Auburn Hills-based automaker, Harbour said. "It's probably the most simple engine on the market," he said. Harbour credited Chrysler Chief Operating Officer Tom Lasorda [fresh from the L.A. Dodgers?], who joined the automaker from GM five years ago to run Chrysler's manufacturing operations, with the improvement. "Chrysler is for real. Tom Lasorda is the strongest lean-manufacturing guy at a top level," Harbour told the Free Press. "He's taking his background in lean manufacturing and drilling it into product people, purchasing and other departments and getting them to all buy in." But Toyota led all automakers with a 5.5% improvement to an average of 27.90 hours to build a new vehicle. "Toyota improving the most this year, I guess, is kind of like the New York Yankees adding two more All-Stars to their team," Harbour said. Toyota's leading-edge efficiency results in a cost savings of $300 to $500 per vehicle over the U.S. automakers, Harbour said, a significant figure when millions of vehicles are built each year. Ironically, Toyota is one of the few automakers that still assemble many car parts internally at their own plants, Harbour said. While many automakers seeking lower labor costs have outsourced the assembly of some car parts, such as the instrument panel, Toyota's high quality and productivity make building parts internally more profitable, Harbour said. "They insist, with their quality and their ability to manufacture better than their suppliers, why change? It's interesting when you look at these numbers, that, as good as Toyota is, they may actually be better than that," he said. Nissan and Honda Motor Co. posted the weakest results among the six major automakers last year, but they remain ahead of their U.S. competitors. Nissan's plant efficiency fell by 4.8% to 29.43 hours, hurt by the launch of the new Pathfinder sport-utility vehicle and the Frontier midsize pickup truck last year. Honda improved by just 0.2% to an average of 32.02 hours. While Honda placed last among the three major Asian automakers, its vehicle assembly plants have the ability to quickly switch products depending on market demand, flexibility that the domestic automakers can only dream of, Harbour said. Even though GM is the most productive of Detroit's three automakers, Harbour said it is troubling that consumers aren't willing to pay more for GM vehicles. The average price buyers pay for GM vehicles, including its high incentives, has remained relatively flat for the last five years, even as GM has launched new expensive vehicles like the Cadillac Escalade ESV. Other automakers have raised prices consumers pay for vehicles. Buyers paid an average of $20,659 for a new GM vehicle last year, compared to $26,514 for a Toyota, $24,105 for a Chrysler and $22,553 for a Ford car or truck, according to Harbour. "That's an alarming number," he said of GM's low prices. "The most alarming thing about that number is that has not changed significantly in five years. It's a major revenue problem. This feeds right into profitability." -- Jim Devine "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl M., paraphrasing Dante A.
