Toyota, Ford Plants Triumph in Harbour Report Study
18 June 1999
Toyota, Ford Plants Triumph in Harbour Report Study
DETROIT, June 17 -- Toyota and Ford had the most productive
car assembly plants in North America in 1998, according to The Harbour Report
North America 1999, an annual automotive study released today by Harbour and
Associates, Inc.
As a company, Nissan led in overall assembly productivity, with Honda,
Toyota, NUMMI and Ford close behind. But Nissan's Smyrna, Tenn., plant, which
finished as the top car assembly plant the past five years, ranked fourth this
year among individual plants. According to The Harbour Report, Toyota's
Cambridge, Ontario, operation surpassed Nissan in assembly hours per vehicle
to become the most productive plant overall.
Ford plants in Atlanta and Chicago finished second and third in the car
assembly category. Ford's Louisville operation also surged ahead of Nissan
Smyrna to rank as the most productive truck assembly plant in North America.
"It's quite an achievement for Ford to surpass Nissan with not just one, but
three plants in the same year," said Ron Harbour, president of Harbour and
Associates. "The Nissan Smyrna plant achieved very good results in 1998, so
the performances by Toyota and Ford were truly remarkable."
The Harbour Report, which started in 1989, measures assembly, stamping and
powertrain performance -- plant by plant -- for automakers in North America.
The financial chapter of the report examines each automakers' cost and
profitability results for the year. Here are some highlights from this year's
report:
Assembly
Harbour noted the wide gap among manufacturers in measuring total hours
per vehicle performance.
"Neither DaimlerChrysler nor General Motors was able to close the
productivity gap with the leaders," Harbour said. "In fact, the two companies
require over 50 percent more labor hours than Nissan, the efficiency
benchmark, and over 30 percent more than Ford."
AutoAlliance and CAMI recorded less efficient labor productivity in 1998,
mostly because of low vehicle production volumes.
Harbour said that although DaimlerChrysler, Ford and General Motors all
run considerable amounts of overtime, DaimlerChrysler and GM are having to
expend more premium, higher cost overtime hours to meet their production
schedules.
"This includes unscheduled overtime to produce daily units the
manufacturers should have been able to produce during normal straight time
hours," Harbour said.
Other factors that drive overtime and a gap in labor productivity, he
said, include extensive maintenance time, repair or rework of vehicles because
of quality or factory workmanship issues and line stocking due to material
shortages.
Stamping
Honda, Toyota and Nissan once again dominated the stamping productivity
measurements. However, General Motors finished first in the category of
pieces produced per hour of production -- the first time GM earned a top spot
in one of the stamping measures.
Ford, though still far behind the leaders, did manage to achieve double-
digit improvements in every stamping measure.
Toyota led the way in hours per vehicle, hits per worker and pieces per
worker measures, as well as the average number of die changes per line, per
day category.
Honda was first in the vehicles per line measure, and tied Nissan for
first in average die changeover time. Nissan also finished first in the hits
per hour category.
GM recorded an impressive 15 percent improvement in number of pieces made
each hour to finish first in the pieces per hour measurement.
"General Motors provided evidence that its focus on the stamping business
is really paying off," Harbour said.
But GM still trails Ford by a wide margin in the labor hours required to
produce stampings for a vehicle. Ford needs just 2.98 hours per vehicle, to
5.38 for GM.
Powertrain
Toyota and Honda recorded substantial improvements in engine labor
productivity, with Toyota taking top honors. Although third overall, Ford's
hours per engine declined from 3.94 hours to 4.57 in 1998.
While GM and DaimlerChrysler finished fourth and fifth, respectively,
Harbour noted that GM powertrain "showed a big improvement and is closing the
productivity gap with Ford." Last year, it took GM on average over 30 percent
more labor hours than Ford to build an engine; this year, the gap closed to 4
percent.
Ford continued as the benchmark performer for transmission productivity,
but DaimlerChrysler finished second by recording an 8.3 percent productivity
improvement during the year. GM's new Romulus, Mich., transmission plant was
the best overall, needing just 3.96 hours to make each rear-wheel-drive
transmission.
Financial
As measured on a per-vehicle basis, Chrysler earned top honors as the most
profitable manufacturer by earning pre-tax profits of $1,470 for every vehicle
sold. Toyota ($1,348 per vehicle) finished second, followed by Honda ($993),
Ford ($854) and GM ($317), which had its profits battered by last summer's
prolonged work stoppage.
Despite earning The Harbour Report's honors as the overall assembly
productivity performance leader, Nissan again failed to record a profit,
losing $66 on each vehicle sold in 1998.
"The real financial stories extend far beyond the profit earned for each
vehicle sold," Harbour said. "It's the story of the dramatic changes in the
industry being forged by major business transactions."
Some of the other financial stories include:
* the first-year performance of DaimlerChrysler, certain to be one of the
most formidable and influential industry leaders for decades to come;
* GM's spinoff and initial public offering (IPO) of Delphi, and the
possible similar treatment by Ford of Visteon; and,
* Nissan's continued financial hemorrhaging.
These and other issues -- along with the yearly measurements -- are
discussed in The Harbour Report North America 1999, the annual study created
and published by Harbour and Associates, Inc., a Troy, Mich.-based
manufacturing and management consulting and automotive research firm.
The company completed its first industry-wide study in 1981 to document the
cost differences for automobile manufacturers to build vehicles in Japan vs.
North America. Today, The Harbour Report is considered the authoritative
guide to automotive manufacturing in North America, and is a leading
competitive analysis tool used by OEMs and suppliers to benchmark performance,
develop strategies and improve performance.
Copies of The Harbour Report North America 1999 can be ordered by calling
toll free 800-208-1353 or 248-641-2854.
More information about the report or Harbour and Associates is available
at http://www.harbourinc.com or by sending an e-mail to
harbour@harbourinc.com.