The Chrysler Group had the biggest jump in manufacturing productivity in 2003 among automakers with factories in the United States, according to an influential study of auto industry efficiency released yesterday. But overall, Japanese manufacturers continued to build cars and trucks more efficiently than their U.S. counterparts.
The Harbour Report, an annual survey compiled by Harbour Consulting of Troy, Mich., found that all six automakers with multiple manufacturing facilities in the United States were more productive in 2003 than the year before. The report "highlights the efforts every automaker in North America is making in the areas of lean manufacturing, continuous improvement and other manufacturing activities that drive down costs and drive up quality and productivity," Ron Harbour, president of the consulting company, said in a news release.
Harbour measures productivity in the number of hours required to build a single vehicle. DaimlerChrysler's Chrysler Group improved by 7.8 percent last year over 2002, averaging a total of 37.42 hours per vehicle for metal stamping, powertrain assembly and final assembly. That lifted Chrysler past Ford Motor Co., which averaged 38.6 hours per vehicle, a 3.4 percent improvement over 2002. General Motors Corp. remained tops among domestic car companies at 35.2 hours per vehicle, up 5.2 percent.
Harbour did not supply such overall corporate figures for Nissan, Honda or Toyota because some of their factories did not supply information to the survey. But the most efficient final assembly plant in America was once again the Nissan factory in Smyrna, Tenn., which builds the Altima sedan in an average of 15.33 hours. That plant has been at or near the top of the rankings for years.
Nissan was tops overall in final assembly efficiency, followed by Honda then Toyota. GM ranked fourth, and was the only domestic company that did better than the industry average.
Harbour also estimated the amount of profit each company earned per vehicle, and the Japanese companies far outdistanced the domestics. Nissan, again, came out on top, earning $2,402 per vehicle. Toyota was next at $1,742 and Honda was third at $1,488. GM was the only domestic company that showed a profit, at $178 per vehicle. Ford averaged a loss of $48 per vehicle, while Chrysler lost $496.
The domestic companies carry huge retiree pension and health care costs that eat into profits. The Japanese companies haven't been in the United States long enough to have so many retirees, and also have nonunion workforces that do not carry the same "legacy" obligations.
Those factors contribute to the Japanese companies' continued superiority in efficiency, as well, said George Peterson, president of AutoPacific, a California automotive consulting company.
"The Japanese brand plants are newer, they're more efficiently designed and they're also running with nonunionized workforces that are younger," Peterson said.
Chrysler has made a concerted effort over the past few years to increase its efficiency, which paid off with last year's industry-leading improvement, he said. "Clearly that's a very good result for a manufacturing organization that has been known for, let's say, spotty quality and efficiency in the past," Peterson said.
He added that all the companies are making rapid productivity improvements, both by improving factories and by changing the way vehicles are designed so they can be assembled more quickly from modular components.