DETROIT -- Domestic automakers can point to productivity improvements as a silver lining in their overall North American performance. But they continue to trail Japanese competitors, according to the annual Harbour Report released last week.
General Motors, Ford Motor Co. and the Chrysler group each cut the number of labor hours needed to produce vehicles in 2005, said Harbour Consulting Inc. President Ron Harbour.
Harbour said Chrysler led the domestic-brand improvement in 2005 with a 6 percent cut in labor hours per vehicle. It was followed by GM at 3.3 percent and Ford at 3.2 percent. The improvements were made more difficult by declining production volumes, Harbour said at a press conference.
Quality improvements have led to productivity improvements, resulting in less rework and other costs associated with defects, he said.
Despite the gains, the domestic makers trailed Japanese automakers in manufacturing efficiency, the report shows. But Harbour said the gap continues to narrow.
Nissan Motor Co. reclaimed the title of the most efficient producer of vehicles in North America after straightening out problems caused by the launch of more than six vehicles in the past two years, Harbour said. It was No. 1 in 2003.
Nissan needed 28.46 labor hours per vehicle across assembly, stamping and powertrain operations in 2005, besting runner-up Toyota Motor Corp. at 29.40. Honda Motor Co. was next at 32.51 labor hours, followed by GM at 33.19, Chrysler at 33.71 and Ford at 35.79.
Harbour said Nissan's efficiency gave the automaker a $300- to $450-per-vehicle cost advantage over less productive competitors. Toyota was the most efficient in 2004 at 27.90 hours.
The gap narrowed between the most efficient and least efficient automakers in 2005 to 7.33 hours per vehicle, compared with 9.08 hours in 2004, the report says.
The spread was nearly 15 hours in 1998, putting the domestic automakers at a manufacturing cost disadvantage of up to $1,500 per vehicle, Harbour said.
Top 2 plants closing
Ironically, the two most efficient assembly plants in North America in 2005 are scheduled to close.
Ford's Atlanta assembly plant was the most efficient last year, using just 15.37 labor hours per vehicle. The No. 2 finisher was GM's Oshawa, Ontario, No. 2 plant, which makes the Pontiac Grand Prix, Buick LaCrosse and Buick Allure sedans.
The automakers are closing the plants to realign their production capacities with declining sales.
Older GM and Ford plants with mature products can show high productivity because they have work forces with long experience building a limited number of models.
Toyota finished No. 1 in stamping and engine manufacturing productivity. It averaged 792 parts stamped per hour, well ahead of GM's 745 parts per hour. Toyota's Cambridge, Ontario, plant finished first in overall stamping productivity.
Toyota's average engine production came to 2.9 hours per engine, ahead of Honda's 3.27 hours per engine. Toyota's Buffalo, W.Va., operation finished first in four-cylinder productivity for the fifth straight year. The line improved from 1.88 hours per engine in 2004 to 1.82 hours in 2005.
Harbour Consulting, of Troy, Mich., published its first North American productivity study in 1989. The Harbour Report is used widely by the industry for benchmarking.
You may e-mail Dave Barkholz at [email protected]