Productivity up at auto plants

DETROIT, Michigan (Detroit News) -- The Japanese remain the most efficient auto assemblers in North America overall, but perennial laggard General Motors Corp. is continuing to improve its productivity at a rapid pace.

Productivity is up on GM assembly lines

And for the first time, a plant owned by a U.S. automaker, Ford Motor Co., tops an annual list of the most efficient car and truck factories in Mexico, Canada and the United States.

Overall, labor productivity at North American car factories advanced at a healthy 4.5 percent in 1999.

Nissan Motor Co. is still the most efficient manufacturer in North America -- averaging 18.7 hours to assemble cars and trucks at factories in Tennessee and Mexico.

Honda Motor Co. ranks second among major manufacturers, at 20.26 hours per vehicle, followed by Toyota Motor Co., which requires 21.76 hours to build a car and truck.

It takes Ford 23.94 hours to assemble a vehicle, followed by GM with 28.41 hours and DaimlerChrysler at 30.16 hours per vehicle.

Because they are newer and generally assemble vehicles that are less complex with fewer parts, such as small and mid-size cars, Asian-owned plants in North America tend to score better on the survey.

GM, Ford and DaimlerChrysler's Chrysler group build a wide range of vehicles throughout North America, including giant pickups, sport-utility vehicles and vans, at a stable of mostly older factories.

GM's performance was an 8.8-percent improvement from 1998 -- the best among major automakers.

The automaker has used the recent introduction of new full-size pickup trucks, and mid-size and large cars to standardize assembly techniques from plant to plant.

GM is also benefitting from new engines that require fewer parts and workers to assemble.

The closely watched productivity rankings are based on an annual study of assembly, stamping, engine and transmission plants by Harbour and Associates Inc., a manufacturing consulting firm in Troy.

"Ten years ago we couldn't describe any Detroit-owned car or truck factory as lean," said Harbour and Associates President Ron Harbour. "Today, each of the Detroit automakers have plants that rank up there with the best in the world."

For the first time, Mitsubishi Motors Corp.'s plant in Normal, Ill., was included in the study. It required 30.49 hours to build a vehicle last year.

North American plants operated by Volkswagen AG, BMW AG, DaimlerChrysler's Mercedes-Benz unit and Subaru-Isuzu Automotive Inc. don't participate in the study.

Ford Motor Co.'s Atlanta factory ranks as the most productive in North America, marking the first time a Detroit-owned factory has topped the list.

In 1999, the plant needed 17.49 hours to build the Ford Taurus and Mercury Sable, edging out Nissan's Smyrna, Tenn., plant, which requires 17.53 hours per vehicle.

Detroit automakers continue to pay a steep penalty for failing to be as proficient as their Japanese rivals, according to the report.

If GM operated its North American plants as efficiently as Nissan, Harbour says, GM could earn another $5.3 billion a year with 41,700 fewer workers.

GM and DaimlerChrysler still trail rivals in the study because they rely on unscheduled overtime to meet regular production plans.

The study also underscores long-term financial challenges facing Detroit automakers.

Honda and Toyota are matching the profitability level of Detroit automakers primarily by manufacturing cars. But as Japan's leading automakers shift to assemble more profitable sport-utility vehicles, minivans and pickup trucks in North America, the gap in profits could grow wider in Japan's favor.

"The need for GM, Ford and Chrysler to move faster to close the productivity gap with their Asian rivals is becoming more apparent as Japan enters more lucrative product segments," said Harbor.

"We have every indication Toyota will master truck assembly in the same fashion they build cars," he said. "It has to trouble Detroit that the big Toyota Tundra pickup built in Indiana doesn't require rebates to sell."

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